Dazzling Display Issues: LCD Market Growth, Glass Size, Fab Cost, and OLEDs
By Craig Addison, SEMI
From LCD glass demand to Gen 10. From substrate size to the cost of freeways versus fabs. From touch-screen cell phones to LCD TVs in emerging markets and OLEDs in high-end niche applications….all these topics—and more—were discussed at Display Taiwan 2008.
Corning’s Eusden on LCD Demand, Panel Size, and Gen 10
Taiwan accounts for 39 percent of global LCD glass demand, behind Korea at 45 percent but ahead of Japan (14 percent) and China (2 percent), according to a keynote presentation by Alan Eusden, president of Corning Display Technologies Taiwan, at Display Taiwan 2008.
The conference, co-organized by SEMI, was held June 11–12, and Eusden provided an overview of market and technology trends, highlighting Taiwan’s strength in LCD monitors, where it accounts for 55 percent of total world production and notebook PCs, where Taiwan producers account for one-third of world supply.
Looking at the global LCD market, panel sizes at Gen 5 and below are only growing at 3 percent a year while Gen 6 and Gen 7 panels are enjoying 26 percent annual growth, according to Corning. The fastest growth segment, albeit from a small base, is Gen 8 and above, with 158 percent market growth.
Gen 8 panels are currently the largest substrate size in commercial production and offer the highest “panelization” efficiency, according to Eusden. The next generation (Gen 10) will be even more efficient, supporting display panels ranging from 32-inch up to 65-inch. However, Gen 10 glass will measure three-by-three meters, requiring special handling. Corning planned to display a Gen 10 prototype at its Display Taiwan booth, but Eusden said it was too difficult to transport.
Focusing on the LCD TV market, Eusden said that 105 million units will be shipped in 2008, marking the 50 percent penetration rate for the product. That should climb to 60 percent in 2009, accounting for 1.5 billion square feet of glass demand.
On the question of how the U.S. economic slowdown might impact the market, Eusden was bullish, noting that it was “business as usual” for Corning. “Recent U.S. recessions have had little or no impact on worldwide TV sales,” he explained. LCD TV sales in the U.S. are expected to climb from 23 million units last year to 29 million in 2008.
Build a Freeway or a Fab? Wang Ponders Cost… and Glass Size
Another speaker at the conference, Frank Wang from Morgan Stanley Taiwan Ltd, believes the rapid increase in LCD glass size cannot continue due to size constraints in the transportation infrastructure such as elevators, tunnels and so forth. “I think this migration is very close to the end,” he said.
Wang also noted that capital spending by TFT LCD makers was reaching a limit. For example, Taiwan panel makers are now larger than the banks that they borrow money from, potentially putting a hold on future capital expansion. Wang noted that for the cost of one new TFT LCD fab, typically $3 billion, you could build a 600 kilometer freeway in China. He further noted that Taipei 101, the world’s tallest building, cost almost half that of a new TFT LCD fab.
TFT LCD makers should undertake more R&D investment to develop future innovations in flat panel displays rather than continue more capital spending, according to Wang. “Imagine what you can do with $3 billion in R&D,” he said.
In One Year, Doubling of Touch-Screen Cell Phones, says Displaybank’s Kim
During a separate session at the Display Taiwan 2008 Business and Technology Forum, Kenny Kim, executive vice president of Korean company Displaybank, presented figures showing that market penetration for touch screens in cell phones will climb from 14 percent in 2007 to 31 percent in 2009. Kim also noted that a hot new growth sector was public information displays, which are expected to grow at a compound annual rate of 43 percent in the five years through 2012, reaching 8.3 million units.
Hsu Says LCD TVs Show Strong Growth Potential in Emerging Markets
Despite relatively high market penetration in developed countries, the LCD TV business has plenty of room left for growth, thanks to emerging markets where penetration rates are much lower, according to Frank Hsu of AU Optronics. “As panel makers, our homework is to develop low cost products to meet [emerging] markets,” said Hsu at Display Taiwan 2008. “LCD TV still has a lot of potential because many of the markets have not yet been reached.”
For 2008, AU Optronics is forecasting that global shipments of LCD TVs (including “moni TVs”) will approach 110 million units, representing 35 percent year-on-year growth. While market penetration in Japan, Europe and the U.S. is above 80 percent, the emerging markets are much lower, in the 20 to 40 percent range. For large area TFT LCD applications, LCD TVs dominate, accounting for an estimated 52 percent of total revenues in 2008, up from 27 percent of total large area revenues in 2005.
Jakhanwal Discusses OLEDs: Tough but Lucrative for High-end Niche Applications
In a separate presentation, Vinita Jakhanwal, principal analyst with market research firm iSuppli, noted that OLED displays have been viewed as an emerging technology for the past few years but are slowing starting to find commercial acceptance. OLED units will reach 100 million this year and triple to 300 million by 2014, according to iSuppli. Revenues are expected to grow even faster, from $500 million to $5 billion over the same period, due mainly to the price premium OLED products can command in high-end niche applications.
Business conditions in the OLED market have been tough for suppliers because the technology, though superior to LCDs in many ways, competes with lower cost LCD technology, according to Jakhanwal. This has subsequently led to a shake out in suppliers. Currently, the main applications for OLED displays are in mobile handsets and MP3 products. The OLED share of the handset market will grow from 3 percent in 2007 to 6 percent in 2011, according to iSuppli. In the sub-display market, the technology’s share will grow from 13 percent to 19 percent over the same period. Other potential new applications include notebook PCs, with Samsung SDI planning to produce a notebook OLED in the 2010 timeframe.
Jakhanwal pointed out that a major challenge facing OLED companies was not only achieving more efficient manufacturing to lower prices, but to improve the technology to keep ahead of LCDs. Another barrier to the technology’s market growth has been the limited supplier base. Large display customers such as Nokia “definitely feel uncomfortable working with a single supplier situation,” she said.
The much talked about OLED mobile TV market is still only in prototype stage, while new technologies such as transparent OLEDs and dual-sided OLED displays are in the very early stages of R&D and won’t see commercial applications for a few more years, according to Jakhanwal.
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