OLED Utilization Ramps Up in 2H

Published October 5, 2020

The combination of normal seasonality and pandemic-induced weakness in the smartphone market had utilization (UT) rates at OLED fabs at low levels in the first half of 2020. UTs rebounded in Q3 and are expected to continue high in Q4, according to the latest update to DSCC’s Quarterly OLED and Mobile LCD Fab Utilization Report released this week. The report details monthly capacity and utilization for OLED lines and LTPS LCD lines, with capability to sort by parameters such as country, substrate type, supplier, form factor and TFT generation.

The first chart from the report included here shows the total monthly industry TFT capacity for flexible and rigid OLED and for LTPS LCD. While total OLED capacity surpassed LTPS LCD in 2018, the component parts rigid and flexible remain lower than LTPS LCD, but flexible OLED capacity is closing the gap in 2020. The shutdown of Japan Display’s Hakusan plant in mid-2019 removed roughly 7% of the industry’s LTPS LCD capacity, and expansions by BOE in Mianyang and Chengdu will continue to increase flexible OLED capacity, while expansions at Everdisplay and JOLED are increasing rigid OLED capacity in 2H 2020.

OLED and Mobile LCD TFT Capacity, 2018-2020

The next chart shows TFT input across the same splits. Input of flexible OLED has increased sharply in Q3, to set up supply for new product launches by Samsung, Apple and others in the second half of 2020 in what is now the established seasonal pattern. Note that flexible OLED input has been substantially higher Y/Y in every month of 2020, with percentage increases ranging from 32% to 82%. Rigid OLED is another story, however, as the smartphone slowdown and some share loss to LTPS LCD led to lower input area in the first half of 2020, and while we have seen input area increase in Q3, it is still lower Y/Y.

OLED and Mobile LCD TFT Input, 2018-2020

Source: DSCC Quarterly OLED and Mobile LCD Fab Utilization Report

The final chart here shows the resulting utilization numbers, this time with a view by quarters. We expect utilization to increase in the 2nd half for both flexible and rigid OLED, but whereas we expect flexible OLED UT% to be higher in 2H 2020 compared to 2019, that does not hold true for rigid OLED.

OLED and Mobile LCD Utilization, 2018-2020

Source: DSCC Quarterly OLED and Mobile LCD Fab Utilization Report

With respect to individual fabs, Samsung’s A3 fab is by far the largest flexible OLED fab in terms of capacity, and higher utilization at A3 (93% in Q3) increased the total industry UT%. LG Display’s E6 fab also ramped sharply in Q3 with utilization of 96%, giving LGD enough confidence to announce that it will add capacity at E6-3, but this capacity won’t come online until 2022. BOE continues to struggle with low utilization: even though it was boosted in Q3 by demand from Huawei pulled-in ahead of US sanctions, BOE’s B7 line in Chengdu had only 39% UT, and with reduced sales to Huawei in Q4 the UT% will drop to 22%.

DSCC’s Quarterly OLED and Mobile LCD Fab Utilization Report tracks TFT capacity and utilization across 41 OLED and LTPS LCD fabs across this industry, allowing segmentation by supplier, TFT generation, country, backplane technology, frontplane technology and substrate type. 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

bob.obrien@displaysupplychain.com