AUO, Innolux Eye Lucrative 4K2K TV Panel Biz in 2014

Interest in 4K2K, or ultra high definition (UHD), TVs is heating up as the emerging technology transitions from early adopters to more mainstream consumers. Rapidly falling prices, particularly in China, will fuel adoption, according to NPD DisplaySearch.

AU Optronics Corp. (AUO), Innolux Display Corp. and other Taiwanese makers of thin film transistor-liquid crystal display (TFT-LCD) panels have pulled ahead their Korean counterparts with 4K2K TV panel debuts in 2013. The companies expect shipments of such products to surge in 2014.

Paul Gagnon, director for global TV research at NPD DisplaySearch, says that panel producers are readying for the huge demand. "Panel makers are planning for nearly 27 million 4K2K TV panels to be produced next year, while brands have somewhat more modest expectations for the end market. There is a significant difference in outlook between China and other regions," he says.

According to NPD DisplaySearch's latest quarterly TV shipment and forecast report, 4K2K TV shipments are expected to total 1.9 million units in 2013, rising to 12.7 million units in 2014. China produced 87% of the 4K2K TV units shipped in 2013, and this figure is expected to retreat slightly to 78% in 2014. This means that 4K2K TV shipments within China will be more than three-fold the shipments of all other regions combined. Eventually other regions will catch up, but China will remain the leading region for 4K2K TV shipments throughout the forecast, enabled by intense competition and low prices. The average prices of 4K2K TVs are expected to fall below US$1,000 in China during 2014, while the worldwide average remains over US$1,100 and close to US$2,000 in North America.

Total TV demand is expected to fall 3% in 2013, after a 6% decline in 2012, NPD DisplaySearch said. Overall demand in many regions is still affected by the accelerated demand in 2010 and 2011, which pulled in demand from future years. Total TV shipments should inch up by about 1% in 2014 to 229 million units, with LCD TV shipments rising to 220 million, or 96% of the total. Plasma and cathode-ray tube (CRT) TV shipments are declining rapidly. "OLED TV technology is not expected to yield significant growth for two to three more years," Gagnon said. "4K×2K has therefore become a technology focal point in the interim."

AUO expects to ship about five million 4K2K TV panels in 2013, in sizes of 42- to 65-inch, to major customers such as Sony of Japan, Samsung of Korea, and different TV makers in China. The Taiwanese panel maker beat Japanese rival Sony with the debut of its 65-inch curved TV panels. The new panels have a higher price and fatter profit margins.

Innolux plans to ship some 12 million 4K2K TV panels in 2014, in sizes of 39- to 85-inch, to mainly Chinese TV vendors. Currently, Innolux has the highest share in Chinese 4K2K TV-panel market among global counterparts. The company also has recently tapped into the supply chains of Sony and Samsung.