Recovery Forecasted for TFT LCD Equipment Sector in 2010

Austin, TX (Vocus) November 3, 2009 -- While 2008 marked a record year in TFT LCD equipment spending, the combination of the worldwide economic crisis and the downside of the Crystal Cycle are causing the equipment segment to suffer its largest drop ever in 2009, with revenues falling 50% Y/Y. But the equipment market is resilient, and DisplaySearch now forecasts 51% growth in 2010 (Figure 1).

"The worst of the worst Crystal Cycle in the history of LCDs certainly has passed," stated Charles Annis, DisplaySearch Vice President of Manufacturing Research. "Rapid panel price declines from the end of 2008 through the spring of 2009 helped push demand further than expected. Additional strong demand from China is now encouraging panel makers to move forward with capacity expansions in 2010."

For the second consecutive quarter, Q3'09 improved significantly by all metrics. Specifically, the DisplaySearch supply/demand index fell into the tight zone below 10% and average industry utilization rose to 88%. In Q3'09 most TFT LCD makers were profitable, with some reaching profit margins as high as 15%. However, the LCD industry remains inherently cyclical and is expected to be burdened by over-capacity and lower prices during the seasonally weak quarters Q4'09-Q1'10 before recovering to healthy levels in the spring of 2010.

China is rapidly becoming the largest consumer of LCDs and has the potential to propel the LCD industry further. Although it currently only accounts for a 3.7% share of total TFT LCD capacity, this is expected to grow steadily to 7.4% in 2012 and even higher beyond, as multiple foreign and local Chinese panel makers are planning Gen 7 and 8 fabs.

"Q3'09 was good for most LCD materials suppliers and panel makers. But now the industry is moving into a 'wait and see' mode, cautiously planning long lead time capacity expansions, evaluating whether the global economy and LCD demand are back on a growth curve and if China will be able to meet continuously increasing expectations," Annis added.

For information on the DisplaySearch Q3'08 Quarterly FPD Supply/Demand and Capital Spending Report (http://www.displaysearch.com/cps/rde/xchg/displaysearch/hs.xsl/quarterly_fpd_supply_demand_and_capital_spending_report.asp), please contact Charles Camaroto at 1.888.436.7673 or 1.516.625.2452, e-mail contact(at)displaysearch.com or contact your regional DisplaySearch office in China, Japan, Korea or Taiwan (http://www.displaysearch.com/cps/rde/xchg/displaysearch/hs.xsl/contact.asp).

About DisplaySearch

Since 1996, DisplaySearch has been recognized as a leading global market research and consulting firm specializing in the $770 billion display supply chain. DisplaySearch provides trend information, forecasts and analyses developed by a global team of experienced analysts with extensive industry knowledge and resources. In collaboration with the NPD Group, its parent company, DisplaySearch uniquely offers a true, end-to-end view of the display supply chain from materials and components to shipments of electronic devices with displays to sales of major consumer and commercial channels. For more information on DisplaySearch analysts, reports and industry events, visit us at www.displaysearch.com. Read our blog at www.displaysearchblog.com and follow us on Twitter at @DisplaySearch (http://twitter.com/DisplaySearch).

About The NPD Group, Inc.

The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,700 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, contact us or visit www.npd.com and www.npdgroupblog.com. Follow us on Twitter at @npdtech and @npdgroup.

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