Global Flat Panel Display Market
March 3, 2014, US Flat Panel Display Connected Devices Conference, Santa Clara, CA—Paul Gagnon from NPD DisplaySearch described the trends and drivers for the variety of flat panel displays. The market is going into a period of introspection with the top issue being good enough performance versus convenience and cost.
The industry has always been working on performance with goals of higher resolution, better color performance, higher pixel density, and ever larger sizes. All of these advancements have made displays into technology masterpieces, but now, we have to ask the question is there any additional value for consumers. In addition to diminishing returns for the investments, the industry must also consider the resource allocations needed to continue improving these displays.
In the early ’00’s, the industry showed strong growth rates as smart phones were introduced, flat-panel TVs are launched, and notebook PCs gained consumer adoption. There were lots of drivers for these increases in the marketplace, but now many of these markets are becoming saturated. In addition, we’re now seeing mobile device displays cannibalize the PC and TV monitor markets.
Nevertheless, their expectations for continued growth after this current pause to balance supply and demand. The last half decade showed very low growth, partially due to the recession. Total display area continues to grow although down a couple of percent in the last five years compared to ’90-’07, when it was growing over 12 percent per year. The large area applications continued to dominate total area, but mobile device growth and average display size will start having greater effects in the future.
The industry is starting to see a crossover from smart phones into tablets, but at much lower growth rates in dollars. Mobile devices and dominate in units, while TVs dominate in area. Between ’98 and ’07, revenues increased 14 percent per year, but in the last five years this is dropped to a 3 percent growth per year. Although costs have dropped, price erosion is taking a toll on the larger displays.
Capacity expansion, recession, etc. are leading to fewer next generation displays, which will help increase ASP’s on large displays. These large displays will continue to increase in size, with the average now over 40 inches. In comparison, mobile phones have reached a plateau that is blocked by the 7-8″ tablets. Both tablet and smart phone displays are stabilizing in size. Phones themselves are splitting into two groups. Feature phones are centering on 3-inch displays and smart phone are congregating about 5 inches. Tablets are moving towards large displays in volume.
In other areas of performance, the number of pixels per inch is increasing, especially in small and medium displays. The question is whether there is a need for higher resolution. A small display can have very large pixel per inch capabilities, but the pixels are not visible at the normal use ranges.
TV resolution is flat, except for the entry of 4k displays at around 50 ppi. Higher pixel density requires a change from a-Si to organic transistors to improve power efficiency. Changing the backplane technology will help to reduce the price per inch of display, but will also reduce profits. The average price per inch of display in TVs will cross over below tablets by 2020. most categories of displays will see gradual declines in average price per inch for the next decade.
4k TV is likely to be a growth market, from 1.6M units in ’13 to 12.7M in ’14, mostly in China. The 4k TV price in China is 72 percent lower than the rest of the world. Here, price compression helps adoption. Demand TAM for 32-inch TVs is now much lower than for 60-inch displays. This change in demand is affecting the supply chain, pushing panel capacity utilization rates down to 80 percent. There is pressure to reduce capacity but at a cost of market share.
Global competition is preventing a rapid response in capacity as manufacturing is moving to China from Taiwan and Korea. More consolidation is coming, as profits are a problem for many TV and panel manufacturers. The Japanese companies are vulnerable in TVs as the Chinese TV brands grow. Some of the lower tier companies may consider buying a brand to increase market share and get a sales channel in the developed countries. This consolidation will also affect other display categories.
Some new sources of value to consumers are in curved and flexible displays. OLED will transition from mobile phones to TVs in large sizes and wearable devices may become a new class of display. There are questions about business models and consumer demand for these devices, and the latest Pebble problems show the potential for marketing failures.
The move to OLED for TVs may prove to be a problem. Just like plasma, which provides a better picture at lower cost than LCD, OLED needs to achieve critical mass in the market within a short time or it will gradually fade out of the picture. To date, LCD has shown that it can match any other process technology with volume, diversity, and a good enough picture.
