Strong Demand to Push Up Prices of LCD Panels for Smartphones
October 24, 2016 | TrendForceEstimated reading time: 2 minutes
Prices of LCD panels for smartphone displays will remain high to the end of 2016 as there is no letup in demand, according to the latest analysis by WitsView, a division of TrendForce. Prices of mid-range and low-end smartphone panels have risen for three consecutive quarters this year. Moreover, strong short-term demand for mid-range and high-end smartphones with FHD resolution screens are also pushing up prices of FHD Cell panels.
“Various factors and events have reduced LCD panel supply during 2016, such as the earthquake in Taiwan, fab closures and changes in product strategies of some panel makers,” said Boyce Fan, senior research manager of WitsView. “At the same time, smartphone demand in China has noticeably picked up rather than remaining stagnant as in the previous two years. The strong Chinese smartphone market together with the series of disruptions to the panel supply has created a significant supply-demand imbalance in the smartphone panel market in the recent period.”
The dramatic upswing in smartphone panel prices is mainly attributed to the steady growth in large-size panel demand since the start of the third quarter. Panel makers have allocated more of their production capacities to satisfy the large-size segments of the market, and this in turn has cut into their smartphone panel capacities.
Based on WitsView’s research, prices of 5-inch HD Cell panels reached US$4 on average in September and may climb to US$5 in October. Prices of 5.5-inch FHD Cell panels also stayed in the high US$6~7 range and is expected to increase again before the end of year. As the supply in the competing AMOLED market is also very tight, smartphone makers may have to use LTPS LCD instead for some of their upcoming devices. Thus, some of the demand shift from AMOLED panels to FHD resolution LTPS LCD panels.
Prices of smartphone will encounter strong downward pressure after the first quarter of 2017
“On the whole, prices in the LCD smartphone panel market have risen three quarters in succession because supply has yet to caught up with demand,” Fan pointed out. “Downward price corrections will occur when the additional production capacities for different types of panels become available. The general price trend of FHD panels will change direction when the newly built LTPS LCD panel fabs begin operation. As for HD resolution panels, their price correction will happen when Gen-8.5 fabs of the Chinese panel makers start mass producing smartphone panels.
There are five LTPS LCD panel fabs that were supposed to go into operation throughout 2016, but they have all postponed their mass production of to either the end of 2016 or the start of 2017. Thus, the supply of FHD resolution panels for mid-range and high-end devices will expand at the turn of the year. In addition, the Gen-8.5 fabs of Chinese panel makers have scheduled to roll out HD resolution panels for smartphones towards the year’s end. This will also have an impact on the smartphone panel supply in 2017.
On the demand side, the market for traditional TFT-LCD panels used in smartphones is facing slowing growth in the end device market and the increasing visibility of smartphones carrying AMOLED displays. The penetration rate of AMOLED in the global smartphone market will reach almost 30% in 2017, based on WitsView’s projection. As smartphone makers increasingly use the competing technology, the TFT-LCD market will continue to contract.
Taking the above factors into consideration, WitsView expects supply to catch up and gradually outpace demand in the LCD smartphone panel market after the first quarter of 2017, creating significant downward pressure on prices.
Suggested Items
IDTechEx Examines the Opportunities for Wearables in Digital Health
04/19/2024 | IDTechExIDTechEx’s report, “Digital Health and Artificial Intelligence 2024-2034: Trends, Opportunities, and Outlook”, covers this ongoing trend in the consumer health wearables market and includes analysis of the opportunities and roadmap for biometric monitoring.
Real Time with... IPC APEX EXPO 2024: Pluritec's Expansion and Growth in the North American Market
04/19/2024 | Real Time with...IPC APEX EXPONicola Doria, president of Pluritec, discusses the company's strategic focus on the North American market, their investment in a new sales organization, service expansion, and a new process integration line. The conversation also covers market response and future installations, as well as Pluritec's new partnership with IEC.
Mycronic Releases Interim Report January–March 2024
04/18/2024 | MycronicNet sales increased 39 percent to SEK 1,692 (1,219) million. Based on constant exchange rates, net sales increased 42 percent.
Real Time with... IPC APEX EXPO 2024: Exploring Silicone Solutions with R&D Director of CHT
04/17/2024 | Real Time with...IPC APEX EXPOIn this interview, Gerry Ellis, the R&D director for CHT, discusses the product range offered by his company. He explains the challenges in creating base formulations, the drive to make products more user-friendly, and the various application techniques involved. Ellis also highlights the key market segments and the significance of providing efficient solutions to customers.
Gartner Forecasts Worldwide IT Spending to Grow 8% in 2024
04/17/2024 | Gartner, Inc.Worldwide IT spending is expected to total $5.06 trillion in 2024, an increase of 8% from 2023, according to the latest forecast by Gartner, Inc. This is an increase from the previous quarter’s forecast of 6.8% growth and puts worldwide IT spending on track to surpass $8 trillion well before the end of the decade.