Takeaways from DSCC’s Latest Display Supply Report
Last week we delivered our latest Powerpoint report dedicated to the findings from our Quarterly Display Capex and Equipment Service. Deliverables included
- LCD and OLED fab schedules from 2016 - 2022
- # of process steps by tool type for 11 different a-Si, LTPS and oxide TFT processes as well as frontplane processes
- Tool prices at 10 different glass sizes for 23 different backplane segments.
- Equipment spending and bookings for LCDs, OLEDs, 40 different equipment segments, etc. in units and revenues by region, manufacturer, fab generation, etc.
- Display capacity segmented into OLEDs, LCDs, mobile, TVs, region, fab generation, panel manufacturer, etc.
Some of the key takeaways included:
- LCD capacity will remain significantly higher than OLED capacity throughout the forecast despite significantly faster growth for OLED, 36% CAGR vs. LCDs at 6%. OLED’s share of total display capacity is only expected to reach 12% by 2022. Total display capacity is expected to grow at an 8% CAGR.
- Conversely, in comparing LTPS/oxide LCD vs. mobile OLED capacity, we show mobile OLED capacity overtaking mobile LTPS/oxide LCD capacity in 2018 with LCDs growing at a 3% CAGR vs. OLEDs growing at a 35% CAGR as shown in Figure 1.. By 2022, OLEDs are expected to have a 72% share of advanced mobile display capacity. Capacity growth along with form factor, display performance, battery life, etc. contribute to why smartphone brands will increasingly adopt OLEDs going forward.
- China is expected to account 70% of display equipment spending from 2018 – 2022. In just LCDs, China is expected to account for a 79% share, 64% in OLEDs.
- While Samsung Display led in display equipment spending in 2016 and 2017, BOE is expected to lead in 2018 and 2020 with LG Display leading in 2019 and China Star leading in 2021. From 2018 – 2021, BOE is expected to lead with a 24% share followed by China Star at 15.5%, LG Display at 14.7% and Samsung Display at 13.9%.
- China’s display capacity is expected to grow at a 17% CAGR from 2017 – 2022 with no other region growing at more than a 3%. As a result, China’s share of display capacity is expected to rise from 35% in 2017 to 50% in 2022 as shown in Figure 2. Interestingly, Taiwan’s capacity is expected to be slightly higher than Korea’s this year due to Taiwan not closing or converting older fabs while Korean suppliers do. In addition, Taiwan suppliers have avoided more capital-intensive OLED production, but may convert older fabs to less capital-intensive micro-LEDs. In the case of LCD capacity, China’s dominance is slightly higher reaching a 52% share from 2021 with Taiwan ahead of Korea as shown in Figure 3. In the case of OLED capacity by country, Korea holds a huge advantage over China at 91% to 7% in 2018, but that is expected to narrow to 57% to 40% in 2022 due to China’s spending plans as shown in Figure 4.
- In terms of display capacity by fab generation, 8.5/8.6G is expected to lead throughout the forecast, peaking in 2018 as shown in Figure 5. It will rise at a 7% CAGR, but will lose share to 10.5G from 2019 which will rise to an 18% share. 6G for mobile displays will grow at a 10% CAGR and maintain a 15% share. 10/10.5G is expected to grow at a 46% CAGR. Looking at just LCDs, 10.5G will rise to a 19% share on 44% CAGR with the 6G LCD share smaller at just 11%. Looking at just OLEDs, 5.5G actually led in 2016 and 2017 in capacity, but 6G is expected to lead from 2018 reaching a 49% share in 2022 as most new fabs install capacity at this size. 6G is expected to remain the largest size LTPS backplanes that can be produced in our forecast. 8.5G is expected to overtake 5.5G in 2019 as LG adds 8.5G capacity in China. 10.5G OLED production is expected to start in 2021.
Figure 1: Mobile Capacity by Technology (OLED vs. LTPS/Oxide LCD)
Figure 2: Display Capacity by Country
Figure 3: LCD Capacity by Country
Figure 5: Display Capacity by Generation
- By manufacturer in terms of total display capacity, BOE is expected to become the #1 supplier on a capacity basis in 2019 and widen its advantage over LG and Samsung on significantly faster growth with BOE growing 16%, LG Display 3% and Samsung flat as shown in Figure 6. China Star is expected to rise to #4 in 2022, overtaking Innolux. Looking at just LCDs, BOE overtakes LG Display for the #1 position in 2018 and is expected to have an even larger advantage as LGD and SDC’s LCD capacity shrinks over the forecast period at a -2% and -3% CAGRs respectively. The top 10 are the same between LCDs and total displays. In total OLED capacity on a square meter basis, LG Display is expected to overtake Samsung in 2020 with BOE #3. In just mobile OLED capacity, Samsung will maintain a dominant position throughout the forecast, with its share not falling below 50% until 2021. LG Display is expected to be #2 until 2022 when BOE overtakes them.
- In terms of LCD suppliers’ transition to becoming OLED suppliers, we can see some interesting results in Figure 7. This figure only shows companies producing both OLEDs and LCDs. As indicated, Tianma is expected to have the highest share of their capacity producing OLEDs from 2020, which makes sense given their smartphone and small/medium display focus. LG Display is expected to be second from 2021 followed by Samsung. Samsung currently has the highest share of their capacity dedicated to OLEDs at 20%, but lack of large-screen OLED investments will cause them to fall in the rankings. .
Figure 6: Display Capacity by Manufacturer
Figure 7: OLED Share of Internal Capacity