The global display market size is projected at USD 148.4 billion in 2021 and will reach USD 177.1 billion by 2026. It is expected to grow at a CAGR of 3.6 percent.
Latest technologies, such as AMOLED displays, are expected to offer superior image quality and form factor advantages in high-end devices. Despite the excessive capacity availability, the challenge to faster adoption would be limited. TVs are expected to have the highest growth rate on account of the increase in sales of UHD and OLED in developing economies like India, Brazil, and China.
APAC is a leader in both production and consumption of display panels. The region has witnessed significant advancements in the display device market, along with rapid changes in terms of the adoption of new technologies.
Display fab utilization continuing strong in 1H21
With LCD panel prices at multi-year highs and spot shortages in some display applications, display industry fab utilization is continuing at high levels in the first half of 2021, according to the latest release of DSCC’s Quarterly All Display Fab Utilization Report. In 4Q20, total TFT input for all display makers was up 3 percent QoQ and 15 percent YoY at 79.4m square meters, and in the current 1Q21, total TFT input is expected to be flat QoQ but up 12 percent YoY at 79.6m square meters.
After a COVID-19 induced slowdown in the first half of 2020, fab utilization has been particularly strong in Taiwan and China. Although utilizations in Taiwan have decreased slightly in 1Q, they are expected to remain above 90 percenr for the fifth straight quarter in 2Q21. Worldwide utilization in 2Q21 is expected to hit 88 percent, its highest level since 4Q18.
TFT monthly fab utilization by region, 2018-2021
China has taken over the industry in just the last 2 years and this process is continuing in 2021. In 1Q18, China represented 39 percent of total industry TFT input on an area basis, but by 3Q19, China was larger than all other regions combined. By the second quarter of this year, China will be 61 percent of all industry TFT input.
Quarterly TFT input by region, 2018-2021
Battle between OLED and miniLED
With the pandemic-fed surge in TV demand, TV makers have been solidly profitable despite rising LCD TV panel prices. Those higher LCD prices may boost the prospects for OLED TV, but miniLED models will compete with OLED at premium price points, and this may eventually lead to a price war between these competing technologies.
MiniLED and OLED TVs in a tough cost battle for the premium space. MiniLED and OLED will compete in the marketplace, and the cost profile of the two technologies shows they are both much more expensive than conventional LCD. This suggests that miniLED TV products will compete at retail price points similar to WOLED TV.
The WOLED product in 2021 costs less than the MiniLED, but DSCC expects the cost of miniLED to decrease faster than WOLED, so the cost premium declines from 7 percent in 2021 to cost parity in 2025.
55-inch UHD WOLED total costs in 2021 in China will be ~14 percent lower than Korea production, with a similar advantage for 65-inch. LGD is continuing to improve production at its Gen 8.5 white OLED (WOLED) fab in Guangzhou, China. Total panel costs from China production in 2020 were higher than the costs for comparable panels made in Korea, by this year the advantages for China production allow lower total costs. China has lower costs for depreciation, personnel, indirect, and SG&A, leading to lower total costs even though yields in Korea will remain higher than China.
Explosion accident exacerbates recent tight supply of glass substrates
The high demand for various panel applications, together with the issues encountered by Corning and NEG in the respective supply of glass substrates, has resulted in the relatively strained global supply of the product. Both Corning and NEG had initially anticipated to resume normal supply starting from the end of 1Q21, though the furnace explosion of AGC has created new variables to the overall supply of glass substrates. The affected furnace was planned to supply substrates for the new production line of G10.5 in China; thus AGC is bound to implement scheduling and allocation of production capacity after the furnace explosion, so as to respond to the supply void created by the incident, and the major affected time point will occur during 2Q21.
A single production line for a single supplier will be affected if the scope of impact is strictly within the supply of G10.5 glass substrates, with implicated dimension as 65-inch and 75-inch. Should a scheduling of production capacity be required, the affected range will be enlarged to G8.5, and will include Taiwanese and partial Chinese panel suppliers, where the affected dimension will also expand to below 55-inch.
Outlook: Panel prices to be maintained at a high level
Prices of TV panels have been climbing over the past several months and are still on the upswing. The excessively high cost of panel procurement is starting to become an issue for branded TV manufacturers. TrendForce previously forecasted that prices of TV panels would keep rising to the end of 1Q21 and then drop slightly in the second half of 2Q21 due to demand fluctuations. However, projections have been modified on account of the furnace explosion at AGC Fine Techno Korea on January 29, 2021. Panel prices may continue to stay at a high point through 2Q21 and maintain this trend until late 3Q21 before further adjustments could take place.