March 18, 2003 8:01 AM PST
LCD growth on display
The report from market researcher DisplaySearch revealed that shipments of 10-inch or larger LCDs rose to a record 18.7 million units during the fourth quarter. That overall figure represents a sequential increase of 15 percent and a year-over-year gain of 27 percent. DisplaySearch, which tracks LCD shipments, had expected a 12 percent sequential increase.
A combination of factors drove the larger-than-expected increase in shipments, according to the reported issued Monday. First, prices fell significantly in the fourth quarter because of weak shipments and inventory buildup during the previous two quarters. The lower prices then led to higher demand for LCD TVs and flat-panel displays for desktop computers during the 2002 holiday season.
LCD shipments for TVs grew 54 percent in the fourth quarter over the third quarter. LCD shipments for flat-panel displays for desktop PCs grew 15 percent, while LCD shipments for notebook computers--still the mainstay of the LCD market--increased 12 percent sequentially, according to Austin, Texas-based DisplaySearch.
Although LCD unit shipments grew during the fourth quarter, revenue from notebooks and flat-panel displays for desktops shrank sequentially 17 percent and 7 percent, respectively, because of declines in prices. Revenue from LCD TVs, however, increased 56 percent sequentially to $204 million in the fourth quarter.
The top five LCD makers during the fourth quarter were LG.Philips LCD, Samsung, AU Optronics, Chei Mei/Idtech and Sharp, according to DisplaySearch. The companies had market shares of 19.2 percent, 17.1 percent, 12 percent, 8 percent and 8 percent, respectively.
Philips and Samsung battled for dominance throughout the year.
While Samsung finished second to Philips in the fourth quarter, it held the largest share of the market for all of 2002 at 17 percent. Philips ended 2002 with the second-largest share of the market at 16.6 percent, followed by AU Optronics with 13.3 percent.
As prices come down and manufacturers fine-tune new plants, flat-panel displays are expected to continue to creep up in size.
Manufacturers and analysts have predicted that 2003 will see flat-panel adoption continue to increase--though possibly not as quickly as during the fourth quarter of 2002.
"In general, supply looks good for the rest of this year at least," Scott Hardy, product marketing manager for displays at Dell Computer said in a recent interview.
Dell, for one, has found that about half of its consumer customers in the United States purchase a flat-panel display with a new PC, Hardy said. Only about 30 percent of businesses opt for flat panels, however.
Because flat panels have been doing so well, Dell has begun to drop some of its more expensive cathode-ray tube (CRT) monitors. The company is phasing out Sony Trinitron-based 17-inch and 19-inch monitors, for example.
Most "customers who were upgrading to 17-inch or 19-inch Trinitron are saying, 'I might as well just buy a flat panel,'" Handy said.
While revenue for flat-panel displays has already begun to outpace that for CRTs, companies like Dell expect flat panels to gravitate toward larger sizes during the year, matching up with popular CRTs.
Most CRTs currently sold are 15-inch, 17-inch, 19-inch, or 21-inch. While 15-inch and 17-inch flat-panel displays are the most popular now, 19-inch and 21-inch flat panels are expected to grow in popularity.
The last bastion for CRTs may be among business. There, flat panel adoption has slowed due to the sluggish economy. U.S. companies still favor 17-inch CRTs, which can be purchased for less than $200, and so far have been unwilling to step up to flat-panel displays even for the small premium for a 15-inch flat panel, Dell's Hardy said.