Report: Supply/demand modeling suggests improvement for flat-panel display makers

Flat-panel display (FPD) makers have lost money for six quarters in a row, the longest downturn since the inception of the industry, leading panel makers to put the brakes on all plans to expand fabrication of LCD TVs, according to NPD DisplaySearch.

However, the research company finds in its new "Quarterly FPD Supply/Demand and Capital Spending Report" that long-term supply/demand modeling suggests light at the end of the tunnel.

According to Charles Annis, NPD DisplaySearch VP of manufacturing research, the cyclical nature of market forces may soon right the FPD industry. "Delays in capacity expansion in 2012 and 2013 combined with continuously increasing demand are expected to finally start pushing the industry towards a healthier future," he said.

While FPD makers have suffered for six quarters, lower prices have spurred increased demand, especially for 50in and larger TVs. The latest NPD report predicts the net effect will be a tightening of the supply/demand balance, particularly in 2013. The result will be a new cycle of improved panel pricing, higher profitability and increased investment.

Although the overall FPD equipment market is expected to suffer a severe recession in 2012, falling 63 percent from 2011, it is forecast to rebound in 2013, driven in large part by spending on new active matrix organic LED (AMOLED) production lines.

Mass production of IGZO (indium, gallium, zinc oxide) based LCDs, which enable superhigh-resolution, brighter displays, started in the fourth quarter of 2011. Initially, IGZO will focus on LCD tablet and ultrabook display markets, but will likely see wider use in superhigh-resolution large LCD TVs and some AMOLEDs, according to NPD DisplaySearch. IGZO is expected to grow continuously in the future.