Panel makers have order visibility for handset panels for 3G handsets through April 2014 but are pessimistic the orders will fade out through the second quarter of the year as demand for 4G units in markets such as China is expected to increase, according to industry sources.
Handset vendors and telecom providers are expected to push 4G units in 2014, which is causing handset vendors to clear out inventories in the hope that older products will be replaced by newer ones by the third quarter, the sources said.
As vendors clear out inventories, panel makers are seeing declining orders for 3G units, which may continue throughout the year as handset vendors may push 4G units more aggressively in other emerging markets as well, the sources added.
Meanwhile, the sources noted that smartphone vendors are increasingly looking to cheaper supply chain solutions as a means to bump up their competitiveness in the market.