Revenues for flat panel display (FPD) manufacturing equipment are expected to grow for the third consecutive year to reach $9.1 billion, according to IHS Inc. (NYSE: IHS), a global source of critical information and insight. This level of FPD equipment spending, the highest level since 2011, is being driven by new liquid crystal display (LCD) and active-matrix organic light-emitting diode (AMOLED) panel factories targeting both large-area television and smartphone applications.
In terms of technology, spending will be split nearly evenly between amorphous silicon (a-Si) TV and low-temperature polycrystalline silicon (LTPS) smartphone plants, according to the latest IHS Quarterly FPD Supply/Demand and Capital Spending Report, LTPS investments in both 2015 and 2016 are expected to exceed all-time highs.
“Over the past five years, spending on new LTPS LCD and AMOLED factories has been even more volatile than the overall FPD equipment market,” said Charles Annis, senior director at IHS. “LTPS-related equipment expenditures are now expected to peak in 2015 and 2016, before dropping off again in 2017, Recently announced projects are generating unprecedented levels of LTPS equipment expenditures, including new fab plans for JDI in Japan and Foxconn in Taiwan; expansions of current lines at both Samsung and LG Display in Korea; and new LTPS plants in China being built by AUO, BOE, Tianma and China Star.”
In addition to all the current LTPS fab activity, in 2015 makers continue to invest in a-Si Gen 8 factories targeted at TV applications, mainly in China. Much of this investment is the result of growing demand for large-area panels, which increased 14 percent last year – significantly outstripping capacity growth of 6 percent. This increased demand caused tight supply and firm prices last year, encouraging panel makers to extend capacity expansions. This year large-area demand and supply are forecast to grow at similar rates of 6 percent. Although factory utilization remains at relatively high levels, and there are concerns that growing set inventories will continue to push prices down in the third quarter (Q3) of this year, large-area supply and demand will be balanced for the year.
“Despite the maturing TV market, along with various concerns about the ability of all the new LTPS plants in China to ramp-up smoothly, FPD investment activity remains dynamic,” Annis said. “FPD equipment spending in 2016 is currently forecast to be flat or slightly down. BOE’s recent announcement to build a future Gen 8 factory in Fuzhou, and the world’s first Gen 10.5 fab in Hefei China, suggests that FPD makers still believe that building new factories will continue to lower costs and expand the range of applications.”
Discussion of these topics and more can be found in the IHS Quarterly FPD Supply/Demand and Capital Spending Report. The report covers the most important metrics used to evaluate supply, demand, and capital spending for all major FPD technologies and applications.