Projections, predictions, estimates and forecasts are all part and parcel of managing and monitoring a global business. They’re frequently updated, come from numerous sources and can change quickly in response to transitioning circumstances.This is particularly true of the current state of the global display market, upon which a number of factors are having an effect. These include the increasing influence of Chinese panel manufacturers and changing customer requirements / demand.
In response to these influences, some of the biggest TV manufacturers in the world have put in place significant plans to prepare themselves for the future. LG Display is supporting the OLED TV market and plans to produce up to 10 million TV panels by 2022 while Samsung is starting to convert production lines in preparation for new its hybrid QD-OLED panels.
The latest industry report from the Display Supply Chain Consultants (DSCC) in their 'Quarterly OLED Shipment and Fab Utilisation Report' suggests that the overall OLED panel shipments (which includes screens for watches, smart phones, and the automotive industry) will reach just over 1 billion by 2023 resulting in revenues of nearly $39 billion. OLED TV panels will add a further $7.3 billion by that year too for a total of $46.3 billion, however, this OLED TV contribution is a downgrade from previous figures.
This adjustment is partly due to the additional time it is taking LG Display to get their newest 8.5 Gen facility in Guangzhou, China running to capacity, compounded by LGD’s decision to delay its plans for mass production of a new Gen 10.5 fab by one year.
Additionally, the report suggests a challenge from improved LCD technologies such as dual-cell LCD panels (recently demonstrated by Panasonic at IFA and also by Hisense) and miniLED backlighting being brought to market by TCL in their upcoming TV ranges, which could erode some of the advantages that OLED panels have had over the more traditional LCD panels.
Oversupply of LCD panels has resulted in a widening price gap between OLED and LCD TV panels. A 65-inch LCD panel is now lower than OLED 55-inch prices, and 65-inch OLED is competing with 75- and 82-inch LCDs while at the same time it’s recognised that consumers are becoming more interested in larger screens. On Sep 25th, market research company IHS Markit announced adjustments to its shipment forecasts and upped its figure of 4.9 million QLED TV sales in 2019 to 5.45 million - an increase of 11percent. At the same time, they lowered their estimate for OLED TV sales for this year by 8 percent from 3.25 million units to 3 million units.
The report predicts that LD Display will find it challenging to maintain premium prices for OLED TVs and while a price drop may seem attractive to the consumer, it actually undermines LGD’s business plans since it needs a profitable OLED TV business to continue to invest in production.
2019’s OLED TV prices have held but the attractive price drops for QLED TVs have boosted those sales and suppressed OLED’s below the predicted 2 million. On the back of this, LG Electronics have downsized their order of OLED panels from LG Display for 2020 from 3.5 million to 2.5 million.
All this juggling to try and maintain price, supply and demand may lead to OLED panel capacity being added at a more moderate pace to keep price erosion in check, the report predicts.
Global businesses are used to unpredictability and build-in contingency plans to mitigate, so it’s not necessarily bad news for OLED TVs, Indeed, the overarching trends going from 2020-2023 are expected to see OLED TVs grow from 8% of overall OLED revenues in 2018 to 16% in 2023, with units increasing to 12.6 million in that year. In addition, IT applications such as monitors, laptops and tablets will reach a combined $6.2 billion in revenues by 2023.
And big growth in TV shipments resulting from LG Display’s Guangzhou expansion will allow TV to become the largest application by OLED display area by 2021, pushing smartphones into second place.
Of course, that could all change…...
OLED is definitely a growth area of TV display technology going forward and of course lower prices will make OLED TV more attractive but how would TV fans feel if the result of more affordable prices caused reduced OLED investment as manufacturers attempted to cut the costs of their expensive production process? Let us know in the discussion thread.
Source: www.businesskorea.co.kr, www.displaysupplychain.com
Image Source: DSCC, Business Korea
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