by David Hsieh

Overcapacity in the TFT LCD industry remains an ongoing concern for panel makers. Capacity expansions have been slowing down, with few new investments in Korea, Taiwan and Japan. At the same time, the shift to new technologies (such as LTPS, oxide TFT, and AMOLED) and production difficulties with some high end panels like IPS, thin and light, 4Kx2K, high resolution, and ultra-slim notebook PC panels, continue to limit available supply.

In addition to shrinking capacity, an important factor in bringing supply and demand into balance is area growth. One key trend to watch here is average screen size, especially for TV panels.

Based on panel makers’ shipments reported in the Monthly TFT LCD Shipment Database, the average TV panel diagonal has increased from 34.8” in August, 2011 to 36.8” in August, 2012. With a typical range of 18-20M panel shipment per month, an increase of 2 inches in screen size is significant, and has helped to increase area demand.

Sharp has the highest average screen size of TV panels shipped, and it grew significantly in the past year, from 39.1 to 48.3 inches. Most other panel makers saw an increase of approximately 2 inches in screen size over the past year. AUO increased from 34.4 to 36 inches, BOE from 29.9 to 32.7 inches, Chimei Innolux from 30.9 to 33.6 inches, LG Display from 36.2 to 38.9 inches, and Samsung from 37 to 39.4 inches.

There are several factors leading to increases in the average LCD TV panel size:

The emergence of new sizes has led many customers to choose larger sizes, such as moving from 26W to 29W, from 37W to 39W, from 46/47 to 50 inch, and from 55 to 60 inch.

As consumers replace older LCD TVs, they tend to choose a larger size. Many consumers in North America originally had a 32 inch LCD TV in their bedroom and a 40-50 inch set in their living room, and are upgrading to a 39 or 40 inch in their bedroom and a 50 inch or larger set for the living room.

LCD TV brands are promoting larger sizes in order to preserve profit margins.

With the year-end, many promotions will be launched, such as the rumored 60 inch LCD TV for $999 on Black Friday. With such attractive prices on large size LCD TVs, we can expect other consumers to migrate to larger sizes, further driving increases in average screen size.