DisplaySearch Reports Q3’06 10”+ LCD Revenues Rise 9% On 56% LCD Area Growth; Korean Suppliers Retain The Lead In Sales

November 8, 2006

DisplaySearch, the worldwide leader in display market research and consulting, has released the Q4’06 Large-Area TFT LCD Shipment Report database indicating that Q3’06 worldwide shipments of large-area (10”+) TFT LCD modules rose 21% Q/Q and 29% Y/Y to 77.4 million units. The strong unit growth more than offset price reductions enabling revenues to rise 14% Q/Q and 9% Y/Y to $13.5B. Average selling prices (ASPs) were down 6% Q/Q and 16% Y/Y to $174. After falling at double-digit rates sequentially in both Q1’06 and Q2’06, blended monitor and notebook price reductions slowed to 3% and 7% respectively as stronger seasonal demand combined with supplier reductions in utilization narrowed the TFT LCD surplus. On an area basis, more than 9.26 million square meters of TFT LCDs shipped in Q3’06, enough to cover 1,234 soccer fields, which was up 26% Q/Q and 56% Y/Y. The average display size increased 10% Y/Y but the average areal price decreased 10% Q/Q and 30% Y/Y to $1,453 per square meter. Forecasts suggest the areal price could rise in Q4’06 but continue falling over the mid-term as producers bring more display area to market. Korean suppliers LG Philips LCD and Samsung Electronics retained their revenue lead over Taiwanese suppliers by increasing their average display size in Q3’06. Taiwanese suppliers produced 49% of all large LCD units but captured only 43% of revenues in Q3’06 with a blended unit price 13% less than the market average. Korean suppliers shipped 39% of all units but generated 45% of industry revenues with unit pricing 16% greater than the industry average. The two Korean suppliers captured 54% of LCD TV panel sales. Supplier shipment targets indicate that Korean producers will retain the sales lead in Q4’06 and Q1’07. In terms of shipments, trends and market share by application, **Notebook PC panel shipments increased 14% Q/Q and 22% Y/Y to 20.7M units with average prices falling 7% Q/Q and 28% Y/Y to $104. Shipments were just 1% below supplier targets while ASPs were within 1% of DisplaySearch’s forecast. Notebook panel revenues were up 6% Q/Q, but declined 13% Y/Y. Wide-format displays accounted for 76% of notebook display area, 75% of units and 76% of sales in Q3’06 as 15.4” 1280 ◊ 800 panel remained the top-selling notebook display. It generated 35% of all notebook panel revenues in Q3’06. The second most popular type was 14.1” 1280 x 800 which accounted for 16% of notebook display sales. 15.0” 1024 x 768 only accounted for 10% of revenues in Q3’06, down from 26% in Q3’05. The average price per square meter fell 27% Y/Y and 7% Q/Q to $1632 while the wide format price per square meter fell 29% Y/Y and 6% Q/Q further narrowing the wide premium. Korean suppliers captured 53% of notebook display revenues in Q3’06, up from 49% in Q2’06. In Q3’06, LG.Philips LCD (LPL) was #1 in the notebook panel market accounting for 30.0% of notebook display units and generating 29.4% of notebook display revenue. Samsung Electronics was #2 with 23% of units and 24% of revenues. AUO remained #3 and will be boosted by its acquisition of Quanta Display in Q4’06. **LCD monitor panel shipments rose 23% Q/Q and 19% Y/Y in Q3’06 to 39.1 million units. Shipments were above supplier targets as lower prices and traditional seasonality fueled strong growth. Blended prices were down 3% Q/Q and 30% Y/Y which generated 20% Q/Q revenue growth with revenues down 17% Y/Y. Shipments were led by wide panels which rose from a 10% share in Q2’06 to 16% in Q3’06 on 109% Q/Q growth. The average areal price was down 34% Y/Y with 21”+ panels down 45% and 21”+ wide panels down 49% as the premium for wide continues to narrow as volumes rises. 17” and 19” SXGA panels remained the top two monitor panels in Q3’06 with revenue shares of 42% and 26% respectively. 19” 1440 x 900 panels overtook 15” 1024 x 768 to become the #3 panel with a 12% share on 131% Q/Q growth. Samsung Electronics remained #1 in monitor panel revenues in Q3’06 with a 20% revenue share and 18% unit share. AUO remained #2 with a 16% unit and revenue share while LPL remained #3 with a 14% unit and 15% revenue share. Taiwanese suppliers led this segment, accounting for 58% of units and revenues. **LCD TV module shipments exceeded suppliers’ expectations by 3%, rising 25% Q/Q and 90% Y/Y to 14.9M units. LCD TV panel area grew 32% Q/Q and 140% Y/Y to nearly 4.0 million square meters. The average panel diagonal reached 30” for the first time, up 3% Q/Q and 30% Y/Y and LCD TV panel revenues grew 13% Q/Q and 70% Y/Y to $5.9B. ASPs were down 10% Q/Q and Y/Y to $395 with share gains at larger sizes and higher resolutions helping to reduce the blended ASP decline. 32” 1366 ◊ 768 remained the top selling LCD TV panel with a 34% share, up from 33% in Q2’06. The 37”, 40”-42”, 46”-47” and 52”+ segments all grew at least 45% Q/Q and took share from smaller sizes as prices continue to fall and the price gap with smaller sizes narrows. The 32”+ market rose from a 55% to a 59% share while the 37”+ category rose from 21% to 26%. LPL was #1 in LCD TV units with a 24% share while Samsung was #1 in LCD TV panels with a 30% revenue share and the highest blended ASPs due to its size mix being heavily weighted towards larger sizes. LPL was #2 followed by AUO, CMO and Sharp. Korean suppliers captured 54% of TV module revenues. Total large-area TFT LCD revenues by supplier are shown in Table 1. As indicated, Korean suppliers Samsung and LPL held the top two positions followed by three Taiwan suppliers. Beginning in Q4’06, AUO will include Quanta Display’s results as well with Quanta the #7 supplier in Q3’06. In Q3’06, combining AUO and QDI would have boosted AUO’s position to from 15% to 19%.

Q2’06 – Q3’06 Large-Area TFT LCD Supplier Revenue Share and Growth 
 
  Supplier  Q2’06  Share  Q3’06  Share  Q/Q  Growth 
  Samsung  25.9%  24.1%  6% 
  LPL  20.0%  20.7%  18% 
  AUO  14.7%  15.3%  19% 
  CMO  10.9%  11.6%  22% 
  CPT  6.0%  6.1%  15% 
  Others  22.5%  22.1%  12% 
  Total  100.0%  100.0%  14% 

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