As a new year approaches, the global panel industry is primed to cash in on various continuing advances aimed at producing larger and better-quality displays. Even so, the specter looms of a possibly serious oversupply situation, caused by the coming online of new fabs, mostly located in China.
For large-sized displays, the oversupply will be the result of ongoing aggressive investment in China forecast to drive growth of more than 10% in glass-area capacity yields. Chinese panel makers, already frazzled by various stresses, could find themselves plunged further into perilous territory.
By all accounts, China continues to be the highest-profile player in the overall displays market. The giant Beijing-based BOE started mass-producing panels this year at its Gen 10.5 fab—a state-of-the art, latest-generation facility. Meanwhile, less mightily equipped counterparts, such as CEC-Panda and CSOT, began mass production of their panels at Gen 8.6 fabs during Q2 this year, with CSOT planning a shift to a 10.5 fab in Q1 2019.
Area capacity from all Chinese fabs is projected to reach 155 million square meters in 2019, up from 120 million square meters this year.
Larger panels for TVs and smartphones
As demand grows for larger TV panels, the panels will increasingly be produced at Gen 8.5, Gen 8.6, and Gen 10.5 fabs. But as Gen 10.5 fabs stabilize and shipment volumes grow, Gen 8.5 fabs, being older than their 10.5 counterparts, will be less competitive in their bid to make super-large-sized panels.
To this end, some suppliers at the older fabs are considering a restructuring in capacity to produce displays using OLED and QD-OLED technology, while some suppliers plan to increase shipment volumes for IT panel products, such as monitors and displays for laptops.
In smartphones, full-screen displays dominated in the high-end smartphone space in 2018, and its influence will spill over to the mid- and low-end segment after this year.
With full-screen designs, the average size of smartphone displays will rise significantly, in turn boosting the shipment share in the market of smartphone panels 6 inches and above. Next year, shipments of full-screen display panels—including those for low-end smartphones—are forecast to reach 1.4 billion units, compared to 1.0 billion units by the end of 2018.
Full screens are expected to be the standard design for new smartphones in 2019, and the next challenge in display technology for smartphones will be to come up with full-screen displays without a notch cut for in-camera and 3D sensors.
The case for AMOLED
For premium smartphone models, AMOLED is used by every smartphone supplier, not just by Apple but also by the Chinese smartphone brands. In fact, the Chinese brands have taken market share from global smartphone brands.
For 2019, full-screen displays are expected to replace legacy 16:9-aspect display products. As a result, demand for amorphous silicon (a-Si) TFT LCD will erode, with shipments of both AMOLED and low-temperature polysilicon (LTPS) TFT LCD expected to increase in 2019. What will be interesting to see in 2019 is how market demand pans out for foldable handsets with flexible AMOLED displays.
Flexible AMOLED is the best solution to support full-screen displays, but the high price tag for the technology has caused some smartphone brands to resort to alternatives like LCD or rigid AMOLED. Because of this, suppliers of flexible AMOLED may have suffered from low fab utilization this year.
Many Chinese and Japanese panel makers will try to ramp up flexible AMOLED fabs in 2019, but they may need more time to stabilize the technology. To compensate for the low utilization of flexible AMOLED fabs, some panel suppliers will try to launch foldable AMOLED.
4K, 8K and OLED
In the ultra-high-definition TV panel space, panel makers from China and Taiwan are hoping to ignite interest in 8K panels, touting the high numbers in 8K resolution. Chinese brands are especially eager to see significant 8K panel volume materialize in the country, as the number "8" is considered very lucky in China.
Samsung, too, is aggressively promoting 8K LCD TVs, along with other TV brands similarly indicating willingness to join the 8K TV market starting in 2019. IHS Markit predicts that the global 4K panel market next year will reach some 142 million sets—or 52% of the total display panel space. Meanwhile, the nascent 8K panel market will top out at 700,000 sets in 2019. The bulk of the market, however, still belongs to 4K, with 4K shipments in 2019 expected to reach some 142 million sets, or 52% of the total display panel space.
In OLEDs, Sony launched an OLED model last year, and both Chinese and Japanese brands are entering the business as well. LG Display, which had been the first manufacturer to produce an OLED panel, is investing in a new Gen 8.5 fab in the southern port city of Guangzhou in China, with mass production possible starting in mid-2019.
Global demand in 2019 for OLED TV panels is projected to reach 4 million units in 2019, IHS Markit forecasts show.
Growing automotive TFT LCD market
A robust area for displays is automotive, with the automotive display market projected to grow more than 11% this year to 164.2 million units. The center stack was a source of expansion this year, but head-up displays and e-mirrors will outperform other applications and become the major market drivers in 2019.
Ricky Park is Director, Displays Outlook, at IHS Markit
Posted 19 December 2018