EL SEGUNDO, CA – Global shipments of displays for mobile handsets are expected to decline more than 6% in 2009 and remain flat in 2010, as worsening economic conditions continue to impact the wireless industry, says iSuppli Corp.
 
iSuppli forecasts the mobile handset display market will decline to 1.5 billion units in 2009, down 6.2% year-over-year. Shipments will rise by a marginal 0.3% in 2010. The market won’t recover to exceed the 2008 level until 2011, when shipments will reach 1.65 billion units.
 
“The handset display market already was struggling in 2008 due to declining average selling prices and dwindling margins,” said Vinita Jakhanwal, principal analyst for mobile displays at iSuppli. “However, the downturn now is beginning to impact unit shipments, leading to revenue declines for the industry this year and next.
 
“The decreasing replacement rate for handsets due to deteriorating economic conditions will be the main cause for the market downturn. New handset demand from the emerging countries will not be sufficient to offset this decline.”
 
Beyond the slowdown, a major buildup in inventories of finished handsets will make the decline more severe in the beginning, says the firm. Indications of an inventory correction already had a major impact on the industry in the fourth quarter.
 
In response to this, handset display shipments from the top suppliers declined more than 40% sequentially in the fourth quarter.
 
During the current quarter, demand is expected to shore up slightly because of demand associated with the Chinese New Year, driven by domestic Chinese handset makers and the top-tier cellphone brands, according to iSuppli.
 
The mobile handset market has been characterized by declining display prices over the last few years. This mainly has been a result of the expansion of TFT-LCD capacity, as new investment has enabled newer generation fabs to meet the expanding demand for monitors, notebooks and LCD TVs.
 
Despite the economic slowdown, mobile-display panel pricing for all screen sizes and technologies is expected to maintain its historical annual decline rate of 15% to 20% this year. iSuppli believes the ASP decline in 2009 won’t be as severe as it was in 2008 for some specific panel types. Most suppliers have implemented capacity cuts and reduced their fab utilization rates in response to the slowing demand. This will help mitigate some of the more precipitous declines in prices, says the firm.
 
Despite decreases in pricing and declines in shipments, it is unlikely that top-tier customers will have difficulties procuring panels in 2009. With the current cuts in capacity utilization, the level of oversupply in the small/medium TFT-LCD industry may shrink, but it is doubtful any shortages will occur. When suppliers see orders increasing, they can ramp up production again easily.
 

ARLINGTON, VA -- The Consumer Electronics Association this week applauded President Barack Obama for his focus on reducing the federal deficit as a critical component to addressing the fiscal problems facing the country. CEA believes the ballooning deficit is a principal impediment to long-term economic growth, the trade group said.

CEA is urging the federal government to reduce the deficit by committing to the follow actions:

• End corporate bailouts, including the Troubled Asset Relief Program, that artificially prop up industries, and end “Buy American” and other bailout provisions that reward backward protectionist policies that will hurt America’s ability to compete in the global economy.

• Oppose the Employee Free Choice Act, or “card check,” and other anti-business measures that hurt American employers and infringe on the rights of workers.

• Pass pending free trade agreements, particularly those with Colombia, Panama and South Korea, to boost U.S. exports and let American companies fairly compete with their international trading partners.

• Support the free and open market and promote technology innovation by U.S. companies. When aided by trade, the technology industry will help mend the global economy and drive the creation of new jobs.