Display Glass Shipments Will Recover in Q3 2020

Published July 27, 2020

Display glass shipments are expected to increase in volume terms by 7% Q/Q and Y/Y in the third quarter of 2020, overall display glass shipment volume is expected to increase by 3% this year, according to the latest update to DSCC’s Quarterly Display Glass Report, released this week. Shipments in Q2 decreased by 1% Q/Q in volume terms as the display industry responded to the demand slowdown caused by the COVID-19 pandemic, but are recovering in Q3 as display demand has fared better than expectations.

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 the first half of 2020 as Corning took steps toward shutting down manufacturing at its site in Shizuoka, Japan and LG Chem announced that it would shut down its display glass business during 2020. DSCC estimates that glass capacity in Q2 declined by 4% Q/Q to 140 million square meters, with Corning showing the largest drop.

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 many gen sizes, but a 16% increase Q/Q in Gen 10.5 glass shipments from the ramping of BOE’s fab in Wuhan and the Sharp/Foxconn SIO fab in Guangzhou helped the total market to come close to flat in Q2 2020 compared to Q1. 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 58% by Q4 2020; Korea’s share was 27% at the beginning of 2018 but will decline to only 13% 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. The industry workhorse amorphous silicon (a-Si) backplanes continue to make up about 90% of display glass demand, and the share of display glass from LTPS/LTPO and oxide TFT lines is only increasing slowly because of continued a-Si additions in Gen 10.5 fabs. Glass for these more advanced backplane types will exceed 10% 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 while glass prices in the display industry vary by volume and by customer, the report provides average prices. 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 Q2 2020 averaged ¥1133 (US$10.58) per square meter, down 4.6% compared to Q2 2019, and down 1% Q/Q. Glass price declines are expected to continue to be moderate for the rest of 2020.

The resulting outlook for industry revenues is shown in the final chart here, with revenues by glass maker. We estimate that Corning revenues were roughly flat Q/Q in Q2, but we expect Corning display glass revenues to recover in Q3 with the general increase in industry utilization and as Corning’s two new Gen 10.5 customers ramp production. While we also expect AGC revenues to be close to flat Q/Q, AGC will be able to show significant growth for the full year 2020 as it benefits from higher Gen 10.5 volume at CSOT. NEG, which relies on LGD for about half of its revenues, will manage no better than flat revenues for the full year 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