LCD TV market set to falter


Michelle Clancy

| 12 August 2015

Commodity LCD TV displays, led by 32" high definition (HD) panels, have in the past been a key industry revenue generator, but that situation is changing, according to IHS Inc.

Industry profits for 32" panels increased by 24% in the first quarter of 2015, year-over-year, but they are expected to decrease by 22% in Q1 2016.

"Most LCD TV panel prices began to fall after the first quarter of this year, and prices will reach their lowest level in the second quarter of 2016," said Yoshi Tamura, senior director of research and analysis for IHS Technology. "Since equipment depreciation cost is factored into eighth-generation fabs, the total LCD profit margin is expected to turn negative next year."

According to the IHS Large Area Display Cost Model Report, LCD panel makers are increasing their capacity in China, with eighth-generation fabs that mainly produce displays of 32", 48", 49" and 55". As profit margins fall for 32" LCDs, manufacturers are expected to shift their 32" LCD production to larger sizes, thus reducing prices and increasing demand for displays larger than 48".