Business News Holding

Tag: isuppli

  • iSuppli Reports Strong DRAM Market Growth

    The DRAM industry in the second and third quarters of 2009 posted the strongest sequential growth in revenue and pricing seen in at least five years, indicating that the recent market rebound is real and is likely to continue into 2010, according to iSuppli.

    Global DRAM revenue rose by 35 percent in the third quarter compared to the second quarter, according to a preliminary estimate from iSuppli. This follows a 34 percent increase in the second quarter.

    The revenue rise in the second quarter brought an end to a three-quarter losing streak that began in the third quarter of 2008. Revenue had fallen by 19 percent in the first quarter of 2009, plunged by 38 percent in the fourth quarter of 2008 and decreased by a moderate 1 percent in the third quarter of 2008.

    Meanwhile, global DRAM Average Selling Prices (ASPs) rose by 21 percent in the third quarter compared to the second, following a 19 percent rise in the second quarter.

    Pricing declined by 10 percent in the first quarter of 2009. The second quarter marked the first sequential increase in DRAM pricing since the fourth quarter of 2006.

    “Third-quarter results from major suppliers show that the DRAM industry recovery is no mirage,” said Mike Howard, senior analyst, DRAM, for iSuppli.

    “The continued increase in prices comes as another indicator that the DRAM market is emerging from what has been a long and painful slump.”

    iSuppli says the global DRAM market has been declining on an annual basis since 2007. Revenue decreased by 7.5 percent in 2007 and plunged by 25.1 percent in 2008.

    Despite the strong recovery in the second and third quarters, extremely weak conditions in the first quarter mean that global DRAM market revenue is set to decrease by 12.9 percent in 2009, according to the company’s preliminary estimate.

    The market’s strong performance in the second and third quarters likely presage continued strength in the DRAM market.

    “Third-quarter earnings from Samsung, Micron and the Taiwanese DRAM manufacturers point to increasing sales and further progress toward profitability,” Howard said.

    “Samsung achieved profitability during the third quarter, while Micron’s results indicate the company is on its way back to the black. Recent sales results from the Taiwanese DRAM companies are also positive for DRAM. Collectively, the five Taiwanese DRAM suppliers—Inotera, Nanya, Powerchip, ProMOS and Winbond—saw monthly revenues increase rise by 15 percent per month for the last three months.”

    iSuppli expects supply levels to remain fairly consistent in the fourth quarter. DRAM demand is expected to improve in 2010 in concert with the general global economic recovery.

  • Research Forecasts Flat Panel Display Industry Slowdown in Q4, Recovery in 2010

    According to the latest DisplaySearch Quarterly Worldwide FPD Forecast Report, global flat panel display revenues for 2009 will be $87.6B, down 15% Y/Y from 2008.

    The major reason for the decline is erosion in large-area TFT LCD panel prices compared to 2008, despite the fact that the TFT LCD market started to recover in Q2’09.

    Despite the gloomy forecasted results for 2009, the market is expected to recover in 2010 with a 5% compound annual growth rate and revenues of $93.3B, the research shows.

    According to David Hsieh, vice president of DisplaySearch, 2009 represents a “drastic change” for the whole FPD industry.

    “The industry faced many critical challenges in the end of 2008 due to the global economic recession and the resulting drop in demand. However, as the market demand began to recover in early 2009 and the global economic situation is expected to continue to improve, we believe that the worst time for the industry has passed and the FPD market will experience growth after 2009,” he said.

    a-Si TFT LCD continues to be the largest segment in all FPD technologies. However, AMOLED shows the strongest compound annual growth rate, 179% from 2008 to 2012, as suppliers solve technical and financial problems.

    DisplaySearch says there are currently eight drivers for FPD growth in the next ten years: new applications and markets, new entrants and processes, new concepts and specifications, as well as new business and practices.

    Many of these are inspired by the downturn in the FPD industry in late 2008 and early 2009, which stimulated the FPD industry to find different strategies, markets and solutions.

    Other research from iSuppli says small and medium LCD suppliers are preparing for a Q4 slowdown.

    “Small/medium display panel vendors are prepping for what they believe will be a deceleration in demand in the fourth quarter – traditionally a slower period because of the end of the holiday buying rush,” says iSuppli.

    Furthermore, Tier-1 OEMs in the third quarter pulled in orders for the holiday season and the Chinese Golden Week. This allowed panel suppliers to achieve 93 percent of their third-quarter 2008 shipment levels in the first two months of the third quarter of 2009 alone.

    iSuppli analyst Vinita Jakhanwal claims suppliers are planning to reduce capacity utilization in anticipation, but the decline in capacity will allow the industry to better manage price declines.

  • Large-Sized LCD Panel Business Becomes Profitable Again

    After a year of losing money or generating zero return, the global large-sized (10” or larger) LCD panel business returned to profitability in the third quarter, according to iSuppli’s latest research.

    In an example of market trends, the 32-inch HDTV LCD, which is the most popular dimension for large-sized panels, generated a 13 percent profit for the LCD industry in the third quarter. In contrast, the 32-inch panel incurred losses of 12 percent in the second quarter of 2009, 31 percent in the first quarter of 2009 and 23 percent in the fourth quarter of 2008.

    The last time the LCD industry cut a profit on 32-inch HDTV panels was in the second quarter of 2008, when they generated a 19 percent return.

    Analysts say the main reason LCD panels have not been profitable for so long is the market’s extreme state of oversupply, which resulted in LCD panel pricing that was below manufacturing costs. However, reductions in production and utilization rates, combined with better-than-expected panel demand from China’s television market, helped spur the return to profitability in the third quarter.

    A shortage of glass used to make LCD panels also contributed to the tightness of the panel market during the third quarter, further boosting prices and profits.

