Seasonal Patterns Persist

Key Thoughtz

• AMLCD prices fluctuate with accelerating capacity, which is not synchronous with the solar calendar.
• Fluctuating prices make sales revenue an unreliable measure of seasonal demand.
• Display area shipments provide the best view of seasonal demand patterns.
• Data from leading producers show no change in the historic pattern of seasonal demand for AMLCD area.

Read more in the downloadable file(s):

Abstract — Some analysts assert that the seasonal pattern of AMLCD demand has changed. We find no evidence of this. In this commentary, we examine public disclosures by AU Optronics (TSE: 2409) and LG Display (SEO: 034220) for evidence that seasonal business patterns have changed for AMLCD producers. We find that the quarterly share of annual display area shipments in 2009 looked much like other years since 2003. Producer sales patterns show less consistency in US dollar terms because of exchange-rate variations. Nevertheless, their seasonal sales levels correlate 91% from Q1’03 through Q4’09. Moreover, their areal-price fluctuations exhibit 97% correlation. From this we conclude that producers face cyclic prices out of rhythm with the calendar while their customers place delivery orders in a consistent seasonal pattern. There is no evidence that this seasonal pattern changed in 2009.

Quarterly Share of Annual AMLCD Area Shipments, 2003–2009

Source: BizWitz analysis.

Supply chains for products using small AMLCD tend to be longer and slower than chains for larger products. We think this reduces the seasonal effects of rising LCD TV demand in countries where gift-giving holidays are not synchronized to the solar calendar. The historic seasonal pattern of display area shipments may change in the future, but we see no evidence of such change to date. For more insight, download Seasonal Patterns Persist.