OLED Panel Shipment Revenues up 80% in Q3 2018 to $8.0 Billion on Smartphone Recovery and TV growth

Published November 12, 2018

The third quarter of 2018 saw a strong recovery of OLED panel shipments, with total revenue up 80% Q/Q and 45% Y/Y to $8.0 billion, according to the latest update of DSCC’s Quarterly OLED Shipment and Fab Utilization Report. The revenue increase was paced by an even more impressive 92% increase Q/Q in OLED smartphone panel revenue, which grew 43% Y/Y to $6.9 billion, as shown in the chart below.

Quarterly OLED Panel Shipment Revenues, 2016-2018

Revenues are expected to increase another 3% Q/Q in Q4 to $8.2 billion, but this represents a 7% Y/Y decline, mostly due to a 14% Y/Y decline in OLED smartphone panel shipment revenues. The Q4 revenue decline from 2017 reflects slower iPhone panel sales in Q4, as the product launch pulled more of these shipments into Q3.

OLED TV panels have seen less volatility in revenue during 2018, but have shown persistent growth. In Q3, TV panels grew 80% Y/Y and 7% Q/Q to $585 million, representing 7% of overall OLED revenues. The 42% Y/Y growth in All Other applications was driven mainly by a surge in OLED Smartwatch revenues in Q3, growing 98% Q/Q to $317 million.

The Quarterly OLED Shipment and Fab Utilization Report covers units, revenues and ASPs for eleven different applications of OLED panels, plus supply chain relationships for phones and TVs and fab utilization figures for OLED and LTPS LCD fabs. The most recent update covers the actual shipments up to Q3’18, with a forecast for Q4’18 based on the most recent market developments.

OLED Panel Unit shipments increased 35% Q/Q and 34% Y/Y to 141 million units, with smartphones representing almost 90% of units. In Q4, units are expected to increase another 6% Q/Q and 15% Y/Y to 149 million, with smartwatch panels showing exceptionally large growth of 71% Y/Y.

Samsung continued to hold 90% unit share of OLED panels across all applications in Q3, though this was down slightly from 91% in the prior quarter and 92% a year ago, as other panel makers slowly increase their shipments. LGD took the #2 spot in unit shipments with 5% share, up about 1/2 % from a year ago, while Chinese panel maker Everdisplay (EDO) took the #3 position with 3% share.

Quarterly OLED Panel Unit Shipments by Supplier, 2016-2018

Samsung took the leading position in most applications, and failed to take the #1 position only in the large screen applications, monitor and TV, where they don’t sell. JOLED was the sole supplier of OLED monitor panels, and LGD was the only supplier of OLED TV panels.

An important part of the revenue growth in Q3 was the increase in Average Selling Price (ASP) of flexible OLED smartphone panels. Flexible panel prices increased by 13% in Q3 from the prior quarter, from $88 to $99.6, though they were down 2% from Q3 of 2017. Rigid OLED smartphone panel ASPs edged down slightly by 1% Q/Q to $23.80, but were down 9% Y/Y.

Quarterly Average Selling Prices of Smartphone Panels, 2016-2018

The increase in flexible OLED panel ASPs was primarily driven by larger shipments of flexible panels to Apple, as Apple ASPs are substantially higher than panels for other smartphone brands. Flexible OLED panel shipments to Apple increased from 6.5 million in Q2 to 30 million in Q3, rising from 31% of the category to 58% and pulling the average price up.

In OLED TV, panel ASPs increased by 5% Q/Q and by 6% Y/Y to $768.20, driven by both an increased screen size mix with more 65” and 77” panels shipped, but also by price increases on 55” panels. Shipments of 65” OLED TV panels to Sony increased by 39% from the prior quarter, and shipments to other brands in Japan and Europe increased as well.

OLED fab utilization recovered strongly in Q3, as UT% on Samsung’s A2 Rigid OLED line increased from 73% to 90% and utilization on Samsung’s A3 Flexible OLED line increased from 37% to 61%, as shown in the chart below. After peaking at 90% in Q3, though, Samsung’s Rigid OLED fab utilization will be declining to 72% in Q4, which may be a major contributing factor to Universal Display Corporation’s reduced revenue guidance for Q4. SDC’s input for rigid OLED in Q3’18 exceeded its shipments, and it is adjusting in Q4.

Quarterly OLED and LTPD Fab Utilization 2017-2018

UT% at China flexible OLED fabs will increase from 51% in Q3 to 60% in Q4, while the UT at China rigid OLED fabs will fall from 67% to 59%. In contrast with the low and volatile utilization on smartphone fabs, UT% at LGD’s TV fabs continues at very high levels, falling slightly from 96% in Q3 to an expected 94% in Q4.

DSCC’s Quarterly OLED Shipment and Fab Utilization Report includes pivot tables for capacity by substrates and area, for UT%, for Revenues, unit shipments, ASPs, area shipments, and many more. The report allows sorting by panel maker, country, Gen size, substrate type, frontplane, brand, application and many more factors. For more information on DSCC’s Quarterly OLED Shipment and Fab Utilization Report or to subscribe, please contact info@displaysupplychain.com.

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Written by

Bob O'Brien