LCD panel supplies are growing in the 40 to 43in TV market, according to new data from IHS. The shift in demand is cannibalizing sales of 32in panels, which have been the primary consumer preference. Demand for 50 to 55in panels is also increasing and is expected to jump about 11 percent to 41 million in 2016. For those keeping count, total panel shipments are expected to drop about 3 percent to 257 million units next year. However, total area demand is expected to grow 3 percent in the same time period to 125.9 million square meters.

Suppliers have recognized the shift in the market. As consumer preferences change, the replacement cycle for TVs becomes slow. Additionally, manufacturing capacity in China is growing, which is pushing down prices on LCD panels. Manufacturers have also been reducing prices to bolster demand from TV brands going into the holiday season. All these factors are squeezing profitability in the smaller panel market. For this reason, manufacturers can be expected to concentrate on the market for 40in or larger.

Meanwhile, sales of TVs 40in and larger passed 50 percent for the first time in 2012. This year, sales of 40 to 49in TVs alone are expected to be about 52 percent of total sales, with larger TVs making up an additional 20 percent. IHS projects that by 2019, sales of TVs bigger than 40in will make up 83 percent of sales.