Capacitive touch panel demand has been increasing significantly in 2010. In addition to demand from 5-inch and larger tablet PCs, demand from the handset market is also picking up. As a result, Young Fast Optoelectronics and J Touch expect their resistive touch panel shipments to drop to around 50% of its total shipments in the fourth quarter of 2010 and to 40% or less in the first quarter of 2011.

It has become a trend for capacitive touch technology to replace resistive touch technology. The prices for capacitive touch are very competitive and it has expanded to the mid-range to low-end market segments.

With their thin-film based capacitive touch panel shipments increasing, Young Fast and J Touch estimate their capacitive touch revenue share will increase to over 60% in 2011. They are certain that capacitive touch - both film-thin and glass-based - will replace resistive touch as the leading technology in the touch panel market in 2011.

Capacitive technology becoming the mainstream technology will have certain impacts on the overall market, especially for film-based suppliers who used to be able to meet some of the demand from the high-end segment. However, with glass-based capacitive touch taking over the high-end market, film-based suppliers have been forced to turn to the mid-range and low-end segments, with their overall ASPs and production value expected to be affected.

For film-based touch panel makers, medium-size tablet PCs are an important segment, and if the touch panel makers are able to lower costs and speed up mass production, they may be able to maintain revenue growth in 2011.

Young Fast expects capacitive touch revenues to account for up to 60% of its total revenues in 2011, and expects shipments of capacitive touch panel to come close to or over 50% of its total shipments in the first quarter of 2011. J Touch has started volume shipments of medium-size film-based capacitive touch panels, and expects its capacitive touch panel revenues to reach over 60% of its total revenues in 2011.