Predictions for enhanced HDTV production have taken a massive leap — enough to offset the shrinking PC screen market. Are those predictions too rosy? If OEMs flub predictions about TVs covering the PC glass falloff, it could result in a crunch or an oversupply this year, with drastic effects on pricing either way.
The sudden focus on televisions hasn't come out of nowhere — sales have been rising steadily for the past several years. But the shift toward massive, high-resolution screens has become so pronounced that it now seems to defy common sense. That makes it very difficult to predict glass supply.
As the recent Consumer Electronics Show (CES) in Las Vegas showed, screen sizes for the so-called 4K or ultra-high-definition televisions have now reached 110 inches. Resolutions are so fine that the human eye can't really detect the improvement in many cases. Nevertheless, an NPD DisplaySearch report (registration required) said sales of the high-end sets are likely to increase from fewer than 2 million in 2013 to more than 12 million in 2014. That's a massive increase in demand for high-end glass, particularly with the units unveiled at the CES coming in 20-30% larger than their predecessors.
The TV arms race has implications for the entire electronic supply chain as screens consolidate their position as the focus of device design across the industry. As recently as five years ago, predicting glass supply for the TV business didn't necessarily have implications for the telephone or PC business — or even for medical devices. Now it does.
The size of the new TV screens is also an issue. A 100-plus-inch TV is a resource-intensive device with a high unit cost. To complicate matters, sales of the new sets are not nearly as predictable as phone or even tablet sales. NPD DisplaySearch's rosy predictions aside, it's unclear how large a market there is for $4,000-$20,000 TVs. Most of the current sales are in just one market, though a large one: China.
Writing from the CES, Techlicious reported that screen resolution has gotten so fine, consumers can't tell the difference between the new 4K screens and older HDTV flat screens on sets smaller than 70 inches. High-end designs on display at the CES from Samsung and LG curve slightly outward, like macaroni. Techlicious says this is in part to signal to consumers that this is new technology, not the usual flat screen your TV has used since the mid-1990s — in case you can't tell that by just looking at the image.
That might seem like a hiccup between screen technology advances and consumer needs, but the difficult sales proposition for the new TVs has implications for the broader glass supply chain. With PC sales continuing to slide, demand for high-definition television has been picking up slack from the shrinking sales of desktop monitors and even larger laptops. One key difference: Tablets and phones are still emerging technology, but HDTVs seem to have topped out their potential. This makes it much harder to convince someone to replace last year's TV than to replace last year's iPad.
That would seem to suggest that glass supply orders based on demand for ultra-high-definition TVs aren't really bets on the new resolutions and vast screens impressing consumers. It's effectively a bet on the market for the ultra-HD glass taking root outside its main market in China, particularly in the US and Europe. With both places still recovering from steep financial crises, that's a huge bet on a huge glass order for electronics that's far from crystal clear. It's just January.