Latest DSCC Display Capacity Forecast Raises China Share to 66% from 2023, 69% in LCDs
DSCC updated its capacity forecast last week as part of the deliverables from its Quarterly Display Capex and Equipment Market Share Report.
The latest forecast revealed the following highlights:
- With Korean manufacturers LGD and SDC shutting down significant LCD capacity in 2020 and 2021 and/or converting it to OLEDs at a lower volume as they retreat from subsidized China competition, regional dominance is clearly shifting once again in the display industry and it may be for good. While Japan dominated the display industry in the 1980s and 1990s, Korea dominated in the 2000s and for much of the 2010-2019 period. Taiwan emerged in the 2000s taking significant share but remained below Korea. China emerged in the 2000s and really boosted its position over the last 5 years relative to its competition as China’s Made in China 2025 plan led to significant, some may say excessive, investments in the LCD and OLED markets to create more jobs for Chinese workers. The result, Korean manufacturers LGD and SDC are retreating from their Chinese subsidized competition despite enjoying fully depreciated fabs. The lower cost labor, materials, land, various forms of subsidies and tax credits have proved too much for LGD and SDC who are quickly leaving the LCD industry. As you can see in the first chart below
- LGD’s LCD capacity is falling 24% in 2020 and 31% in 2021.
- SDC’s LCD capacity is falling even faster, down 27% in 2020 and 70% in 2021.
- Japan Display is also reducing its LCD capacity in 2020 through closing an LCD fab.
- As a result, while LGD and SDC led in LCD capacity in 2016 with 20% and 19% capacity share respectively in 2016, by 2022 they will both be out of the top 5 and account for just a combined 9% share.
- LGD’s LCD capacity share is falling from 16% in 2019 to 7% in 2022;
- SDC’s LCD capacity share is falling from 12% in 2019 to just 3% in 2022;
2020-2021 LCD Capacity Changes at LGD, SDC and JDI
2016-2022 LCD Capacity Share
- This sharp decline at LGD and SDC also has implications for LCD supply and demand and leadership in China. As indicated:
- LCD capacity is expected to fall 3.1% in 2021. This is the first decline in LCD capacity since TFT LCDs emerged in the 1990s. With demand likely to rebound in 2021 while supply is shrinking, the LCD surplus will narrow significantly.
- Total display capacity is expected to fall 1% in 2021 with OLEDs included.
- Looking at LCD and OLED TV optimized fabs, capacity will fall 2% in 2021 and the surplus will remain in the mid-single digits for some time as indicated at https://www.displaysupplychain.com/blog/dscc-revises-display-forecast-for-covid-19-impact-1 for LCDs. Any supply disruptions could challenge the TV industry to meet demand and lead to sharp price increases.
- BOE became #1 in LCD capacity in 2019 and is expected to widen its advantage on 5% CAGR in LCD capacity from 2019-2025. China Star is expected to rise to #2 from 2022 on a 9% CAGR. Innolux, AUO and HKC will round out the top 5 from 2022. Any additional shutdowns will further tighten the surplus.
- If China Star acquires CEC Panda excluding CHOT as expected, China Star’s share will rise from 12% - 14% in 2021-2025 to 18% - 20% with BOE at 22% - 23%. As a result, those two companies will control nearly half of the LCD market and enjoy extensive leverage with customers and suppliers.
- We now see China reaching a 66% share in display capacity from 2023-2025, up from 62%. China is the only region growing from 2019-2025 rising at a 9% CAGR with Korea down 13%, Taiwan flat and Japan down 1.3%. Korea’s share shrinks to 9% as it exits LCD TVs in Korea. Taiwan’s share drops to 20% as its capacity remains flat.
- In just LCDs, China’s share is expected to be even more dominant reaching 69% from 2023-2025, up from 36% in 2017. Korea’s share is expected to fall from 21% in 2019 to just 2% in 2025 on a -31% CAGR. Taiwan’s capacity and share will remain relatively flat.
