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Taiwanese Panel Suppliers Lead the World in UHD TVs

Nov 18, 2013 | By Quincy Liang

Growth in the global TV market has experienced a significant slowdown over the past few years, and organic light-emitting diode (OLED) display panel makers have offered no significant new features to drive consumer interest and spur replacement demand. Late in 2012, panel makers began aggressively pushing new ultra-high-definition panels (UHDs) with 3840x2160-pixel resolution for larger-sized TVs, a more profitable segment of the TV panel market, according to IHS Inc., an industry research company.

Major UHD Players in Taiwan

Taiwan is a leader in the UHD TV industry, with Innolux Corp. and AU Optronics Corp. (AUO), the island's top-two makers of large-sized thin film transistor-liquid crystal display (TFT-LCD) panels, taking a commanding lead in the market for next-generation UHD LCD-TV panels with a combined 78% share of shipments in the first half of 2013 (Innolux 42.8%, AUO 35.6%).

In contrast, LG Display and Samsung Display Corp. of South Korea, which dominate the overall LCD and LCD-TV panel market, held a collective share of only 4% of UHD panel shipments.

Sweta Dash, HIS senior director for display research and strategy, points out that most TV brands are counting on UHD sets to rejuvenate sales, which is why Taiwanese suppliers are focusing heavily on meeting early demand for UHD LCD panels. South Korean suppliers LGD and Samsung, on the other hand, have turned their attention to a different technology: the active matrix organic light emitting diode (AMOLED) panel, which they believe represents the next generation of TVs. This, Dash explains, has allowed the Taiwanese to jump ahead in the early phase of the UHD LCD panel business.

AUO, for example, recently introduced 65- and 55-inch next-generation UHD 4K wide color gamut TV panels, which incorporate Wide Color Gamut (WCG) technology with a saturation of over 100%. The panels feature UHD resolution of 3840x2160 with a 120Hz frame rate, and boast true colors with 3D-like effect.

Great Expectations

UHD shipments are tiny at present, IHS says, amounting to 568,000 units in the first half of 2013, or less than 1% of the total LCD-TV panel market. However, the TV business has high expectations for the technology; in fact UHD was the main topic at Europe's largest technology show, IFA 2013, held in early September in Berlin.

TV panel makers are betting on a high rate of growth for UHD LCD TVs during the next four years. They expect to ship nearly 2.3 million UHD LCD panels this year, up from less than 33,000 units in 2012, according to IHS.

“Television sales declined in 2012, as consumers diverted their spending to exciting new products like smartphones and media tablets,” Dash says. “That's why television brands are working hard to promote exciting new technologies like UHD that they hope will bring the wow factor to the TV market and trigger demand.”

UHD Upside

So far, the UHD market has underperformed the TV industry's expectations, with slower-than-expected demand that has caused panel inventories to swell this year, the research firm says. The oversupply situation has led to sharp price decreases for panels and TV sets, however, making UHD sets more affordable during the holiday season.

Already, 55-inch UHD TVs are available from major brands such as Sony for prices ranging from US$4,000 to $5,000. Meanwhile, cheaper, lower-specification 50-inch products from value brands have fallen to less than US$1,500 in the Chinese market.

AMOLED

LGD and Samsung have focused most of their energies on resolving problems with AMOLED technology, including higher costs as well as manufacturing and yield issues. These challenges have resulted in very-low-volume shipments of AMOLED TVs in the first half of this year.

A 55-inch curved OLED TV in full high-definition format now is selling for around US$14,000, well out of the price range for the mainstream market. This high cost is enough to persuade most panel suppliers and television brands to stay out of the AMOLED segment and instead focus on the UHD LCD-TV business.

However, LGD and Samsung have not been deterred. Since July they have been expanding their UHD panel shipments, gearing up for a battle between the two technologies, IHS notes.

UHD Drives TV Panel Demand

According to IHS, shipments of UHD TV panels reached 400,000 units in the second quarter of 2013, up 142% quarter-on-quarter (QoQ), with a forecast for 800,000 units in the third quarter. While penetration into the TV panel market will be just 1% in terms of units in 2013, it should rise to 8% in 2017. Penetration by revenue will rise much faster, reaching 20% in 2017.

UHD TV panels are primarily found in a limited number of larger-sized models, but they will quickly diversify into a large variety of panel sizes from 3x inches to over 100 inches. While 50-inch and 55-inch panels currently dominate, 2.6 million 60-inch UHD panels will be shipped in 2017, along with 2.3 million 42-inch panels, and 2 million 39-inch and 48-inch panels.

Despite the aggressive activities of panel suppliers, UHD displays still face problems of insufficient content, inefficient production, high prices, and insufficient capacity. For UHD products to realize their full potential, HIS says, manufacturers will have to overcome these obstacles.


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