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IC Insights recently released its new Global Wafer Capacity 2019-2023 report that provides in-depth detail, analyses, and forecasts for IC industry capacity by wafer size, process geometry, region, and product type through 2023.  Figure 1 shows the world’s installed monthly wafer production capacity by geographic region (or country) as of December 2018.  Each number represents the total installed monthly capacity of fabs located in that region regardless of the headquarters location of the company that own the fab(s).  For example, the wafer capacity that South Korea-based Samsung has installed in the U.S. is counted in the North America capacity total, not in the South Korea capacity total.  The ROW “region” consists primarily of Singapore, Israel, and Malaysia, but also includes countries/regions such as Russia, Belarus, and Australia.

Figure 1

As shown, Taiwan led all regions/countries in wafer capacity with 21.8% share, a slight increase from 21.3% in 2017 (Taiwan first became the global wafer capacity leader in 2015.)  Taiwan’s capacity share was only slightly ahead of South Korea, which accounted for 21.3% of global wafer capacity in 2018, according to the Global Wafer Capacity 2019-2023 report.  TSMC in Taiwan and Samsung and SK Hynix in South Korea accounted for the vast share of wafer fab capacity in each country and were the top three capacity leaders worldwide. TSMC held 67% of Taiwan’s capacity while Samsung and SK Hynix represented 94% of the installed IC wafer capacity in South Korea at the end of 2018.

Japan remained firmly in third place with just over 16.8% of global wafer fab capacity.  Micron’s purchase of Elpida several years ago and other recent major changes in manufacturing strategies of companies in Japan, including Panasonic spinning off some of its fabs into separate companies, means that the top two companies (Toshiba Memory and Renesas) accounted for 62% of that country’s wafer fab capacity.

China showed the largest increase in global wafer capacity share in 2018, rising 1.7 percentage points from a 10.8% share in 2017 to a 12.5% share in 2018.  It nearly tied North America as the fourth-largest country/region with installed capacity.  A lot of buzz circulated about China-based startups and their new wafer fabs during 2018. Meanwhile, other global companies expanded their manufacturing presence in China last year so it would be expected that the country’s capacity share would show a significant increase.  China’s percentage gain came mostly at the expense of ROW and North America.  The share of capacity in the ROW region slipped 0.8 percentage points from 9.5% in 2017 to 8.7% in 2018. North America’s share of capacity declined 0.4 percentage points in 2018.

By Maria Vetrano

With over 25 years of experience in the technology industry, Sri Peruvemba, CMO of CLEARink Displays, is a longtime advocate of electronic display technology. During his presentation at FLEX and MEMS & Sensors Technical Congress 2019, February 18-21 in Monterey, Calif., Peruvemba will explain recent innovations in electronic paper (ePaper) that will open new applications to reflective displays for the first time.

SEMI: ePaper has been around for more than a decade. How has it evolved for wearables and mobile devices?

Peruvemba: ePaper in its current form provides a reflective display that is low power and sunlight-readable to applications such as eReaders and electronic shelf labels (ESLs), both of which are in mass production. There is a much larger opportunity, however, for reflective displays that offer color and video atop the traditional benefits of ePaper. Now possible through electrophoretic total internal reflection (eTIR) – which we have termed ePaper 2.0 – is a low-power technology that allows devices to work for days instead of hours. eTIR offers sunlight readability as well as full color and video-level switching speeds, which satisfies the diverse requirements of wearables and mobile devices.

New electrophoretic total internal reflection (eTIR) display technology uses the charged particles in a fluid to modulate the total internal reflected light from the optical structures incorporated into its novel reflector film. Image courtesy of CLEARink Displays.

SEMI: How do you define a “reflective display?”

Peruvemba: A display that reflects external light to its advantage is a reflective display. This includes the display that uses ambient light rather than a backlight and one that uses the sun rather than fights it.

SEMI: Where is there a larger opportunity for reflective displays that offer color and video over the traditional benefits of ePaper?

Peruvemba: While most of us are familiar with ePaper in applications such as eReaders and wearables that need sunlight readability, there is an untapped market in the wearables space for applications that require internet browsing and color, even video, displays. ESLs are a good example. Retailers are no longer content to show prices. They also want to show specials, display color ads, and run video and animation to enhance product differentiation. Displays in tablets, digital signage and automotive are additional targets.

SEMI: How large is the opportunity?

