Now that Korean equipment suppliers have released their Q4’16 earnings results, we are able to make some pretty interesting comparisons between FPD equipment companies as well as determine the performance of the sector as a whole in our Quarterly Display Supply Chain Health Report.
Aggregating the company results for dedicated FPD equipment companies as well as the FPD equipment and FPD equipment/Other divisions of bigger/more diversified companies, we show the FPD equipment market up 26% Q/Q and 69% Y/Y as shown in Figure 1. Clearly, it was a great quarter and possibly a record quarter for the FPD equipment market.
Figure 1: Q1’15 – Q4’16 FPD Equipment Revenues
Source: DSCC's Quarterly Display Supply Chain Financial Health Report
By company, Applied Materials had the highest quarterly revenues of $452M and a 16.4% share as shown in Table 1, followed by Canon at an estimated $430M and Nikon at an estimated $380M. SFA Engineering, ULVAC and AP Systems rounded out the top 6. The leading customers in Q4’16 were Samsung’s Tangjeong A3 OLED fab, HKC’s 8.6G a-Si fab, BOE’s Ordos LTPS LCD fab and Tianma’s 5.5G OLED fab. Nikon and Canon revealed that 36 litho tools were installed in Q4’16 with Nikon accounting for a 67% share. We identified those tools by fab and show 10 tools going to a-Si LCD fabs, 10 tools going to LTPS LCD fabs and 16 tools going to OLED fabs. By substrate size, 10 tools were at 8.5G+ with 26 tools at 6G or smaller.
Table 1: Q4’16 FPD Equipment Revenues, Share and Growth
For 2016, based on the suppliers below, we show FPD equipment revenues rising 51% to $8.4B. Only Coherent's revenues are significantly mixed with non-FPD businesses. As we account for other suppliers, largely in the color filter, cell, module and automation markets, the FPD equipment market should be over $12B. The growth of 51% may likely remain the same however. Of the suppliers below, Nikon led with $1.44B, up 111%, followed by Applied Materials at $1.21B, up 28%, and Canon at $1.05B, up 67%. It is not surprising that litho suppliers Nikon and Canon were in the top 3. The number of litho tools used in LTPS and oxide fabs increases significantly relative to a-Si, outpacing the growth of deposition tools. We expect to see Nikon and Canon remain at the top in 2017 due to the number of new LTPS backplane fabs as well as a result of the high price for 10.5G litho tools. Fortunately, we hear the TACT of the Nikon 10.5G tools is improving over their 10G tools, but panel manufacturers have little choice but accept Nikon’s prices due to the lack of a competitor at 10.5G. Canon will also significantly benefit from its evaporation business through its Tokki subsidiary. With Canon expected to gain share in exposure tools and sell out its evaporation capacity, we believe they should be #1 with well over $2B in equipment revenues in 2017. It is fortunate that Nikon and Canon are doing well in FPD exposure tools as their camera businesses are hurting. Applied Materials should also have another good year with its encapsulation tool set to grow rapidly as flexible OLED capacity takes off. Applied’s CVD tools will likely account for the highest share of its revenues with PVD, eBeam test, eBeam review and new tools under development also contributing. SFA Engineering, ULVAC and Coherent rounded out the top 6 for 2016.
Table 2: 2016 FPD Equipment Revenues, Share and Growth
In terms of financial performance for the sector as a whole:
Table 3: Valuation Parameters for FPD Equipment Companies
Table 4: Q1’17 Stock Price Growth
The Quarterly Display Supply Chain Financial Health Report also compares and aggregates FPD equipment supplier results for bookings, backlog, inventories, liquidity, cash flow from operations and free cash flow. Results are provided in Powerpoint slides and an Excel pivot table. Market share is provided by supplier, technology, substrate size, etc. in the lithography, excimer laser annealing and OLED deposition markets in the Quarterly OLED Supply/Demand and Capital Spending Report. These segments are also forecasted out to 2019. Contact firstname.lastname@example.org for more information. For those interested in learning more about the FPD equipment market, executives from DSCC, Applied Materials and Kateeva as well as OLED panel suppliers BOE Technology, LG Display and Royole will be presenting at the SID Business Conference being managed by DSCC on May 22nd in LA, CA during SID’s Display Week.
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