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Small Makers: Small Panels

Key Thoughtz

  • Consumer demand for desktop PC make large panels appear unattractive to smaller AMLCD producers.
  • Consumer demand for smart phones make small panels appear attractive to smaller AMLCD producers.
  • The resulting reallocation of capacity drives small panel area prices down 16% a year.
  • Continuation of such price decay raises barriers for alternative technologies that lack scale advantages.
Read more in the downloadable file(s):
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Abstract — Recent announcements by AMLCD producers confirm that the shift of capacity allocation from large panels to small panels will continue over the midterm. The credit crisis of 2008 caused business buyers to defer IT purchases and caused consumers to seek bargains. Such changes gave AMLCD producers more reasons to allocate more capacity for small panels. They had being doing so for other reasons for several years already (for background, read AMLCD Producer Trends) and the crises reinforced that dynamic. Concurrent with the crisis, LCD monitors had replaced nearly all CRT monitors, in new desktop PC installations at least. As a result, makers of monitor panels lost the additional demand created by CRT replacement and faced poorer prospects as desktop demand flattened-out. This condition exacerbated problems in the monitor panel market, which has had the lowest barrier to entry of any large AMLCD market segment. As the monitor market becomes less attractive, smaller producers who are unable to compete in other large panel market segments seek new opportunities in mobile phone and other small-panel markets.

Trend of Areal Price Decay for Small a-Si AMLCD (USD/m²)

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Source: BizWitz analysis of DisplaySearch data.

As plotted in the chart, the areal price of small panels (using mainstream a-Si processes) has been declining 16% a year. Continued re-purposing of large-panel fabs to serve small-panel markets should sustain this trend over the midterm. The implication is that the average price per square-inch in 2012 could be 40% less than in 2009. A decline of such magnitude would raise entry barriers for alternative technologies. For more insight, download Small Makers: Small Panels.