Rent-to-own News - Flat panel manufacturers scale back

The flat-panel display industry is in for a sustained recession in 2012 as manufacturers freeze further plant expansions and better control output, according to a new NPD DisplaySearch quarterly flat-panel display market report released Tuesday.

However, the firm notes that necessary supply tweaking in the year ahead should reduce glut volumes to new lows and the industry begins to re-position itself for next-generation technologies, that should help drive new growth in 2013, according to Twice.

Some of that new display development will come from production of large panel Active Matrix Organic Light Emitting Diode (AMOLED) displays, slated to reach market this year.

DisplaySearch said the flat-panel display (FPD) industry is in the midst of "severe challenges," as price declines for 50-inch and larger products continue to push demand. The report says that FPD makers have lost money for the past six quarters in a row, which marks the longest down turn since its creation.

As a result, panel makers have now frozen almost all expansion plans for LCD TV fabs.

The result will be a "tightening of the supply/demand balance, particularly in 2013," which will cause the glut ratio to fall well below 10 percent for the first time since the second quarter of 2010, DisplaySearch said.

"This is expected to set off another crystal cycle of improved panel pricing, higher profitability and increased investment," according to the study.

"The FPD industry may soon begin to right itself through the cyclical nature of market forces," said Charles Annis, NPD DisplaySearch manufacturing research VP. "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."

Although the overall FPD equipment market is expected to suffer a severe recession in 2012, falling 63 percent from 2011, the market is forecast to rebound in 2013, driven in large part by spending on new AMOLED production lines, DisplaySearch said.

Mass production of IGZO-based LCDs, which enable super high resolution, brighter and more efficient displays, started in Q4 2011. Initially, IGZO will focus on LCD tablet and ultrabook display markets, but will likely see wider use in super high resolution large LCD TVs and some AMOLEDs, according to the report. IGZO is expected to grow continuously in the future.

In related news, reports out of South Korea Tuesday said that Samsung directors are considering various options to improve competitiveness in its loss-making LCD panel business.

Several reports speculated that Samsung may be considering a spinoff of the operation, although Samsung officials reportedly declined to comment on that speculation.

The news follows Sony's recent decision to exit an LCD panel joint venture it had established with Samsung. At the same time, new Chinese LCD factories are putting further pressure on the market.

Samsung and LG also recently announced plans to introduce the first large-screen AMOLED displays later in 2012. That technology is expected to eventually become widespread in the consumer TV market.