COVID-19 Hits Rigid OLED Utilization
Samsung’s rigid OLED lines reached nearly 90% utilization for much of 2019, and were expected to continue that trend in 2020, but have been hit hard by the demand slowdown associated with the COVID-19 pandemic. While rigid OLED UTs are still higher than flexible UTs, they’ve taken a sharp reduction in Q2, according to the latest update to DSCC’s Quarterly OLED and Mobile LCD Fab Utilization Report released this week. The report details monthly capacity and utilization for OLED lines and LTPS LCD lines, with capability to sort by parameters such as country, substrate type, supplier, form factor, and TFT Generation.
The first chart from the report included here shows the total monthly industry TFT capacity for flexible and rigid OLED and for LTPS LCD. While total OLED capacity surpassed LTPS LCD in 2018, the component parts rigid and flexible remain lower than LTPS LCD, but flexible OLED capacity is closing the gap in 2020. The shutdown of Japan Display’s Hakusan plant in mid-2019 removed roughly 7% of the industry’s LTPS LCD capacity, and expansions by BOE in Mianyang and Chengdu will continue to increase flexible OLED capacity.
OLED and Mobile LCD TFT Capacity, 2018-2020
The next chart shows TFT Input across the same splits. Input of both LTPS LCD and flexible OLED increased in the second half of 2019 showing similar seasonal patterns, but rigid OLED started to decline in mid-2019 and that decline accelerated in Q2 2020. The impact of the virus has hit Samsung’s rigid Galaxy products particularly hard, as these products have lost share to cheaper LCD products from the leading Chinese brands Oppo, Vivo, and Xiaomi in emerging markets. The three Chinese brands have aggressively captured share in non-China markets to compensate for share loss to Huawei in their home market.
Flexible OLED input in Q1 is down only slightly from Q1, with lower input by Samsung offset by higher input by BOE and others. We expect both flexible OLED input to increase dramatically in the 2nd half of 2020, based on the increased demand from new iPhone models along with increasing input by BOE and LGD to serve other brands.
OLED and Mobile LCD TFT Input, 2018-2020
The final chart here shows the resulting utilization numbers, this time with a view by quarters. We expect utilization to increase in the 2nd half for both flexible and rigid OLED, but whereas we expect flexible OLED UT% to be higher in 2H 2020 compared to 2019, that does not hold true for rigid OLED.
OLED and Mobile LCD Utilization, 2018-2020
With respect to individual fabs on flexible OLED fab utilization, Samsung’s A2 and A3 fabs are by far the largest rigid and flexible OLED fabs, in terms of capacity, respectively, and lower utilization at both of these fabs in Q2 has reduced the total industry UT%. Higher UT% on these lines in the 2nd half of 2020 will bring the industry average up. BOE’s B7 line in Chengdu will fare better than 2019 when it suffered through the loss of Huawei’s Mate 30 Pro business, but even with this recovery we do not expect B7 utilization to surpass 60%.
DSCC’s Quarterly OLED and Mobile LCD Fab Utilization Report tracks TFT capacity and utilization across 41 OLED and LTPS LCD fabs across this industry, allowing segmentation by supplier, TFT Generation, country, backplane technology, frontplane technology, and substrate type. For more information about the report, please contact Gerry McGinley at 770-503-6318, e-mail email@example.com or contact your regional DSCC office in China, Japan or Korea.