Panel makers have been facing losses and continuously lowering capex. The decreasing capex has affected panel related equipment firms. Industry sources believe equipment orders in the third and fourth quarters of 2011 will contract about 10-15%.

Global demand for LCD TVs has been weak in 2011. LCD TVs account for more than 80% of the TV market value, hence the disappointing sales have been dragging down the output value of the panel industry. Industry sources expect the CAGR of the panel industry output value from 2012-2017 to likely be 5%, around US$120 billion.

Although KY Lee, chairman of Taiwan-based panel maker AU Optronics (AUO) has expressed confidence about getting through this "harsh winter", financial performance has been causing the firm to decrease capex. 2012 capex at AUO is expected to be less than NT$40 billion (US$1.32 billion). LG Display has also been lowering capex continuously.

The large-size panel firms have been delaying plans to set up next generation plants in China. However, South Korea-based panel firms have been investing in OLED. According to Digitimes Research, the capex for OLED from South Korea in 2011 was around KRW5.9 trillion (US$5.2 billion). The figure is expected to grow to KRW8 trillion in 2012. In particular for AMOLED panels, Samsung plans to invest KRW5-7 trillion while LG Display plans to invest another KRW1 trillion in 2012.

AUO has been planning to invest in OLED, however, compared with South Korea-based peers, the investment amount will be less significant.

Source:digitimes