    Worldwide shipments of large-sized LCD panels amounted to 148.3 million units in the third quarter, up 14.3 percent from the second quarter of 2009, and up 28.9 percent from the third quarter of 2008. iSuppli expects to revise this estimate as more companies report third-quarter results.

    LG Display was the world’s largest seller of large-sized LCD panels in the second quarter of 2009, accounting for 25.3 percent of shipments. This put LG just slightly ahead of chief rival, Samsung, which had a 24.6 percent share. Preliminary indications show LG and Samsung were engaged in a tight battle for the market’s No.-1 position during the period.

    iSuppli predicts that rising fab utilization rates and decreased panel demand following the Christmas purchasing season will drive the large-sized LCD panel market to oversupply in the fourth quarter of 2009, conforming with normal seasonal patterns. However, the reductions in prices and shipments are expected to be only moderate compared to those of a year earlier, in the fourth quarter of 2008.

    Many panel suppliers, having just returned to profitability, are maintaining tight control of their inventories and have little motivation to cut pricing drastically at this time, according to the research.

  • LCD-TV Market Growing Fast in Russia

    Defying hard economic times, the Russian LCD-TV market is set for strong growth this year, with shipments rising by 13.6 percent in 2009, according to iSuppli.

    Shipments of LCD-TVs in Russia will rise to about 5 million units in 2009, up from 4.4 million in 2008. By 2013, shipments will nearly double from the 2009 level, increasing to 9.6 million units.

    Revenue will increase to $5.7 billion by 2013, up from $3.1 billion in 2008.

    The research shows LCD-TVs are the only segment of the Russian TV market that is expanding, with shipments of Plasma Display Panel-Televisions (PDP-TVs) and Cathode Ray Tube-Televisions (CRT-TVs) decreasing in 2009 and beyond.

    “One of the main reasons for the switch to LCD-TVs in Russia is that they have become a status symbol. Consumers in Russia are very image conscious and prefer to own televisions that they can show off to neighbors and family members,” said Riddhi Patel, principal analyst for television systems for iSuppli.

    While the 32-inch size dominates shipments as an ideal upgrade or first television, the larger-sized TVs are becoming trendier.

    Among brands in Russia, South Korean OEMs are in a winning position because of their strong brand recognition. Furthermore, the South Korean OEMs also have domestic production capabilities and vertical integration—factors that allow them to have better control over their costs and prices.

    According to Patel, as far domestic Russian brands go, they are suffering from a lack of financial strength as well as the absence of branding. However, with a strong marketing strategy and the capability to be price competitive, Russian brands could challenge global OEMs in the domestic market.

  • IFA 2009: iSuppli Analyst About HDTV Market

    VIDEO INTREVIEW. This time at IFA 2009 our reporters interviewed Riddhi Patel, the iSuppli analyst. Riddhi is responsible for the television and plasma display panel (PDP) analysis.

    She shared with us her latest discoveries on HDTV market as well as her opinion of the nearest future of LCD technology that has dominated our living rooms.

    She was visiting this year’s Berlin expo looking for some big innovations. Watch the video to check out if she has found anything that took her breath away.

    iSuppli is a market research and consulting firm specialized in the electronics value chain. They provide market intelligence services for the EMS, OEM and supplier communities in addition to servicing consumer electronics and media concerns. /

    iSuppli provides research in multiple areas, including: Automotive, Broadband, Digital Home, Consumer Electronics, Mobile Handset, Displays, Semiconductors, Storage, Wireless Systems and more.

  • Blu-ray Won’t Replace DVD as the Primary Drive for PCs

    Despite a rapid rise in the sales of consumer Blu-ray players, a fall in their prices and an increase in the number of high-definition movie titles, Blu-ray drives in PC systems have been left singing the blues, according to iSuppli.

    iSuppli’s recent report says that by 2013, Blu-ray drives will be found in only 16.3 percent of PCs shipped, up from 3.6 percent in 2009.

    “BDs won’t be replacing DVDs as the primary optical drive in PC systems through at least the year 2013,” said Michael Yang, senior analyst for storage and mobile memory at iSuppli.

    “They eventually will find success, but during the next five years, that success will be limited in the PC segment.

    According to Yang, the two main reasons hampering the adoption of Blu-ray drives in PCs include costs as well as the lack of a library of movies that justifies the need for consumers to move to a different drive in their PCs.

    Cost, Yang said, is the primary impediment. Given the high price of the product, consumers are unwilling to pay the extra money in order to obtain a high-definition drive. “The cost issue is amplified by the fact that the library of content is so small that there really isn’t a reason for users to switch at the moment,” Yang added.

    And while this is changing and studios are rolling out more Blu-ray content every week, there remains a long way to go.

    A tertiary factor worth mentioning is the difficulty of supplanting an incumbent storage medium in PCs—a distinction currently held by the DVD-RW drive.

    “From a historical perspective, each of the successful storage media in PCs has gained popularity only when content became available and when consumers actually understood that what they were getting was easy to use and worth the cost,” the report says.

    For instance, the once-ubiquitous 3.5-inch floppy drive had a lifespan of 15-plus years, surviving well past its prime. Eventually, it was replaced by CD-ROMs—which, in turn, gave way to DVD drives.

    A changeover occurred and the floppy disk finally supplanted when it became apparent that CD-ROMs not only offered a distinct advantage but were also the medium being adopted by everything from music to games to movies.

    Such a pivotal moment, Yang said, has not yet arrived for the Blu-ray drive. “It’s undeniable that Blu-ray delivers a higher-definition picture, better sound quality and larger storage space for home entertainment,” he remarked.

    “However, these benefits may have little or no value when viewing the content on a smaller desktop or laptop PC screen and using poor speakers.”

    Until BD costs decline and user knowledge increases, the technology will continue to struggle – the report concludes.