Growth in demand for flat panel displays in 2018 will be mainly driven by migration to large displays, declining panel prices, and high expectations for a recovery in the global economy.
The continuous development of television sets has been as relentlessly consistent as any sector in tech during the last half-century. The good thing is that there is no sign that the pursuit of visual perfection is slowing down. With the 3D fad over and app-loaded smart TVs now standard, the focus of TV-makers is back on creating the best possible two-dimensional image for viewers to enjoy.
Global demand for flat panel displays by area is forecast to grow 7.2 percent to 210 million square meters in 2018 compared to 2017. That will be the biggest annual growth since 2014. Growth in demand for flat panel displays in 2018 will be mainly driven by migration to large displays, declining panel prices, and high expectations for a recovery in the global economy. The rise in demand area is largely attributed to a fall in retail prices of applications along with a drop in panel prices, which is expected to spur consumers’ appetite for various display devices. The cheaper panel prices are also expected to bolster demand for larger display products. As Gen 10.5 fabs are due to start operation in the first half of 2018, supply of super large TV panels, including 65- and 75-inch products, is projected to grow. The global flat panels market will also get a boost from higher demand for new and larger TVs ahead of the 2018 FIFA World Cup in Russia in June. Panel sales in even years when major world sports events were held had grown at a faster rate than in odd years.
The flat panel TV market is also expected to see a significant rise in replacement demand, following the transition into digital broadcasting from analog signal that started in late 2000s. A consumer’s TV replacement cycle is usually about 10 years. A hike in replacement demand for the next few years is expected. In addition, the ongoing recovery in the global economy bodes well for the panel demand. GDP is forecast to grow 3.2 percent in 2018, following 3.1 percent in 2017 and 2.5 percent in 2016. In particular, the economic recovery in North America and emerging markets, such as India, Brazil and Russia, is expected to be stronger than the previous year. A rise in non-ferrous metal prices, often a precursor to an economic recovery, is another positive sign.
Key manufacturers are attempting to broaden what a TV can do, which is leading to the emergence of new highly advanced technologies, such as 8K, Micro LED, Mini LED, and AMOLED, among others.
2018 to Mark Starting Point for 8K Displays
Currently, TVs larger than the average
40-inch screen are produced with UHD or 4K. During the CES 2018 held in January, the next version of UHD TVs with 8K resolution was introduced. 8K represents the next generation of the TV industry, and with the massive increase in Gen 10.5 capacity planned in the next few years, the adoption of 8K technology will be a key factor in the success of the flat panels industry. The first uses of 8K displays will get underway in 2018, though the bulk of TV panel manufacturing will be focused on 4K/ultra HD this year. The research firm predicts that just 1 percent of displays in the 60-inch and larger category will support 7680×4320 pixel resolution in 2018, and climb to 9 percent in 2020, and reach 19 percent by 2024. As a point of comparison, 4K/UHD panels accounted for more than 98 percent of displays that are 60-inch and larger in 2017, but will dip to 81 percent by 2024. Sales of 8K flat panel TVs are expected to increase from 0.1 million in 2018 to 5.8 million in 2022, with China leading the way representing more than 60 percent of the total market during this period.
The global 8K display resolution market is witnessing immense growth, primarily due to the increasing need for high-resolution display devices and increased demand for enhanced content creation. The market will witness the introduction of consumer-grade 8K TVs by the end of 2018. Key vendors have introduced the 8K TV series; however, these are not consumer versions. Vendors will launch consumer-grade 8K TVs, in addition to 8K compatible content and devices. 8K TVs are expected to include advanced features like HDR, wide color gamut and advanced upscaling. Native 8K content will be limited so upscaling will be a differentiating feature. While the benefit of simply increasing pixel count from 4K to 8K is weak except for the largest TV sizes, there will be significant panel and TV supplier push that will foster adoption in a way that is similar to the 4K adoption pattern, but at a slower pace. The 8K TVs are expected to be released at niche price points, and only for custom orders. Total manufacturing costs for 8K 65-inch LCD panels are estimated at USD 1000 per panel currently and are expected to be reduced to USD 595 by 2021. Costs for OLED panels are estimated at USD 1830 in the present scenario.
