Display panels for touchscreen mobile PCs suffered a sequential decline during the second quarter of 2013, according to a new report entitled Touch Panel Shipment Database – Notebook PC – Q3 2013, published by HIS.
Shipments of touchscreen panels for notebook PCs amounted to 4,4-million units in the second quarter of 2013, down 4,9% from 4,6-million in the previous quarter.

Up until the second quarter, shipments of these panels had been skyrocketing, rising by 52% in the first quarter, by nearly 3 000% in the fourth quarter of 2012 and by 222% in the third quarter of 2012.

Despite the sequential decline, the nascent market for notebook touchscreens is still expanding on a year-over-over basis, with shipments surging to 8,9-million units in the first half of 2013, up from a mere 53 000 in the first half of 2012.

“The touchscreen notebook market stalled in the second quarter, reflecting generally terrible conditions in the mobile PC segment,” says Duke Yi, senior manager for display components and materials research at IHS.

“Shipment growth also was impacted as PC makers prepared new models for introduction in the second half of 2013. The good news for the market is that sequential growth is forecast to recover in the second half, traditionally the peak season for PC product sales, following launches of new product line-ups.”

Worldwide shipments of all types of mobile PCs – including both conventional and touchscreen models – shrank a steep 5,1% during the April to June period compared to the first three months of the year.

This represented the first time the notebook PC market experienced a sequential decline since the second quarter of 2002, during the dot-com bust. The mobile PC industry this time faced tough competition from media tablets, depressing sales.

While unit shipments declined in the second quarter, the market for notebook PC touch screens actually expanded based on another growth metric: panel area. Mobile PC touchscreen-panel shipments measured in terms of square-inches rose by 3,4% in the second quarter compared to the first. This indicates that display sizes for touchscreen notebooks are expanding.

Notebook touch panels sized 11,6-inches or smaller accounted for 36,8% of total shipments in the second quarter, down from 52,7% during the previous quarter. Meanwhile, combined shipments of 13,3-, 14-, and 15,6-inch laptop touch panels, which have emerged as the mainstream sizes, jumped to 57,1% of the total market, up from 40,1% in the first quarter.

Although touch panel shipments by area increased quarter-on-quarter, prices of touch panels fell significantly amid intensifying competition. The average selling price of laptop touch panels dropped more than 10%, despite growing demand for larger touchscreen panels.

Meanwhile, the utilisation of low-end technologies has been on the rise. For example, the use of soda lime for the cover glass of a notebook touch panel has increased, replacing aluminosilicate, which made up 35,7% of the cover-glass market in the second quarter, down from 65,7% in the previous quarter.

The growing adoption of low-end technologies in the notebook PC sector indicates ongoing efforts in the market to cut touch-panel costs while expanding touchscreen notebook PC displays to be as large as those used in conventional notebook PCs.

Traditional clamshell PCs in the second quarter accounted for 75% of total touchscreen notebooks, up from 58% during the same period in 2012. Meanwhile, the market share for high-end detachable-type touchscreen notebook PC fell to 11,5%, down from 23,7%. Development costs for clamshell notebooks are lower than those of other form factors, prompting greater participation from PC makers.

Amid increasing competition, display supplier TPK Holding from Taiwan lost share during the second quarter in the notebook PC touchscreen panel market.

The company’s share of market dropped to less than 50%. Meanwhile, AU Optronics, also from Taiwan, and China’s Shenzhen O-Film Tech posted rapid growth during the same period. Notebook PC makers on the whole have been diversifying touch screen panel suppliers to reduce the prices of the panels.

The market for controller integrated circuits (ICs) used for the laptop touch screen panels was also hit by fierce competition. California-based Atmel, which previously led the market, lost ground to Taiwan’s ELAN Microelectronics in the second quarter. Two other entities expanded their market share – Synaptics, also of California; and eGalax-eMPIA Technology, another Taiwanese maker.