Peruvemba: The electronic display industry has been trying to build reflective displays that are low-power color and video for many years but without success. Hence, the opportunity is in the tens of billions of U.S. dollars in outdoor signs, automotive displays, tablets, wearables, shelf labels and dozens of others products.

SEMI: What will it take for manufacturers to migrate from LCD or OLED to eTIR?

Peruvemba: The good news is that implementation is pretty much the same as with the LCD or OLED displays currently in use. The interfaces, connections and form factors remain form-, fit-, function-compatible. Only the software/waveforms and drive voltages will change/reduce. This allows the manufacture of our tech., ePaper 2.0, on the old LCD lines that are already in use. You can literally go back and forth between ePaper 2.0 and LCD on a day-to-day basis. This differs from other eTIR implementations, which require new dedicated manufacturing lines that cost tens to hundreds of millions of dollars.

SEMI: Are there other emerging markets that are particularly well-matched to eTIR?

Peruvemba: Tablet devices designed for long use on a single charge, mobile devices including wearables for outdoor applications, Internet of Things (IoT) devices that need high ambient readability, and very low-power and unobtrusive displays in home or office settings represent other emerging markets.

SEMI: What technical obstacles have hindered ePaper in certain markets – and how do you overcome those obstacles?

Peruvemba: Bringing a display technology to market is not only about solving technical and process hurdles. It is also about finding the right one percent of the applications that your technology can uniquely address. Success requires developing the ecosystem of subcomponent suppliers and peripheral technology providers (like touch and front lights). Partnering with the display fabs that can mass-produce your technology is another important step.

With most emerging technologies, the pursuit of the right customer is the bigger challenge, but for us it has been getting the product into production. Fortunately, we already have customers that have invested in the company and have committed to product volume, so they get early access to our technology.

SEMI: What would you like FLEX and MSTC attendees to take away from your presentation?

Peruvemba: Now just months away from deploying our eTIR technology as ePaper 2.0, we welcome partnership inquiries as we seek to implement eTIR across a range of previously unserved and underserved display markets.

Sri Peruvemba will present ePaper 2.0 — Creating New Markets at FLEX/MSTC on Tuesday, February 19 at 2:45 pm

Register today to connect with him at the event. To learn more about CLEARink Displays, click here.

MSTC FLEX 2019 is organized by MEMS & Sensors Industry Group (MSIG) and FlexTech.

Global shipments of large thin-film transistor (TFT) liquid crystal display (LCD) panels rose again in 2018 despite concerns of over-supply in the market. In particular, area shipments increased by 10.6 percent to 197.9 million square meters compared to the previous year, driven by TV and monitor panels, according to IHS Markit (Nasdaq: INFO).

Fierce price competition in large 65- and 75-inch display panels was ignited as Chinese panel maker BOE started the mass production of the panels in 2018 at its B9 10.5-generation facility. “With BOE operating the 10.5-generation line, panel makers have become more aggressive on pricing since early 2018 to digest their capacity,” said Robin Wu, principal analyst at IHS Markit. “Large panels are still more profitable than smaller ones.”

Rising demand for gaming-PC and professional-purpose monitors boosted shipments of high-end, large panels. “Some panel makers have allocated more monitor panels to the fab, replacing existing TV panels, to make up for poor performance of that business,” Wu said.

Demand for other applications, which include public, automotive and industrial displays, recorded the highest growth rates of 17.5 percent by area and 28.6 percent by unit. “Panel makers view these applications as a new cash cow that can compensate for the sharp price erosion in main panels for TVs, monitors and notebook PCs,” Wu said.

LG Display led the area shipments of large display panels, with a 21 percent share in 2018, followed by BOE (17 percent) and Samsung Display (16 percent). BOE boasted the largest unit-shipment share of 23 percent, followed by LG Display (20 percent) and Innolux (17 percent), according to the Large Area Display Market Tracker by IHS Markit.

Large TFT LCD panel shipment growth is expected to continue in 2019. The preliminary forecast for unit shipments of three major products indicates that panel makers will continue to focus on the monitor and notebook PC panel businesses, increasing shipments by 5.3 percent and 6.6 percent, respectively, over the year, while shipments of TV panels are forecast to grow just 2.6 percent.

