The often-cyclical market for display capital expenditures is in the midst of a downturn. According to Display Supply Chain Consultants (DSCC), display capital expenditures for 2019 have been slashed 12 percent to USD 13.7 billion, due to a 15 percent reduction in LCD spending from cancellations at Infintech and Sharp SIO and downsizing at HKC H2. The LCD market is currently afflicted by excessive supply growth, poor fab utilization, and the lack of profitability in LCD TV panels.
LCDs still accounted for 70 percent of total display CapEx, even with the promising mobile OLED sector also seeing issues with fab utilization. China accounted for 92 percent of spending and Gen 10.5 fabs accounted for a 50 percent share of all spending. Bookings are expected to be up 2 percent for the year from USD 17.4 to USD 17.7 billion.
For 2020, DSCC reduced its forecasts versus the previous quarter by 21 percent to USD 16 billion, due to downsizing and cancellations at HKC H4 and Sharp SIO and delays at BOE B17 and CSOT T7. LCD spending was reduced by 45 percent while OLED spending was increased by 3 percent. OLEDs are expected to account for 65 percent of spending at USD 10.4 billion, with LCDs at 35 percent and USD 5.6 billion. Mobile spending will soar 335 percent to USD 6.9 billion, accounting for a 43 percent market share, as TV spending tumbles 25 percent to USD 9.1 billion and a 57 percent share.
HKC and Visionox are expected to pace CapEx spending with a 17 percent share each, followed by China Star at 15 percent and BOE and Samsung at 14 percent each. China’s share of total display CapEx is expected to fall from 92 percent to 84 percent, while Korea’s rises from 5 percent to 16 percent.
The spending slowdown will also continue for 2021, with DSCC projecting a 7 percent spending reduction from its prior forecast of USD 9.8 billion, which is already down 39 percent year-to-year, as manufacturers continue to delay CapEx spending. Mobile will account for a majority of spending with a 56 percent share, its highest since 2018. BOE is expected to lead in spending with a 40 percent share, followed by China Star at 30 percent.
In 2022, CapEx delays from prior years will lead to a 6 percent increase versus last quarter’s report and a 1 percent YoY increase to USD 9.9 billion, with OLEDs accounting for a 94 percent share. Mobile displays are expected to account for 63 percent of display CapEx.