Demand for Energy Efficiency Paves the Way for AMOLED
With the demand growing for AMOLED TV panels, shipments of overall AMOLED panels by area is forecast to more than quadruple to 22.4 million square meters by 2024 from 5 million square meters in 2017. Shipments of AMOLED TV panels had doubled to 1.6 million square meters in 2017 from about 800,000 square meters in 2016, resulting in total AMOLED panel shipments to grow more than 30 percent to 5 million square meters in 2017 from 3.8 million square meters in 2016. Share of TV panels in the total AMOLED panel shipments increased to 32 percent from 21 percent in 2016. Demand growth in AMOLED TV panels has accelerated since 2016 due to the increasing demand for wide color gamut TV. Most TV brands have been promoting AMOLED TV as their super premium product, which has differentiated optical performance from LCD TV. While 10 global TV brands shipped OLED TVs in 2017, 15 are planning to launch them in 2018. TV brands are trying to expand share of OLED TVs in their portfolio to rebound their total TV revenues.
In terms of unit shipments, the TV market has seen declines for 3 consecutive years since 2015. Now, major TV brands are prioritizing their focus on revenues rather than just the growth in unit shipments, with the added value that AMOLED TV offering higher-resolution and wide color-gamut display. Shipments of AMOLED TV panels will reach 12.5 million units by 2024. Many panel makers are trying to develop various technology to manufacture OLED TV panels – not only with white OLED but also with ink-jet process or quantum-dot materials. Factors driving the global AMOLED display market are growing demand for energy-efficient lighting technology, cost efficient broadband multimedia, and increasing usage of electronic devices and gadgets. North America is accounted to be the fastest growing region. Asia-Pacific held the major share of the global AMOLED display market and further anticipated to register a significant CAGR over the years. China, Japan, and India are the leading countries in the region. This growth is mainly driven by trending growth of consumer electronics sector and growing population in the region.
Promising Market Prospects for Micro LED and Mini LED
As a popular product in the LED display industry, micro LED is regarded as a leader of next-generation display technology. Micro LED is a miniaturized LED with matrix. In simple terms, the LED backlight is thinner, miniaturized, and arrayed, with the LED unit smaller than 100 micrometers. Each pixel is individually addressed and driven to emit light (self-emitting), just like OLED. A large number of manufacturers have paid attention to micro LED, which has promising market prospects. Revenue of the micro LED market is estimated to reach USD 2.891 billion by 2025. Some Japanese and Korean manufacturers want to introduce micro LED technology for market segmentation, especially in the areas of extra-large TVs and commercial displays, among others. Despite the promising outlook, micro LED is still faced with a huge number of technical bottlenecks. Micro LED has a simpler structure with better performance, but the biggest problem is the mass transfer. The challenge is how to miniaturize the LEDs, which requires wafer-level technology.
Breakthroughs have not been made in terms of some key technologies and equipment. In this situation, some LED companies have also turned to develop mini LED, a relatively mature transitional technology. The mini LED, also known as sub-millimeter light emitting diode, is a transitional technology between traditional LED and micro LED, and is an improved version of traditional LED backlight. In terms of manufacturing process mini LED has higher yield rate. It is also suitable for notch design and highly curved backlight when coupling with flexible substrates. The feature of local dimming also helps mini LED products have better color rendering performance. For LCD panels, mini LED technology enables more categories of HDR, and these products can be as thin as OLED ones, saving power as well. In terms of mass production, it is easier for mini LED technology to achieve mass production. Most of the existing equipment can be used for mass production of mini LED. In addition, it is more economical due to its potential in LCD display backlight market.
In general, micro LED will make significant improvements for the image quality. Mini LED is an improved version of LED backlight, but it can still significantly increase the image quality of LCD displays. Moreover, it is easier to control the cost of mini LED, which is more likely to be the mainstream of market. Mini LED market is promising in the next 2 or 3 years, micro LED will become a superstar in the future.
The flat panel displays market is reshaping the whole electronics market in terms of technology. With the construction of several new generation 10.5 fabs underway, and the first mass production shipments in Q1 2018, prices for large flat panel displays are expected to drop as production capacity surpasses market demand. Korean and Taiwanese panel makers have already increased their shipments of 65-inch and 75-inch panels in advance, which totalled 11 million and 1.6 million units in 2017, respectively. Overall, as panel makers continue to increase production capacity in 2018, the panels market will experience an oversupply, thus leading to a continuous drop in panel prices. However, lower panel prices will lead to more product promotion from brands.
As UHD has rapidly replaced full HD in the super large-sized TV display market, panel makers are willing to supply differentiated products with higher resolution and improve profit margin with premium products. Year 2018 will become the first year of the 8K resolution TV display. While conventional LED components are used for backlight, micro LED and mini LED technologies have been gradually used for self-emitting in displays of consumer electronics. As the technological bottlenecks being solved and the costs decreasing, micro LED and mini LED may have a chance to be adopted by display products. Even if there are only a small number of products using the technology, it will still be a remarkable contribution to the revenue of the entire LED industry.