Display Glass Shipments to Decline 4% in 2020, Revenues to Decline 8%

Published May 4, 2020

Display glass shipments are expected to decline by 4% in volume terms in 2020, and revenues will decline by 8% this year, according to the latest update to DSCC’s Quarterly Display Glass Report, released this week. Shipments in Q1 increased by 1% in volume terms, but shipments are expected to decline Q/Q in both Q2 and Q3 as the display industry responds to the demand slowdown caused by the COVID-19 pandemic.

The Display Glass Report tracks glass capacity and shipments for all major glass makers across all LCD and OLED display fabs. The report combines DSCC’s comprehensive insight into industry capacity and utilization with in-depth understanding of display glass and the supply chain. The report outlines capacity by region in each of the four countries of display glass production: Japan, China, Taiwan, and Korea, and covers glass shipments in Gen sizes from 1 to 10.5. The report details glass shipments for the three major suppliers to the display industry, Corning, AGC, and NEG, along with Other glass suppliers. The report includes a supply matrix covering 26 panel makers.

Industry glass capacity declined in Q1 as Corning took steps toward shutting down manufacturing at its site in Shizuoka, Japan. Also in Q1, LG Chem announced that it would shut down its display glass business during 2020. DSCC estimates that glass capacity in Q1 declined by 4% Q/Q from 153 million square meters in Q4 2019 to 146 million square meters in Q1 2020, with Corning showing the largest drop and AGC increasing capacity Q/Q as it ramps up Gen 10.5 capacity for CSOT in China.

Display Glass Shipments by Gen Size, 2019-2020

Source: DSCC Quarterly Display Glass Report

Looking at the glass market by gen size in the first chart here, the market declined Q/Q in most gen sizes, but an 11% increase Q/Q in Gen 10.5 glass shipments, primarily due to shipments to CSOT, allowed the total market to record a 1% increase in Q1 2020 compared to Q4 2019. While Gen 8.5 glass represented more than half of the industry in 2018, glass volume in that size will decrease steadily throughout 2020 due to the Korea closures, while growth will come from Gen 8.6 and Gen 10.5 glass added in China. Gen 8.5 will represent only 41% of glass demand in Q4 2020, while Gen 10.5 glass will increase its share to 13% by the end of the year.

A view of the market by region demonstrates the increasing dominance of the display industry by China panel makers. China’s share of the display glass market was only 40% in Q1 2018, but will increase to 59% by Q4 2020; Korea’s share was 27% at the beginning of 2018 but will decline to only 10% by the end of this year.

Display Glass Market by Region, 2019-2020

Source: DSCC Quarterly Display Glass Report

The report gives a split of the glass market by backplane type, showing the growing importance of more advanced backplanes in the display industry. Both Corning and AGC in 2019 announced new glass products designed for use in oxide TFT fabs, and those two makers plus NEG have special glass products focused on LTPS backplanes. Whereas the industry workhorse amorphous silicon (a-Si) backplanes continue to make up about 90% of display glass demand, the share of display glass from LTPS/LTPO and oxide TFT lines is increasing and will reach 11% by Q4 2020.

OLED displays require an advanced glass, either LTPS (for small gen) or oxide (for large gen), but most OLEDs consume only piece of glass per display, so the growth of OLED does not help to drive glass demand, and may reduce glass demand to the extent that OLED cannibalizes LCD.

The report provides tables of glass prices by Gen size for a-Si and LTPS glass. Glass is priced in Japanese yen across the industry, and the report provides average prices. Glass prices in the display industry vary by volume and by customer. High volume customers with strategic relationships (NEG: LGD, AGC: CSOT, Corning: Samsung, BOE) get the lowest prices, slightly lower than the average, while lower volume customers get higher prices. Glass prices in Q1 2020 averaged ¥1144 (US$10.72) per square meter, down 4.6% compared to Q1 2019, and down 1.2% Q/Q. Glass price declines are expected to continue to be moderate for the rest of 2020, despite the industry slowdown.

The resulting outlook for industry revenues is shown in the final chart here, with revenues by glass maker. Corning revenues declined in Q1, and we expect Corning display glass revenues to continue to decline throughout 2020 as Samsung shuts down LCD capacity and Corning’s two new Gen 10.5 customers, BOE-Wuhan and Foxconn/SIO-Guangzhou, are slow to ramp production due to weak demand. In contrast, AGC revenues will be closer to flat Y/Y, down 1%, as AGC benefits from higher Gen 10.5 volume at CSOT. NEG, which relies on LGD for about half of its revenues, will also see a revenue decline as LGD shuts down LCD capacity.

Note that for glass joint ventures, we attribute revenues to the company with melting & forming. NEG has a joint venture with Tunghsu, and Corning has a JV with Irico, and we attribute revenues from these JVs to NEG and Corning, respectively.

Display Glass Revenues by Manufacturer, 2019-2020

Source: DSCC Quarterly Display Glass Report

DSCC’s Quarterly Display Glass Report tracks glass capacity and shipments for all major glass makers across all LCD and OLED display fabs, providing pivot tables that allow splits by region, panel maker, backplane type, and TFT Gen Size. The report includes prices for a-Si and LTPS glass for Gen Sizes from 1 to 10.5, and includes quarterly history from Q1 2018 and a forecast through Q4 2020. Readers interested in subscribing to DSCC’s Quarterly Display Glass Report should contact Gerry McGinley at 770-503-6318, e-mail gerry@displaysupplychain.com, or contact your regional DSCC office in China, Japan or Korea.

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Written by

Bob O'Brien