More Highlights from Our Latest Quarterly Capex Report

Published June 17, 2019

I recently finished our Q2’19 Quarterly Display Capex and Equipment Service Report which was expanded by 21 additional categories this quarter to 64 different equipment segments as mentioned at​ https://bit.ly/2XAUnuV. However, there were a number of other additional deliverables and highlights.

  • 2018-2023 equipment spending was increased to $88B. It is primarily a result of increasing capacity at HKC H2 and H4 and pulling in BOE B12 and B15.
  • While mobile has dominated the past 3 years, TVs are expected to lead in 4 of the next 5 years helped by spending on different types of OLED TVs such as WOLED, QDOLED and IJP OLED. From 2018-2023, TVs are expected to lead with a 64% to a 36% advantage.
  • Oxide is expected to gain a significant share of spending by backplane technology, rising annually due to its use as a backplane in OLED TV and 8K LCD TV fabs as well as a lower cost alternative in mobile LCD and mobile OLED fabs.
  • LTPS is expected to be up and down, rising and falling with mobile spending. a-Si is expected to peak in 2019 on 10.5G and decline through the rest of the forecast as oxide gains. From 2019 – 2023, LTPS is expected to lead with a 35% share followed by oxide and a-Si at 33% each.

Display Equipment Spending by Backplane Technology

Source: DSCC’s Quarterly Display Capex and Equipment Service

  • By manufacturer, BOE is now expected to account for a 32% of 2018-2023 spending followed by China Star at 13%, LGD at 12%, SDC at 10% and HKC at 8%.. No other supplier will account for over 8% of spending. Note, we added Inco-Flex this quarter which was previously known as Kuntech.
    • In just OLEDs, BOE is expected to lead in spending from 2018-2023 with a 30% share followed by LGD at 20%, SDC at 16%, China Star at 11% and Visionox at 10%.
    • In just LCDs, from 2018-2023, BOE is expected to lead with a 34% share followed by HKC at 21%, China Star at 17%, Sharp at 12% and CEC Panda at 11%.
  • By country, China is expected to dominate display equipment spending annually through 2022. We show Korea leading in 2023 on the potential for a G10.5 QDOLED fab from SDC. From 2018-2023, we show China accounting for an 81% share with Korea at 17% and Japan at 2%.
    • In just LCDs, China is expected to be even more dominant, accounting for at least a 90% share each year from 2017 – 2023 with a 100% share from 2019.
    • In just OLEDs, China is expected to lead Korea with a 68% to 28% share advantage, leading annually from 2018-2022.
  • Flexible fabs are expected to account for 61% of OLED equipment spending from 2018-2023. Flexible fabs are expected to account for a majority of spending in 2016, 2017, 2018, 2020 and 2021.
  • By glass size, G6 is expected to lead in equipment spending from 2018-2023 with a 37% to 33% share advantage over G10.5 with G8.5/8.6 in 3rd with a 26% share. G6 led in 2016-2018 and is expected to lead in 2021—2022. G10.5 is expected to lead in 2019-2020 on the high cost of G10.5 equipment, the scale of those fabs and reduced mobile spending in those years.

