According to its Quarterly Large-Area TFT LCD Shipment report, advanced LED panel shipments of LCD TVs with LED backlights grew from 10.2 million in Q2’10 to 14.9 million in Q3’10. This was up 46 percent quarter by quarter which trounces the four percent quarter by quarter growth rate for all LCD TV panels.
DisplaySearch found that LED penetration in LCD TV panels rose from 18.5 percent in Q2 to 25.9 percent in Q3. It said that although panel makers are expecting almost flat shipments in Q4 they will aim to increase LED penetration to a further 29.2 percent.
Q3 has seen a severe oversupply, especially after downstream LCD TV OEMs and brands took an inventory adjustment approach and reduced purchase orders.
Panel prices crashed and for some models, the price has fallen below total cost, causing problems for panel makers.
During the rapid price reduction, most downstream buyers are cautiously assessing needs and buying only what they will use rather than building inventories. It said for many brands, CCFL models are old fashioned and so it was lower risk to buy LED models, especially because panel price reductions are greater than CCFL panel price reductions.
In a bid to stay on top of the game many brands offer special promotions during the end-of-year selling season in order to boost sales numbers. LED models are a key element for promotions, making them more attractive to end users. As a result this encourages the LCD TV brands to buy more LED panels in Q3 in order to make sure they have enough panels to launch special promotions in Q4.
Some panel makers are carrying too much inventory of LED chips and LED backlights in Q3. In a bid to clear these, Displaysearch said manufacturers are taking several approaches, including spot deal prices and trading, rebates and larger price reductions.
LED backlight developments such as reducing LED light bar numbers, improving the thermal solution and reducing prices on LED chip and packages are contributing to the LED backlight cost drop.
However, not every LCD TV size is ready to transfer from CCFL to LED. For sizes such as 32 inch, LED penetration is not ramping up rapidly because the pool is huge and most brands see LED models as higher end.
In other words, larger sizes, such as 40 inch, 42 inch, 47 inch, 52 inch and 55 inch, will be well positioned as higher end if brands switch to outsourcing the backlight.
This is because despite the higher panel price premium, LED in larger sizes is more attractive than in smaller sizes. Larger screens can easily accommodate LED backlight benefits such as lower power consumption and slim type.