Shipments from the two major groups of suppliers in South Korea and Taiwan in May fell by 4.2% to 187.1 million units.
There was a 6.9% fall in April.
“Demand in May was impacted by declining sales to the cellphone market–the leading application for such displays–along with other key areas, including digital still cameras and portable navigation devices,” said Vinita Jakhanwal, director for small and medium displays at IHS.
“The only exception was the tablet market, where demand continued to exceed supply.”
According to iSuppli, suppliers of displays for cellphones in May trimmed their forecasts in light of weaker-than-anticipated handset shipments from Nokia and Research In Motion.
“Handset panel shipments to China during the period were also disappointing, with officials in the country cracking down hard on an illegal gray market estimated at 255 million units this year,” according to an IHS iSuppli China Research Service report.
No relief appears in sight, with the gray market in China projected to decline starting next year.
IHS iSuppli report entitled: “SMD Prices Experience Erosion in May 2011 as Demand Remains Weak.”