A Price Drop on LCD 2023

Despite the recent decline in the price of Liquid Crystal Displays (LCDs) and Organic Light Emitting Diodes (OLEDs), there is still a lot of uncertainty surrounding their future and the overall outlook of the industry. The following article provides a brief overview of LCD and OLED equipment investment forecasts for 2023, as well as a glimpse of the potential of a two-step market disruption in the near future.

LCD prices will continue to fall

Earlier this year, Samsung Display announced it would stop making LCD panels by the end of 2020. This decision is expected to accelerate the move to quantum dot displays. Samsung said it will continue to produce existing orders through the end of the year, but will not produce new LCD TVs.

Samsung has said that it does not expect the shutdown to affect its QLED TV line up. However, it is not clear what it will use in its LCD TVs in the future. The company’s preferred method of making OLED panels is significantly cheaper, and therefore will lead to lower RRPs.

In the meantime, Samsung’s competition, LG Display, has announced that it will stop producing LCD panels in South Korea by the end of 2020. It currently runs two LCD production lines in China, but has invested in CSOT, a Chinese company that manufactures OLED TV panels.

Currently, the global market for large-area LCD panels is in oversupply. Overcapacity has pushed up prices recently, but the trend is expected to flatten out in the fourth quarter. However, a solid demand base for panel products will sustain the trend.

According to the report, the global LCD Photoresists market is expected to grow at a CAGR of 2.2% between 2022 and 2026, with the market accounting for the largest revenue share in 2023. The market will continue to grow as major players continue to adopt strategies to increase their market share.

LCD TV panel prices have been rising since October, and prices are expected to continue to rise through the end of the year. This increase is due to a large drawdown in inventory in the display supply chain, and the lack of cash cost levels for the panel makers.

OLED prices will surpass 10 million units for the first time this year

Having been around for seven years, the OLED is still gaining traction. In fact, LG’s accumulated sales are up more than a hundred percent from the year before. Despite the bump, the OLED is still more expensive than its LCD counterpart. But, the competition is heating up. For instance, Samsung is already selling its own quantum dot layered LCD TVs, which are dubbed QLED. If it can get the price down, it will be the envy of the competition.

LG’s biggest short-term fear is that its rival, Samsung, will take the OLED crown. The two companies are currently engaged in a bidding war for supremacy in the display category. LG’s competitors include Samsung, AU Optronics, and LG Display. In the long run, LG’s OLED TV is likely to outlive its rivals. But, LG faces a possible humiliation if its rival makes it’s own QD-OLED based TVs.

As it stands, the OLED is the most interesting display technology to hit the consumer market in years. Its best marketed feature is the elusive perfect black. Having perfect blacks is great, but the technology is now catching up with its LCD counterparts in terms of overall image quality. OLED’s other major appeal is the wide viewing angles. Moreover, it’s fast response times make it the most suited display technology for the latest smartphones. Lastly, the OLED’s biggest competitor, the LCD, has been experiencing a major decline in pricing. This will only intensify as new competition arrives on the scene. With the exception of Samsung, it will likely be a while before we see the last of LCDs on the shelves. Regardless, the OLED is the display technology to watch for the rest of 2013. We’ll see how it holds up as the year goes on.

Samsung and TCL could offer a real two-step market disruption

During the DSCC’s 2022 Global Display Supply Chain Dynamics & Technology Conference held on October 19th, there was a lot of discussion about the display industry. One interesting discussion was how Samsung’s early investments in TCL helped to maintain their strong television production. This investment included the construction of a dedicated LCD panel production line.

This was not the only technological feat achieved by the two companies. TCL is also making a stab at OLED TVs, using a method that is significantly cheaper than the traditional “white OLED” production process.

Samsung is also reportedly prototyping a new technology called QD-OLED. This technology combines quantum dot technology with the deep blacks of an OLED panel. It also offers more pure white light than LEDs. The technology has not yet reached commercial production, but is expected to be introduced within the next few years.

TCL has also invested in a production line to produce OLED TVs. The production line is expected to be operational by 2023, allowing them to offer a cheaper option for consumers. While TCL claims that they are not walking away from Roku, their executives expect the operating system landscape to follow the trends seen in the smartphone industry. They will offer consumers a choice of either Roku OS or Google TV, while their existing TVs will remain on sale.

Both companies have supply chain footprints that allow them to take a leading role in the future of televisions. TCL has been quietly building a supply chain in the Shenzhen Guangming New Area while Samsung has invested in the 11th generation LCD panel line. These investments are a sign that the companies are serious about competing in the television industry.

LCD production capacity in 3Q22 will be reduced by 12%

Several TV manufacturers have recently announced that they plan to reduce LCD TV panel production capacity by up to 12% in the third quarter of this year. As a result, prices have plummeted to all-time lows. This has led to lower profits for panel makers. However, prices are expected to pick up soon. The market will begin to normalize by the second half of 2023. However, the global display makers’ capacity utilization has reached a record low of 73%, which is expected to decline in the third quarter.

The decision by Samsung to cut back on its LCD panel production in mid-June has affected the display industry in many ways. For one thing, it has halted panel procurements. While it’s expected that TV makers will reduce their purchasing of panels, Samsung’s move will have a ripple effect across the industry. It also highlights how difficult it is to produce next-generation displays.

Several big Chinese LCD manufacturers have already started cutting production this month. For instance, BOE Technology Group and TCL China Star Optoelectronics Technology have both announced that they will cut production by up to 16 percent in the third quarter. They are planning to continue reducing production until September. However, their losses are much larger than those of smaller panel makers. These losses will be compounded in the third quarter as TV makers continue to reduce their panel purchases.

The market is also suffering from excess inventory. Sakai Display Products Corporation’s Gen 10.5 fab is under pressure from the fact that it’s carrying a surplus panel inventory. It’s also facing cash cost deficits. The combination of these factors has prompted the fab’s owners to suspend input of glass substrates from mid-July onward.

LCD and OLED equipment investment forecast has fallen to $5.4bn for 2023

Originally, the LCD and OLED equipment investment forecast was US$9.8bn for 2018. But now it has fallen to US$5.4bn for 2023. According to JDI, this is a small improvement over the previous year’s figure.

In particular, the company has rolled out a new backplane technology for its Gen 6 fab in Mobara, Japan. They also have a new TV set business in the works, and have begun immediate commercialization of their latest tech. JDI’s most impressive feats, however, are not in the display business.

The company’s GM has improved from 5.9% in the previous year to 6.9%, and it has achieved a ROE of more than 30%. For now, though, the company’s sales have been weaker than they were a year ago, mainly due to falling memory pricing. But they’ve still racked up the most impressive numbers on the list, and the company has the capital to invest in the next phase of its growth.

They’ve also made some impressive advances in the data center segment on the fixed and modular sides. The company’s latest display-related innovations include a new display manufacturing process, and a new backplane technology for its fab in Mobara, Japan. It’s also making inroads with Cisco and Google.

Posted on Categories TV's