- We still see Korea leading in OLED capacity, but its advantage will shrink considerably over the forecast. All regions are expected to enjoy healthy growth with China growing at a 42% CAGR from 2019-2025, Japan 21% and Korea at a 10% CAGR. Korea’s share is expected to shrink from 90% in 2018 to 51% in 2025 with China’s share surging from 8% in 2018 to 47% in 2025. Although there is still a lot of uncertainty regarding China’s OLED TV investments, we expect China’s subsidies to be focused there in the near future now that they have accomplished their goal in LCD TVs.
- Looking at just mobile OLED capacity by country, China overtakes Korea in 2024 rising at a 27.5% CAGR from 2019-2025 to a 53% share in 2025. Korea’s mobile OLED capacity rises at just a 1.6% CAGR over this period unless SDC re-starts its A5 project which is currently stalled as it adds capacity at A4.
2016 – 2025 Display Capacity
Display Capacity Share by Country
LCD Capacity Share by Country
OLED Capacity Share by Country
Mobile OLED Capacity Share by Country
Other highlights from the report include:
- 2024 display capacity reduced by 3% vs. previous issue on fab closures/delays and removing lower risk OLED investments.
- We now show 2019-2025 capacity growing at just a 2.5% CAGR with LCDs rising at a 0.9% CAGR and OLEDs rising at a 19% CAGR. The OLED share rises from 6% in 2019 to 14% in 2025.
- In the case of mobile OLEDs vs. LTPS LCDs, the OLED share rises from 49% in 2019 to 65% in 2025. Flexible OLEDs should reach a 74% share of mobile OLED capacity in 2025 from 57% in 2019.
- In terms of capacity by application, LCD TVs will continue to dominate capacity and are still growing, rising at a 1.3% CAGR but losing share from 71% in 2019 to 67% in 2025. OLED TVs are expected to enjoy the fastest growth, rising at a 34% CAGR with their share rising from 1% in 2019 to 7% in 2025.Mobile OLEDs are expected to grow at a 10% CAGR and reach a 7% share, up from 4% in 2019. Mobile LCDs are expected to fall at a 0.6% CAGR and see their share stay flat at 4%. Other LCDs are expected to fall at a 0.5% CAGR with their share falling from 18% to 15%.
- a-Si is expected to decline from an 84% share of backplane capacity in 2019 to 79% in 2025 on greater demand for advanced TV technologies and increased penetration by mobile OLEDs. a-Si capacity is expected to rise at a 1.4% CAGR despite fab closures in Korea as China continues to invest through 2022. Oxide is expected to rise from 8% in 2019 to 11% in 2025 on the growth in OLED TV capacity, rising at a 9% CAGR and overtaking LTPS capacity. LTPS is expected to grow at a 2.6% CAGR and maintain an 8% share throughout the forecast. LTPO is expected to grow at an 83% CAGR to enable variable refresh and lower power for 120Hz displays, rising from a 0% to a 2% share over the forecast.
- Samsung will maintain a dominant position in mobile OLEDs throughout the forecast, with its share not falling below 50% until 2022 and only falling to 40% in 2025 despite just a 1.4% CAGR due to its strong position in both rigid and flexible OLEDs. BOE is expected to overtake LGD in 2020 for #2 on a 28% CAGR as LGD has shut down some G4.5 capacity while BOE expands. Visionox is expected to overtake LGD for #3 in 2022 on a 27% CAGR with China Star and Tianma overtaking LGD in 2023 growing at 64% and 25% CAGRs respectively.
- In unyielded flexible mobile OLED capacity, we show SDC holding onto its advantage although BOE significantly closes the gap. SDC’s share falls from 59% in 2019 to 29% in 2025 on just a 2.5% CAGR. BOE’s share surges from 14% in 2019 to 27% in 2025 on a 29% CAGR. Visionox is expected to hold the #3 position in 2022 and 2023 with China Star and Tianma tying for #3 in 2024 and China Star leading Tianma and Visionox in 2025.
- SDC and LGD are converting their capacity at a much faster rate than Chinese manufacturers that are still adding G10.5 LCD capacity. Tianma is the one Chinese LCD manufacturer that is rapidly shifting to OLEDs due to no LCD TV investments. SDC’s capacity will now be >50% OLED from 2021 on LCD fab closures/conversions with LGD and Tianma expected to reach 45% and 37% respectively in 2025.
OLED Share of Total Display Capacity by Manufacturer
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