Market observers expect that several China touch panel makers will exit the market in the second half of 2015 due to several reasons, including weak demand for Windows 10, weakening demand in China's smartphone market and intensifying price wars.
Price competition has intensified since 2014 as vendors look to cheaper solutions to lower end-market pricing for smartphones as the market becomes saturated. Several China touch panel makers exited the market as a result of this trend in 2014 while several major Taiwan makers saw their performances suffer.
China's smartphone market meanwhile is slowing down and local telecom providers are cutting or have stopped subsidies for new smartphone purchases, which helped spur smartphone sales in China in the past.
Apple is growing in China but it has limited ties with China smartphone touch panel makers so local makers have not been able to take much advantage of the growing iPhone demand in China.
Several makers in China noted that 5-inch thin-film touch panel pricing reached US$4 in the second quarter of 2015, down from US$6 in the previous quarter, and is expected to further drop below US$4.
The makers also noted that some second- and third-tier suppliers have even lowered their pricing for 7-inch thin-film tablet touch panels to as low as US$2, which will heavily influence their performances in 2015.
Notebook demand is still weak, the makers said, adding they do not expect Windows 10 to drive forth any significant demand aside from 2-in-1 units that makers have started to prepare as of June for release in the second half of 2015.