In 2019, three new 10.5-generation fabs – ChinaStar’s T6, BOE’s second fab and Foxconn/Sharp’s Guangzhou line – are expected to start mass production. All of them are assigned to manufacture TV panels, further boosting TV panel supply. “As the TV panel business is predicted to remain tough, panel makers, who enjoyed relatively better outcomes with monitor and notebook PC panels in 2018, will likely focus on the IT panel businesses,” Wu said.

The Large Area Display Market Tracker by IHS Markit provides information about the entire range of large display panels shipped worldwide and regionally, including monthly and quarterly revenues and shipments by display area, application, size and aspect ratio for each supplier.

Researchers from Chalmers University of Technology, Sweden, have discovered a simple new tweak that could double the efficiency of organic electronics. OLED-displays, plastic-based solar cells and bioelectronics are just some of the technologies that could benefit from their new discovery, which deals with “double-doped” polymers.

Double doping could improve the light-harvesting efficiency of flexible organic solar cells (left), the switching speed of electronic paper (center) and the power density of piezoelectric textiles (right). Disclaimer: The image may only be used with referral to Epishine, as supplier of the flexible solar cell. For instance: ‘The solar cell was supplied by Epishine AB.’ Credit: Johan Bodell/Chalmers University of Technology

The majority of our everyday electronics are based on inorganic semiconductors, such as silicon. Crucial to their function is a process called doping, which involves weaving impurities into the semiconductor to enhance its electrical conductivity. It is this that allows various components in solar cells and LED screens to work.

For organic – that is, carbon-based – semiconductors, this doping process is similarly of extreme importance. Since the discovery of electrically conducting plastics and polymers, a field for which a Nobel Prize was awarded in 2000, research and development of organic electronics has accelerated quickly. OLED-displays are one example which are already on the market, for example in the latest generation of smartphones. Other applications have not yet been fully realised, due in part to the fact that organic semiconductors have so far not been efficient enough.

Doping in organic semiconductors operates through what is known as a redox reaction. This means that a dopant molecule receives an electron from the semiconductor, increasing the electrical conductivity of the semiconductor. The more dopant molecules that the semiconductor can react with, the higher the conductivity – at least up to a certain limit, after which the conductivity decreases. Currently, the efficiency limit of doped organic semiconductors has been determined by the fact that the dopant molecules have only been able to exchange one electron each.

But now, in an article in the scientific journal Nature Materials, Professor Christian Müller and his group, together with colleagues from seven other universities demonstrate that it is possible to move two electrons to every dopant molecule.

“Through this ‘double doping’ process, the semiconductor can therefore become twice as effective,” says David Kiefer, PhD student in the group and first author of the article.

According to Christian Müller, this innovation is not built on some great technical achievement. Instead, it is simply a case of seeing what others have not seen.

“The whole research field has been totally focused on studying materials which only allow one redox reaction per molecule. We chose to look at a different type of polymer, with lower ionisation energy. We saw that this material allowed the transfer of two electrons to the dopant molecule. It is actually very simple,” says Christian Müller, Professor of Polymer Science at Chalmers University of Technology.

The discovery could allow further improvements to technologies which today are not competitive enough to make it to market. One problem is that polymers simply do not conduct current well enough, and so making the doping techniques more effective has long been a focus for achieving better polymer-based electronics. Now, this doubling of the conductivity of polymers, while using only the same amount of dopant material, over the same surface area as before, could represent the tipping point needed to allow several emerging technologies to be commercialised.

“With OLED displays, the development has come far enough that they are already on the market. But for other technologies to succeed and make it to market something extra is needed. With organic solar cells, for example, or electronic circuits built of organic material, we need the ability to dope certain components to the same extent as silicon-based electronics. Our approach is a step in the right direction,” says Christian Müller.

The discovery offers fundamental knowledge and could help thousands of researchers to achieve advances in flexible electronics, bioelectronics and thermoelectricity. Christian Müller’s research group themselves are researching several different applied areas, with polymer technology at the centre. Among other things, his group is looking into the development of electrically conducting textiles and organic solar cells.

By Christian G. Dieseldorff

This year, SEMI ISS covered it all – from a high-level semiconductor market and global geopolitical overview down to the neuro morphic and quantum level. Here are key takeaways from the Day 1 keynote and Economic Trends and Market Perspectives presentations.

