DSCC’s Latest Long-Term OLED Forecast in OLED Shipment & Fab Utilization Report

Published October 1, 2019

Mobile OLED panel shipment revenue will increase to nearly $36 billion by 2023 and OLED TV and monitor panel revenue will add another $10 billion by that year, according to the Q3 update of the DSCC Quarterly OLED Shipment and Fab Utilization Report. The report includes Q2 actual shipments plus DSCC’s forecast by quarter for the rest of 2019 for smartphone models for the top brands, along with shipment data by application for ten different applications for OLED display panels.With updated actual shipments, and a revised outlook for the 2nd half, DSCC now expects full-year 2019 OLED smartphone panel shipments to reach 487 million, a 12% Y/Y increase, based on a strong 2nd half as shown in the first chart here. Whereas in Q2 the Samsung brand accounted for 48% of OLED smartphone panel shipments and the top four Chinese brands (Huawei, Oppo, Vivo, and Xiaomi) accounted for nearly another 40%, Apple will resume the #2 position in the 2nd half (after Samsung), taking 20% of OLED panel shipments.

Quarterly OLED Smartphone Panel Shipments by Brand, 2018-2019

Source: DSCC Quarterly OLED Shipment and Fab Utilization Report

The report includes pivot tables for analysis by application, substrate type, panel supplier, brand, and model, and includes output in units, revenues, area, ASPs, PPI, and Average Diagonal.

While Samsung Display continues to dominate the market for OLED smartphone panels, supplying 81% of these panels in Q2 2019, the 2nd largest application in unit terms, smartwatch, is much more competitive across many panel makers, as shown in the next chart. While LGD held the largest share for four consecutive quarters through Q1 2019, their share fell sharply in Q2 with reduced shipments for the Apple Watch, and Everdisplay (EDO) took the top spot. We expect that LGD will resume its lead position in the 2nd half with strong seasonal shipments for the Apple Watch. DSCC expects OLED panel shipments for the Apple Watch to reach 25.5 million for the full year 2019, up from 23.5 million in 2018.

Quarterly OLED Shipment Share by Panel Supplier for Smart Watch, 2018-2019

Source: DSCC Quarterly OLED Shipment and Fab Utilization Report

For the full Smart Watch market, we expect 2019 OLED panel shipments of 73.1 million units, a 45% increase Y/Y. Even with the smallest average screen size of only 1.5 inches, Smart Watches will represent the third largest application in revenue terms (after smartphone and TV), with $1.6 billion in Smart Watch OLED panel sales in 2019, a 27% increase over 2018.

The report includes details of utilization for each OLED and LTPS LCD fab in the industry, with pivot tables to sort by panel maker, gen size, substrate type, backplane type and more. An example of the utilization data is shown in the next chart, showing the increase in UT% in flexible OLED fabs which corresponds to the seasonal demand for high-end smartphones. Even with the seasonal demand, flexible OLED UT% will not exceed 61% in the 2nd half, demonstrating the severe overcapacity in the industry. Rigid OLED fab utilization, on the other hand, remains relatively healthy in the 80s.

Fab Utilization Rate by Technology in 2019

Source: DSCC Quarterly OLED Shipment and Fab Utilization Report

The report also includes DSCC’s five-year forecast for OLED panel shipments by application, screen size category, resolution, and substrate type and covers units, revenue, area, and average selling price.

DSCC expects that OLED panel unit shipments will increase at double digit rates to 2023 and beyond, increasing to 1.06 billion panels. Because of huge capacity coming online in 2020 in both mobile OLED and OLED TV, the growth in both units and revenue will peak next year, with 27% unit growth and 25% revenue growth. Overall revenues for OLED panels are expected to increase from $26.5 billion in 2018 to $46.2 billion in 2023.

By application, the smartphone revenue share is expected to fall from 85% in 2018 to 63% in 2023 due to declining prices for smartphone panels and faster OLED growth in other applications. OLED TVs are expected to grow from 8% of OLED revenues in 2018 to 16% in 2023, with units increasing to 12.6 million in that year. In addition, IT applications – Monitors, Notebooks, and Tablets will reach a combined $6.2 billion in revenues by 2023.

In area terms, smartphones have been the leading application until now and will maintain this position through 2020, but big growth in TV shipments resulting from LG Display’s Guangzhou expansion will allow TV to overtake smartphone for the largest application by area by 2021, and TV will continue to be the leading application for OLED display area, with smartphones continuing in 2nd place.

OLED Panel Demand by Application, 2017 - 2023

Source: DSCC Quarterly OLED Shipment and Fab Utilization Report

For OLED TVs, as I reported last week in outlining DSCC’s Quarterly OLED Supply/Demand and Capital Spending Report, we have revised our OLED TV forecast downward for 2020-2023, based on a few factors:

  • The widening price gap between OLED TV panels and LCD TV panels as LCD is in severe oversupply. LCD 65” prices are already lower than OLED 55” prices, and 65” OLED is competing with 75” and 82” LCD.
  • Continuing improvements in LCD TV technology, including miniLED backlights and dual-cell LCD, which reduce the advantages of OLED.
  • The possibility of LGD delaying its plans for mass production of one or more fabs.

We think that LGD will find it challenging to maintain high prices for OLED TV panels. LGD will need a profitable OLED TV business to continue to fund investment in capacity, since the company will not generate much cash from its LCD operations. OLED TV panel prices have been stable in 2019, and while that sustains LGD’s profitability, the gap with LCD has led to disappointing sales results.

LG Display is working to promote OLED TV in order to maintain its premium image (see article on LGD’s promotion with Best Buy in this issue), but they will find it increasingly challenging to sustain high prices for OLED TV panels. Therefore, we believe they will add capacity at a more measured pace to slow down price erosion.

DSCC has recently released its second quarter Quarterly OLED Shipment and Fab Utilization Report with a five-year forecast of OLED shipments and revenues by application, supplier and size. The report also tracks and compares OLED and LTPS LCD fab utilization and provides analysis of the supply chain for all OLED applications. For more information about the report, please 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