Market updates - Page 42

DSCC recently said that SDC's OLED fab utilization is starting to improve as production starts for next-gen iPhones and Galaxy phones, and UBI Research also says that the market recovery is starting. CLSA, however, says that it is too soon to talk about OLED recovery.

CLSA agrees that SDC's fab utilization will rise from about 35% to 80% in the second half of 2018, but CLSA also believes that Samsung is not even considering the A4 fab (30,000 monthly substrates) which will remain idle, which means that actual utilization will be lower than stated.

UBI Research says that Samsung Display's OLED shipments dropped 26% in Q1 2018 (compared to Q4 2017) to reach 88 million units (that's 4.7% lower than Q1 2017), generating $5.37 billion in revenues (down 32.4% from last quarter and 30.4% from last year). Revenues and shipments are expected to recover, though, in Q2 2018.

UBI says that Samsung Display will hold a market share of 93.4% of the total OLED market in 2018.

Display Supply Chain Consultants (DSCC) says that in Q1 2018 OLED revenues dropped 33% compared to Q4 2017 (but grew 39% compared to Q1 2017) and amounted to $5.9 billion. DSCC says that OLED revenues will decline further in Q2 2018 but will recover in the second half of 2018. Full-year revenues are expected to reach $26.95 billion, while the market will reach $57.2 billion by 2022.

Samsung Electronics was the top OLED customer in the first quarter, and together with Apple (#2) the two companies consumer 79% of all OLED panels by revenue.

DSCC updated its forecast for display equipment spending, saying that in 2018 OLED spending is expected to fall 28% compared to 2017 to $10.8 billion (while LCD spending will grow 22% to $11.4 billion). China-based display makers will account for 90% of all display related equipment spending in 2018.

2019 will see another down year for OLED spending that will drop 31% to $7.4 billion (LCD spending is also expected to fall by 32%). Chinese display makers will again lead in spending (77% of the market).

DSCC says that Samsung Display's OLED utilization has started to improve as it is starting to produce new OLED displays for new smartphones by Samsung, Apple and other makers.

SDC's utilization rates started to improve in May 2018, with the rigid A2 OLED fab expected to exceed 80% in June. At 100% yields, the A2 can produce 175,000 monthly substrates. DSCC says that 5.5-inch to 6-inch rigid OLEDs cost will fall to $23 in Q3 2018, with the price premium over LTPS LCDs will be around $5. DSCC says that at such a small gap they expect demand for rigid OLEDs will remain strong.

During its 2018 Investors Forum in Singapore, Samsung Electronics said that it expects the automotive display market to grow at a 9% CAGR from 2018 to 2022 - but automotive OLEDs will grow at a much faster rate - from 100,000 units in 2018 to 3 million in 2022.

At SID Displayweek Samsung indeed demonstrated many automotive OLED displays - including curved, rolllabe, unbreakable, transparent and lightfield AMOLED displays.

CLSA says that OLED penetration in the smartphone market was unchanged at 29% in Q1 2018 (up from 25% from Q1 2017, though). Unit shipments increased 12% from Q1 2017 to reach 96 million, but were down 15% from Q4 2017.

OLED adoption in Samsung Electronics' smartphones increased to 72% in Q1 2018, mostly due to the successful launch of the GS9. Apple saw a decrease from 35% in Q4 2017 to 32% in Q1 2018 as iPhone X shipment decreased.

IHS estimates that a notch-design increases the production cost of a smartphone display (whether LCD or OLED) by more than 20%. A notch-type 5.9" OLED (like in the iPhone X) costs $29, 25% higher than the cost of a regular 5.8" OLED.

IHS explains that cutting the notch results in yield loss, which is the main driver of the higher costs (the panel itself, of course, is also larger before cutting the notch in the comparison IHS makes). In theory, cutting a plastic OLED is easier than the glass-based LCDs, and IHS forecasts that manufacturing costs for notch OLEDs will fall far more rapidly than the costs of notch LCDs.

UBI Research says that foldable OLED display production will begin in 2019, and will quickly grow to over 28 million units shipped in 2022. The growth will be fast - but in total UBI sees the market remaining relatively small even at 2022, with most OLEDs on the marketing to remain flexible but not foldable.

UBI says that if OLED makers will be able to launch and commercialize foldable OLEDs, it could seriously disrupt the tablet PC market. The company expects the first foldable phone to use dual 5.2" displays (7.2" display when open) on the inside, with an additional small "bar-type" display when closed.

IHS says that smartphone makers are expected to increase their adoption of under-the-display fingerprint sensors. In 2018, 9 million such smartphones will be sold, but the market will grow extremely quickly and will reach over 100 million unit in 2019. By 2022, over 300 million such phones will ship.

Under-the-display sensors are currently only applicable to OLED displays. Chinese phones makers (such as Vivo and Huawei) already started shipping the first phones to adopt this technology. IHS estimates that looking forward, the market will be led by Samsung and Chinese smartphone makers such as Vivo, Huawei and Xiaomi.