In the opening keynote, Anne Kelleher from Intel pointed to the huge growth of data, with fabs collecting more than 5 billion sensor data points each day. The challenge, Kelleher noted, is to turn massive amounts of data into valuable information. Moore’s law is not dead. New models of computing benefit still from Moore’s law and advances in Si/CMOS technologies for conventional, deep learning, neuro morphic and quantum computing.

With customers expecting continual improvements in applications, the question is whether the chip industry is moving fast enough to meet these expectations, Kelleher said. A broad supply chain, equipment and materials innovations, and attracting the “best of the best” college graduates to fuel innovation is key, she said.

In the economic trends session, Nicholas Burns (ambassador ret.) from Harvard University pointed out that we will see a major shift in power. The U.S. will remain the major world power over the next 10 years, but we will see a major shift in power in the next coming decades as the gap with countries like China, Russia and India continues to narrow.

Duncan Meldrum from Hilltop Economics said that we are passing the peak growth of economic cycle. He warns that a more likely outlook is that a global growth recession is developing. Although semiconductor MSI growth will see a noticeable slowdown in 2019 and 2020, the semiconductor industry is still healthy over the longer term.

Bob Johnson from Gartner sees demand shifting from consumer to commercial applications with higher ROIs and budgets. AI, IoT and 5D are the major enablers. He sees structural changes in the semiconductor industry especially for memory but also for Moore’s law with increasing costs and fewer players.

The DRAM markets shows volatility and NAND market may be negative in 2019 but non-memory are expected to accelerate mainly because of increasing content and some price hikes.

Overall Gartner expects good long-term growth with a CAGR (2017 to 2022) of 5.1%, outpacing 2011 to 2016 CAGR of 2.6%. After a strong 2018 with 13.4% revenue, he forecasts a slower 2019 with 2.6% growth followed by a 8% growth in 2020 and negative growth rate in 2021.

Andrea Lati of VLSI went “Back to fundamentals” in his presentation about the industry. VLSI sees a downside bias due to slowing global economy, tariffs, and trade wars. Future drivers are data economy, cloud, AI and automotive.

As memory leads the 2019 slowdown, analog, power, logic and other sectors remain in positive territory. VLSI lowered its semiconductor equipment forecast for 2018 from 20% (Jan. 2018) to 14% (Dec. 2018) but increased its sales outlook from 8% to 15% in 2018. VLSI expects revenue to slow into the first half of 2019 but increase to over 4% in the second half of the year, resulting in total 2019 drop of 2.7%. Semiconductor equipment sales are expected to drop from 14% in 2018 to -10% in 2019.

Michael Corbett of Linz Consulting, covering wafer fab materials in the years of 3D scaling, sees these as good times for the industry. His outlook for wafer fab materials is bullish based on strong MSI and because wafer fab materials suppliers are getting bigger because of M&As.

In the Market Perspective session, Sujeet Chand of Rockwell Automation pointed out that as more and more data is generated, the problem is how to get value of all the data collected. There is a need to create the right architecture for machine learning and AI and big data is increasingly being replaced by contextual/structured data. He expects Industry 4.0 to drive foundries to become smaller, more flexible and more productive.

In the Technology and Manufacturing session, Aki Sekiguchi of TEL addressed process challenges in the age of co-optimization. The semiconductor industry continues to expand, driven by massive growth of interconnected devices, with heavy demand for processing power and storage. He expects an exponential increase of data from about 40ZB in 2018 to 50ZB in 2020 to 163 ZB in 2026.

Major technologies such as DRAM, 3D NAND and logic are dealing with scaling challenges. The density of DRAM (Mb/chip) is plateauing according to 2015 to 2020 trend data, with DRAM is in need of EUV. Memory capacity demand is leading to increasing layers and higher aspect ratios that is concern for 3D NAND and mainly for plasma etch. With Logic already implementing 3D structures, it appears to be in a solid position.

Buddy Nicoson of Micron talked about his 50 years in the industry and looked ahead to the next 50. The anchors – quality, cost, scale and speed – won’t change. It has been a great journey so far with unprecedented opportunities and challenges ahead of us. We are getting into a convergence (specialization, integration) and solution-based phase. We will see some inflection points in the coming years, with the best yet to come.

Christian G. Dieseldorff is senior principal analyst in the Industry Research and Analysis group at SEMI in California.

This story first appeared on the SEMI blog.

