The global market for thin-film transistor liquid crystal displays (LCDs) will decline steadily over the next six years as LCDs are replaced by active matrix organic light emitting diode (AMOLED) displays, according to researcher IHS Market.
Worldwide LCD revenue will decline from $100.9 billion in 2017 to $95 billion in 2018. By 2025, the LCD market will fall to $85.8 billion, the researcher said. However, while LCDs’ share of the flat-panel market will drop, they will continue to be the dominant display technology.
LCDs’ share of the flat-panel market will decline from 81% in 2018 to 59% in 2025, while OLEDs’ share will rise from 18% to 40%, IHS Markit said. OLEDs are replacing LCDs, especially in mobile applications, because they consume less power, produce better picture quality, have higher contrast ratios and faster refresh rates, provide a wider viewing angle, have greater durability, and are lighter weight.
“AMOLEDs are suited to high-mobility electronic equipment, such as smartphones, wearables, and head-mounted displays (HMD),” said Claire Wen, principal research analyst with Gartner Inc. “Smartphones will be the first priority as AMOLED adoption in smartphones will reach 45% by 2020, limited by supply constraint.” Adoption may also be limited, said Wen, because AMOLED panels require different display driver chips than TFT-LCDs, and semiconductor product managers must time the introduction of new chips to meet AMOLED migration.
Samsung has been the primary supplier of AMOLEDs, but LG Display, EverDisplay Optronics, and Visionox in China also make AMOLEDs, she said.
LCDs will continue to be used in televisions, but the bad news for LCD manufacturers is that unit production of LCD televisions will remain sluggish. Unit shipments of LCD-TVs will grow only about 2% per year from 223 million in 2017 to 235 million in 2024, said Wen. Shipments of smartphones, computer monitors, and mobile PCs are also expected to post slow growth through 2024.
LCD Tags to Drop
As a result, in the short term there will be excess capacity for flat-panel displays including LCDs, which will lead to price erosion. IHS Markit sais that overall flat-panel display demand is expected to grow more than 5% in 2018, but manufacturers are expected to increase capacity by 10%, resulting in a supply glut and lower LCD prices.
For instance, the average price of a 32-in. LCD panel will decline from $72 in 2017 to $59 in 2018. The average 40-in. panel price will drop from $138 in 2017 to $215 in 2018, according to Gartner.
Prices for other size panels will also decline. Average selling prices (ASPs) for 32-in. and 55-in. LCDs may decline the least because demand picked up recently, according to Ricky Park, director of displays for IHS Markit. However, there could be greater price declines for 40-, 50-, and 65-in. displays, said Park: “Panel makers that have been under significant pressure to clear out inventories because they’re carrying too high inventories on the 40-, 50-, and even 65-in., so they have to be more flexible with prices.”
Park added that, in theory, there could be three years of oversupply from 2018-2020. “In reality, this is not possible because panel makers will take action and the market will respond to the decline in prices,” he said, explaining that because of oversupply and falling prices in 2018, LCD manufacturers will postpone investment in new capacity.
However, prices will continue to fall through 2022. Park said the average price of a 32-in. panel will drop steadily from $59 in 2018 to $48 in 2022, while the ASP for 40-in. display will decline from $115 to $95 over the same period.
The current LCD oversupply began in 2017. Demand was weaker than expected, but LCD manufacturers did not cut back on production, resulting in higher inventory levels that carried over into 2018
