Unit demand for display glass used for liquid crystal display (LCD) TVs, desktop monitors, mobile PCs and other major large panel applications is forecast to fall in 2016. However average diagonal screen sizes for each application are expanding, which means display glass area demand will continue to increase, even as unit shipments decrease. Total LCD glass capacity is now matching glass area demand, according to IHS Inc. (NYSE: IHS), a global source of critical information and insight.
Area demand for glass used in LCD panels is forecast to rise at a compound annual growth rate (CAGR) of 13 percent from 2015 to 2018. Average LCD TV screen size is expected to increase from 39.3 inches in 2015 to 40.8 inches in 2016, according to the latest quarterly IHS Display Glass Market Tracker.
“Because manufacturing LCD glass requires special tanks for the LCD substrates used in processing, the manufacturing cost of LCD glass is higher than for other materials, and tank investment can be a risky proposition for glass makers,” said Tadashi Uno, senior analyst, IHS Technology. “For these reasons, LCD glass manufacturers are looking to increase the capacity of existing tanks, rather than making additional investments in new tanks.”
As competition in this market intensifies, panel makers are suffering from module price reductions. As profits decline, major large panel makers are not only pressuring vendors to reduce the costs of materials and components, they are also trying to save on glass costs by manufacturing thinner LCD glass. Between 2012 and 2014, major panel makers successfully shifted glass substrate thickness from 0.7 millimeters to 0.5 millimeters; panel makers are now trying to create display glass that is even thinner, decreasing thickness from 0.5 millimeters to 0.4 millimeters. “Samsung is the first company out of the gate with these new efforts, but other major panel makers will soon follow,” Uno said.