By Cherry Sun

“We are living in a digital world where semiconductors are taken for granted, AI is bringing semiconductors back into the deserved spotlight, and now we are witnessing the dawn of the Cognitive Era enabled by semiconductors,” SEMI president and CEO Ajit Manocha said to an audience of more than 500 during his presentation – Rebirth of the Semiconductor Industry – at the First Global IC Entrepreneur Conference.

Speaking at the Shanghai event in mid-December, Manocha recalled how, when he first entered the semiconductor industry in the 1980s, semiconductors revenue topped out at about $10 billion. Now, with sales having swelled to a staggering $450 billion, the industry is on a much faster growth track. Revenue could reach $500 billion by the end of 2020 and trillions of dollars by 2030.

Over the past two decades, chips have given rise to social media and e-commerce powerhouses such as Google, Facebook, and Alibaba. All rely on heavily on chips, the engines of data centers across all industries. Wave after wave of technology innovation have been powered by semiconductors – from mainframe computers in the 1970s, personal computers in the 1980s, the Internet in the 1990s, and mobile and social networking in the early 20th century, to the current shining stars of technology such as IoT, big data, new memory, virtual reality, autonomous driving and artificial intelligence, Manocha said. New applications across areas such as smart manufacturing and digital healthcare are stoking the latest round of semiconductor growth.

The rise of AI, like all the technologies before it, has renewed the semiconductor industry once again with its promise to drive growth of all industries worldwide, Manocha said. Five years ago, IoT was but a gleam in a technologist’s eye, more hype than reality with doubt about its viability running deep. Today, with about 60 percent of people in the world connected to the Internet, the enormous promise and potential of IoT is flowering.

Industry growth will explode as the melding of AI and IoT birth countless applications and innovations in SMART transportation (0 emissions; 0 fatalities; 0 congestion), smart sensors (agriculture, infrastructure, healthcare) and SMART “Everything” (people, devices, homes, cities, industries, and the list goes on). Indeed, AI is now widely recognized as a chief growth driver of the semiconductor industry well into the future, with semiconductor technology at the core of AI innovation, he said.

Semiconductors are thrusting the fifth industrial revolution into the fast lane. China’s much-anticipated rise as an industry powerhouse over the next few years will only accelerate industry growth, turning current disruptions into future opportunities as SEMI China continues to cultivate connection, collaboration and innovation in China’s fast-growing semiconductor sector.

Cherry Sun is a marketing manager at SEMI China. 

By Walt Custer

Global growth by electronic sector

Now that most companies in our sector analyses have reported their calendar third quarter 2018 financial results, we have final or 3Q’18/2Q’17 growth estimates for the world electronic supply chain (Chart 1). We estimate electronic equipment grew 6.7% on a U.S. dollar-denominated basis.

Source: Custer Consulting Group based on consolidated financial reports of public companies

Electronic equipment growth has peaked for this current business cycle (Chart 2), dropping from +11.1% in the second quarter to 6.7% in the third quarter. Most of the supply chain is responding to this slowing.

Semiconductors, SEMI equipment an Taiwan chip foundries

While the most recent growth rates in Charts 1 & 2 are for the third quarter, October and November growth is included in Chart 3.  Foundry growth was +4.6% in November, world semiconductor shipments eased to +12.7% in October and SEMI capital equipment slipped to +10% also in October. The days of the +30% growth rates are behind us for this current business cycle!

Sources: SIA; SEMI; financial reports of Taiwan listed foundry companies

Global semiconductor growth outlook for 2019

The World Semiconductor Trade Statistics Organization in conjunction with the SIA just updated the chip shipment forecasts for 2018 and 2019 (Chart 4). World semiconductor shipments were estimated to have climbed 15.9% (in U.S. dollars) in 2018 but are predicted to slow to a +2.6% rate in 2019.

Source: www.wsts.org, www.semiconductors.org

Looking forward

The Global Manufacturing PMI (Chart 5) leveled out in November but remained well below its December 2017 high.  This translates to a slower but still positive world expansion in the short term. By region (Chart 6), U.S. growth remains robust, Japan picked up, Europe continues to decelerate, China is near zero growth and Taiwan and South Korea are contracting.

Source: www.markiteconomics.com

ll eyes are on the global economy, Brexit, trade wars and bizarre political wrangling. 2019 could be a very volatile year!

Walt Custer of Custer Consulting Group is an analyst focused on the global electronics industry.

