Wednesday, 18 Sep 2019

Flexible AMOLED display manufacturing capacity to grow 91% CAGR between 2016 and 2020

To absorb all new capacity flexible AMOLED panels needs to expand the market beyond smartphones to tablet PCs, notebooks and new form factors enabled by foldable displays

26 Jul 2017 | Editor

According to the latest analysis by IHS Markit, between 2016 and 2020, China, Japan and South Korea will build the equivalent of 46 new flexible AMOLED fabs, whose monthly capacity reaches 30,000 substrates, each. These fabs will add 18.6 million m2 of new plastic substrate production capability, more than 13 times the industry’s current level.

In the current, unprecedented phase of active matrix organic light emitting diode (AMOLED) panel factory build-out, flexible AMOLED capacity will expand from 1.5 million m2 to 20.1 million m2 between 2016 and 2020, at a compound annual growth rate of 91%.

In 2016, flexible capacity, or factories with the ability to produce AMOLEDs on plastic substrates, only accounted for 28% of total capacity targeting mobile applications. This will increase to 80% by 2020 as almost every new Gen-6 fab and smaller factory built over the next four years will be flexible compatible.

IHS Markit forecasts that the tight AMOLED panel supply in 2016 will continually give way to a growing capacity-based glut. The supply is predicted to exceed demand by more than 45% in 2020, when 40 percent of smartphones will adopt AMOLED panels.

High manufacturing costs for most makers will keep average rigid AMOLED panel prices 40% above equivalent LCD panels, while flexible AMOLED panel prices will remain 100% higher.

To absorb all the new capacity in the pipeline, flexible AMOLED panels will need to expand the market beyond smartphones to tablet PCs, notebooks and new form factors enabled by foldable displays. Ultimately, the rapid growth of flexible AMOLED capacity and the resulting increase in panel production will help to lower costs, increase yields and improve quality.

In the long-run, this will spur further adoption into more applications; however, to get there, the industry may first need to cycle through a difficult period of digesting the 46 new flexible fabs now being built.

IHS Markit - AMOLED manufacturing capacity

Figure: IHS Markit - AMOLED manufacturing capacity

"All of the new capacity will facilitate a rapid increase in flexible AMOLED panel adoption in smartphones" "Nevertheless, as so much new flexible capacity is being added, it is starting to raise concerns that the market will not be able to absorb all of the potential output."

"AMOLED displays will offer excellent image quality and form factor advantages in high-end phones. Despite excessive capacity availability, the challenge to faster adoption will be costs" "Smartphone makers, targeting mid and low-end market segments, may want to buy flexible AMOLED panels, but are likely to be restricted by lingering high prices."

Charles Annis, senior director, IHS Markit


About IHS Markit

IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions.

IHS Markit has more than 50,000 key business and government customers, including 85 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.

Source: IHS Markit

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