Growth In The AMOLED Market Threatened By Overcapacity


IHS Markit analysts conclude in a new study that thin-film transistor (TFT) display panel manufacturers have overbuilt AMOLED capacity which will likely saturate the 2018 market.

Flexible active-matrix organic light-emitting diode (AMOLED) panel
fabs are building at a quicker pace than global demand, says IHS Markit, which
has led the analysts to forecast that supply will outpace demand by 44 percent
in 2018.

Display market capacity is measured in square metres and the
manufacturing output for flexible AMOLED panels is expected to reach 4.4 million
in 2018, doubling its 2017 output. At the same time, demand for flexible AMOLED
panels is increasing much more slowly than had been expected by suppliers. Demand
is projected to increase a substantial 69.9 percent to 2.4 million square
meters in 2018, far outpacing demand, according to IHS Markit’s AMOLED &
Flexible Display Intelligence Service.

“Manufacturers had expected that flexible AMOLED panels would
penetrate into the smartphone market fast," said Jerry Kang, principal analyst
of display research at IHS Markit. “But, this year, most smartphone brands have
focused on LCD or rigid AMOLED wide-screens with an 18:9 or higher aspect ratio
rather than curved screens using flexible AMOLED panels because the price of
flexible AMOLED modules is still much higher."

According to the IHS Markit OLED Display Cost Model, producing an
AMOLED screen costs 1.5 times more than producing same-sized OLED panels on the
same Gen 6 production line. “The wide-screen smartphone is expected to maintain its
competiveness against one with a curved edge screen for a while," Kang added.

Due to the high cost of flexible panels, smartphone manufacturers
use them for their highest-end product segment, making it more difficult for
second-tier flexible AMOLED panel suppliers to meet the product qualification.
“This may result in seriously low fab utilization at the second-tier panel
suppliers," Kang concluded.

Flexible AMOLED panels share technology with all thin-film
transistor (TFT) panels; the term TFT refers to the panels’ underlying circuit design
that places a control transistor with each pixel using thin-film semiconductor
manufacturing techniques; LCD, LED and AMOLED share a common heritage. As the
price disparity suggests, flexible AMOLED panels are more advanced that basic
TFT designs; manufacturers typically make more than one type in their factories
and are continually striving to enhance the performance of basic TFT screens along
with AMOLED panels. TFT designs utilize inorganic compounds in key components
while AMOLEDs use organic materials, predominantly carbon, which shortens their
life expectancy relative to other panels. On the plus side, the lifetimes of
either panel type exceeds those of other major smartphone components and AMOLED
screens are also much thinner, use less energy and can reproduce more vivid,
dramatic colors than basic TFT designs.

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