After hitting 7.3 percent growth in 2018, global demand for flat panel displays (FPDs) in terms of area is forecast to expand 6.4 percent to 228 million square meters in 2019. It is the first slowdown in year-on-year growth in four years, according to IHS Markit(Nasdaq: INFO).

Although the FPD demand will continue to grow, mainly driven by migration to larger displays for major applications, such as TVs, desktop monitors, mobile PCs and smartphones, the pace is expected to slow through 2021.

“The uncertainty from rising global trade tension may pose a threat to panel demand,” said Ricky Park, director at IHS Markit.  “Huge investment in panel factories in China is also expected to continue to cause oversupply next year.”

According to the world economy and global markets report by IHS Markit, world real gross domestic product (GDP) growth is forecast to grow 3.0 percent in 2019, following 3.2 percent in 2018 and 3.3 percent in 2017. The 2019 world real GDP growth was revised down from a 3.4 percent forecast in April 2018 as trade disputes between the United States and China worsened. This will partially contribute to slower growth in end-market demand and the lower demand for FPDs next year.

Oversupply is also expected to have an impact as China Star initiates mass production of FPDs from its 10.5thgeneration fabrication plant (fab) – the world’s second largest – in Shenzhen, China, in the first quarter of 2019. HKC will also contribute to an increase in the production capacity by mass producing panels at its new 8.6thgeneration fab in the second quarter 2019. As a result, the production capacity of thin-film transistor panels is expected to increase by 11 percent in 2019 compared to 2018, and the supply will surpass demand at a greater magnitude than 2018.

“As the market forecast for both demand and supply does not look favorable, panel suppliers and set makers are trying to develop more advanced products and technologies, such as 8K resolution for TVs, quantum-dot organic light-emitting diode (QD OLED) TVs and foldable displays for smartphones and tablet PCs, to bolster consumer demand,” Park said.

The excitement about microLEDs has grown exponentially since Apple acquired technology startup Luxvue in 2014. All major display makers have now invested in the technology and other semiconductor or hardware companies such as Intel, Facebook Oculus or Google have joined the pool. Amidst this flurry of news and activity, a new term emerged in early 2017: miniLED. But more than size, the technology and manufacturing infrastructure requirements and the applications clearly differentiate microLEDs and miniLEDs.

Under this dynamic ecosystem, the market research and strategy consulting company, Yole Développement (Yole), releases a dedicated technology & market analysis focused on miniLEDs for display applications. Entitled, MiniLED for Display Applications: LCD & Digital Signage, this report provides a detailed analysis of miniLED technologies in two major display applications: high performance LCDs and narrow pixel pitch LED direct view display digital signage. Yole’s analysts present a comprehensive understanding of miniLED display technologies and describe their competitive landscapes and supply chains.

MiniLED vs. MicroLED: are they the same technologies? Are the applications identical? Contrary to MicroLEDs, miniLEDs can easily be manufactured in existing fabs, even though they might require new equipment to enable cost-effective assembly. So who is doing what? What are the market drivers? Does a dedicated supply chain already exist? MiniLEDs advantages are two-fold in terms of applications: they bring new strength to LCD players in the battle against OLED, and they enable increased LED adoption for digital signage, announce Yole’s analysts. Discover today a snapshot of the miniLED industry, with insights into technology, current status and prospects, roadblocks and key players.

For smartphone applications, miniLEDs are facing a strong incumbent in OLEDs, as their cost to performance ratio has already gained the technology a strong position in high-end/flagship segments. OLED is expected to further increase its share and become dominant as the number of suppliers and global capacity increase dramatically over the next five years and cost continues to drop.

MiniLEDs, however, have a card to play in various small to mid-size high added-value display segments, where OLEDs have been less efficient at overcoming its weaknesses such as cost, lack of availability and longevity issues such as burn-in or image retention. For example in high-end monitors for gaming applications, miniLEDs could bring excellent contrast, high brightness and thin form factors at lower cost than OLEDs.

“The automotive segment is especially compelling, first because of its strong growth potential in terms of volume and revenue, and also because miniLEDs can deliver on every aspect auto-makers are aspiring to: very high contrast and brightness, lifetime, conformability to curved surfaces and ruggedness,” comments Eric Virey, PhD, Senior Market & Technology Analyst at Yole.

Regarding the last point on ruggedness, miniLED-based LCDs offer significant benefits over OLEDs since they only use proven technologies, LED backlights and liquid crystal cells, not much different from already established LCDs. Automakers therefore don’t have to make a leap of faith and hope the new technology will meet the demanding lifetime, environmental and operating temperature specifications they require.