Display Equipment Spending by Glass Size

Source: DSCC’s Quarterly Display Capex and Equipment Service

  • In terms of spending by segment:
    • Backplanes: From 2018 - 2023, we show $42B in backplane equipment spending. We show exposure leading with a 23% share on $9.6B in revenues followed by CVD with an 11% share, PVD with an 8.5% share and dry etch and coater/developers each with an 8% share. Market shares by supplier were provided in the slides for:
      • Total exposure
      • LCD exposure
      • OLED exposure
      • CVD
      • ELA
      • PI Curing
      • Other market share data and design wins are available in the pivot tables
    • OLED Frontplanes: From 2018-2023, we see $19B in OLED frontplane equipment spending. FMM VTE/Source is expected to lead with $5.1B and a 27% share. Open Mask VTE/Source is expected to be the #2 category with a 14% share on $2.6B in spending. Inorganic TFE is expected to be the #3 category with a 13% share on $2.4B in spending. We expect IJP to potentially become the #4 category with a 12% share on $2.2B in spending, mostly in 2022 and 2023 as soluble OLED and QD lifetimes improve. Market shares were provided for:
      • FMM VTE
      • Open Mask VTE
      • Inorganic TFE
      • Organic TFE
      • LLO
      • Other market share data and design wins are available in the pivot tables
    • CF equipment: From 2018-2023, we see $6.7B in CF equipment spending led by exposure with a 26% share followed by developer at 13%, coater at 10% and repair at 8%. Market shares were provided for the following segments:
      • CF exposure
      • CF coaters
      • CF developers
      • Other market share data and design wins are available in the pivot tables
    • Module equipment: From 2018-2023, module equipment spending is expected to reach $15.9B on significantly higher module equipment spending for flexible OLEDs. Laser shape cutting and laser cell cutting for OLEDs should exceed $1B. Market share data and design wins are available in the pivot tables.
    • This issue also includes a newly added 13-mask top gate, CMOS process flow and a 17-mask top gate, CMOS, Y-OCTA process flow. We also provided a flexible OLED module process flow.
  • There were also a number of findings related to capacity.
    • From 2018-2023, total display capacity is expected to grow at a 5.9% CAGR with LCDs growing at 4.4% and OLEDs rising at 24.2%. We have raised our capacity forecast vs. our previous issue by 3% mostly on HKC’s expansions.
    • Flexible OLED capacity is expected to overtake LTPS LCD capacity by 2022 and reaching a 47% share of all mobile capacity in 2023 on 24% 2018-2023 CAGR. Rigid OLEDs are expected to grow at just a 3% CAGR with LTPS/oxide rising at just a 2% CAGR.
    • China’s share of display capacity is expected to rise from 40% in 2018 to 55% in 2023 on a 12% CAGR. From 2020, China will have more than a 2X higher share than Korea or Taiwan. No other region is expected to gain share over this period. Despite Trump’s tariffs and Foxconn’s intentions, little display manufacturing is expected to move outside of China over this period due to the subsidies and educated and experienced workforce in China. However, in our next issue, we will likely show 7.5K of a-Si LCD capacity moving to the US in 2020/2021 with the potential for it to scale to 30K and possibly be converted to oxide.
    • China, Japan and Korea are each expected to enjoy impressive growth in OLEDs, growing at 68%, 40% and 13% CAGRs respectively. Korea will remain the leading region for OLEDs, but its share is expected to shrink from 89% in 2018 to 57% in 2023. China’s share is expected to surge from 10% in 2018 to 44% in 2023, higher than in last quarter’s report as BOE has pulled in the timing for both B12 and B15.
    • In just flexible mobile OLEDs, SDC’s lead is much smaller due to the removal of its rigid OLED capacity and the lack of additional investments after 2018. As a result, BOE nearly catches SDC at 27% to 31% due to its continued investments. By excluding rigid OLEDs, LGD maintains the #3 position with Visionox holding #4.
    • Next week, I will provide a chart on yielded flexible OLED capacity by supplier which will show SDC’s lead wider than below. However, with subsidized fabs, the cost difference will not be that different.
    • G7+ capacity for LCDs and OLEDs is expected to rise at a 7% CAGR from 2018 – 2023 with 12% growth in 2018 and 2019, 9% growth in 2020 and 2021. However, just 3% and 1% growth are expected in in 2022 and 2023 on conversions from a-Si to oxide as well as indecisions abut which TV technology to pursue. There is also the possibility that microLED capacity growth in 2022-2023 will become a significant contributor to capacity growth. Nonetheless, there is the potential for tight supply in 2022-2023 unless more capacity is committed to in the near future.



For more information on the Quarterly Display Capex and Equipment Service and its highly sortable pivot tables which reveals design wins for nearly all tools at all fabs and spending by fab for 64 different segments, please contact Gerry@displaysupplychain.com.

Display Capacity by Country

Source: DSCC’s Quarterly Display Capex and Equipment Service

Flexible OLED Capacity by Supplier

Source: DSCC’s Quarterly Display Capex and Equipment Service

G7+ Supply and Demand Growth

Source: DSCC’s Quarterly Display Capex and Equipment Service

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Written by

Ross Young

Ross.Young@DisplaySupplyChain.com