The TFT LCD industry has been experiencing an over-supply for more than 12 months and Q1â€™11 is viewed as rock bottom of this cycle, a result of shipment declines, falling panel prices, and suppliers reducing capacity utilization rates due to a lack of orders and inventory reduction. Excess shipments of LCD TV panels in 2Hâ€™10 were the major cause for such a long period of oversupply. However, panel prices started to stabilize at the end of the quarter.
The forecasted 18% Q/Q growth in Q2â€™11 might be too aggressive because the current tightness is mostly resulting from supply constraints rather than strong demand. LCD panel manufacturers will need to see whether panel orders continue to increase based on optimism for the second half of the year.
First quarter large-area TFT LCD shipments decreased 7% Q/Q, increased 5% Y/Y to 164 million units. Revenues also declined 12% Q/Q and 19% Y/Y to US$17.5 billion.