On the TV side, miniLEDs could help LCDs bridge the gap and regain market share against OLEDs on the highly profitable high-end segments. “This opportunity is all the more enticing to panel and display makers that have not invested in OLED technologies and see the potential to extend the lifetime and profitability of their LCD fabs and technologies,” explains Zine Bouhamri, PhD, Technology & Market Analyst at Yole.

For direct view LED displays, miniLEDs used in conjunction with Chip On Board (COB) architecture could enable higher penetration of narrow pixel pitch LED displays in multiple applications, hence increasing the serviceable market. Die size will evolve continuously toward smaller dimensions, possibly down to 30-50µm in order to reduce cost. Adoption in cinema is still highly uncertain but even modest adoption rates would generate very significant upsides.

The flat panel display (FPD) equipment market is expected to start to decline after an unprecedented build-up in 2017 as panel makers take a more cautious approach as they wait for demand to catch up to rapidly ramping capacity. The FPD equipment market is forecast to fall from $20.2 billion in 2017 to $14.0 billion in 2020, declining at a compound annual rate of 11.6 percent, according to IHS Markit (Nasdaq: INFO).

“The expansion of the FPD equipment market that started in 2016 has been driven by the high equipment intensity of new flexible active-matrix organic light-emitting diode (AMOLED) display factories and the scale of Gen 10.5/11 LCD factories,” said Chase Li, senior analyst at IHS Markit. “This expansion has been further fueled by Chinese local governments, which have supported panel makers with various mechanisms such as financing, land grants, reduced taxes, infrastructure and direct subsidies.”

Such broad government support of Chinese FPD fabs for all types of display technologies and factory sizes is starting to distort the supply/demand balance as the new capacity begins to ramp. In the case of flexible AMOLED factories targeting smartphones, many multiple billion-dollar investments and even expansion phases have been moving forward before panel makers have proven their ability to produce high quality panels at high yields and competitive costs. The glut level of thin-film transistor (TFT) AMOLED panels for mobile applications is forecast to exceed 40 percent of the demand in terms of area in 2019. This implies that, on average, factories for mobile applications are likely to be underutilized.

This situation has caused both panel makers and China’s local governments to evaluate more critically new flexible AMOLED factory plans. Even South Korean panel makers have pulled back from their previous plans to expand Gen 6 flexible AMOLED capacity continuously due to slower-than-expected panel demand growth. Reduced spending on AMOLED fabs for mobile applications accounts for most of the decline in equipment spending in 2018 and 2019.

Even so, Chinese local governments continue to fund selected projects despite the tightening of credit, particularly for Gen 10.5/11 LCD factories. These projects are predicted to keep equipment spending relatively firm through 2020. However, it threatens to push the large display supply/demand glut level to a record annual high of 18 percent in 2020, unless panel makers reduce excessive LCD TV panel capacity by converting some of it to OLED TV panel production and shutter less productive legacy factories.

High-end OLED TVs are one segment that is still expected to face tight panel supply for the next few years. Although, demand is low compared to standard LCD TVs, OLED TVs are a growing niche, whose panel demand is forecast to rise from 2.9 million units in 2018 to 6.7 million units in 2020. Being the only panel maker to have commercialized OLED TV panels to-date, LG Display is shipping all the panels it fabricates and running its current factories at full utilization.

According to the AMOLED and LCD Supply Demand & Equipment Tracker by IHS Markit, equipment spending in 2019 will be significantly supported by the conversion of legacy LCD fabs to advanced AMOLED factories. JOLED, Samsung Display and others are utilizing previously purchased TFT tools, while adding OLED frontplane, color conversion, cell and module equipment, hoping that they will keep them ahead of rivals and enable them to ride the growth of the AMOLED TV market.

“The FPD equipment market has always been highly volatile depending on market and technology changes. Some slow-down is not surprising following years of record high equipment spending,” Li said. “How all the equipment being installed will affect the future opportunity is a question that equipment makers are now struggling to answer. Based on IHS Markit analysis, the correction will continue beyond 2020. Even so, hope for expanding the new technology investments in AMOLED and quantum-dot (QD) OLED TVs as well as foldable displays, combined with industry restructuring and increased demand as prices fall offers the hope of another positive cycle coming.”