Flat panel display growth to remain strong: analysts

Taiwan's flat panel display industry is expected to register strong growth in 2008, driven mainly by booming demand in the global liquid crystal display (LCD) television market, industry analysts said yesterday.

Industry sales will be sluggish in the first quarter of the year because of a slowdown in demand for personal computers, but should gradually pick up in the second quarter, when large-area LCD shipments increase to meet the expected high demand for flat panel TVs driven by the 2008 Olympic Games, the analysts said.

According to a forecast by the display market research and consulting firm DisplaySearch, the global supply of large-area displays will exceed demand by 13.8 percent in the first quarter, then fall to 9.2 percent in the second quarter and 8.7 percent in the third quarter before recovering to 9.6 percent in the fourth quarter.

Supply exceeding demand by less than 10 percent is indicative of a tight supply situation.

A number of international investment consulting firms, including Morgan Stanley, have predicted that the global flat panel display industry will experience a "super cycle" in 2008 thanks to the fast-growing LCD TV market.

They project a sharp increase in global LCD TV panel shipments as 42-inch and 47-inch displays replace smaller ones to become the mainstream LCD TV module sizes.

Both DisplaySearch and Taiwan's Industrial Technology Research Institute have forecast that annual global LCD TV panel shipments will top 100 million units for the first time in 2008.

LCD TV shipments are also likely to exceed 100 million units in 2008, as LCD TVs gain dominance over traditional cathode ray tube (CRT) TVs for the first time in the global television market, according to the forecast.

The popularity of LCD TVs have grown in recent years as consumer prices have fallen and the United States, Japan and European nations have promoted digital television.

The increased growth is expected to help panel suppliers boost income in 2008 after a bumpy 2007 that saw companies finish strong.

Taiwan's leading panel suppliers - AU Optronics (AUO), Chi Mei Optoelectronics, Chunghwa Picture Tubes and HannStar Display - all recovered from losses in the second quarter of 2007 to post significant increases in earnings in the second half of the year.

AUO, for example, had an after-tax net income of NT$23.4 billion for the first three quarters of 2007, despite an after tax net loss of NT$5.1 billion in the first quarter, and is expected to set a record for earnings with after-tax net income exceeding NT$50 billion for the year.

According to the Taiwan-based Institute for Information Industry's Market Intelligence Center, Taiwan's flat panel display output is estimated at NT$1.4 trillion for 2007, with the value projected to continue expanding over the next seven years to reach NT$2.5 trillion by 2015.