Taiwan, China's panel industry output value fell by 30% year-on-year in the first 4 months of this year

1. Driven by demand for products such as LCD TVs, laptops and mobile phones, Taiwan, China's LCD panel and component industry (referred to as the panel industry) broke through the trillion-yuan mark in 2007, reaching NT$1.1826 trillion, a record high. However, affected by the financial tsunami, output value plunged to NT$930.8 billion in 2009. Afterwards, various countries successively proposed economic stimulus plans, driving a rapid rebound in demand for panel products.

2. Benefiting from buoyant global sales of smartphones and tablet computers, plus brisk demand for large-size TV panels, the panel industry's output value remained at around NT$1.1 trillion for five consecutive years from 2010 to 2014. In 2015, affected by weak global economic growth, sluggish end-market demand and fierce international competition, the panel market was oversupplied and prices fell; output value dropped to NT$953.3 billion in 2015, down 13.5% year-on-year, and output value in the first 4 months of 2016 also fell 31.9% year-on-year. As the peak season approaches in the second half of the year, restocking demand is warming up and prices are rising, so output value is expected to rise quarter by quarter.

3. The panel industry was affected by the February 6 earthquake in southern Taiwan in 2016, which disrupted manufacturers' production schedules, and cumulative output value from January to April fell sharply by 38.9%. Small and medium-size panels (under 10 inches) accounted for about 15% of output value; in 2015, due to slowing smartphone growth and declining tablet computer sales, output value fell 18.1%, and cumulative output value from January to April 2016 also fell 32.2%. LCD panel components (color filters, glass substrates for LCD, backlight modules) accounted for about 20% of output value combined; as panel market conditions were poor, they also declined in tandem.

4. This industry's direct export ratio is about 80%, mainly export-oriented. Cumulative exports of Taiwan, China's panel products (HS9013) from January to May 2016 were US$2.75 billion, down 28.4% year-on-year. The main export market was the Chinese mainland, ranking first with 78.8%, followed by Hong Kong, China with 11.8%.

5. Comparing panel exports of major competitors, the Chinese mainland ranked first in export value, South Korea second, and Taiwan, China and Japan ranked third and fourth respectively.