11.12.19

IHS Markit rounds up 2019 display market and offers 2020 predictions

Displays

IHS Markit has published its display industry 2019 summary and 2020 outlook, highlighting areas for growth, challenges in the market and predictions for the future as we inch closer to 2020.

The report highlights aggressive investment in China with yielded glass area for large-area displays increasing 10% in 2019. 

Panel makers could be entering a ‘survival situation’ in 2019-2021, with panel makers ‘retreating from the business’ because of cash losses and poor prospects. Old fabs are being shut down and staff numbers being cut to optimise financial structures. 

The shutdown of fabrications by Korean companies could have a significant impact on supply and demand in the second and fourth quarter of 2020, with IHS Markit predicting a shorting in the third quarter despite new Gen 10.5 capacities being ramped up in China. 

The Korean restructure or shut down of old capacities is predicted to be a gradual process instead of a one-time event, however despite the possibility of a shortage in the third quarter of 2020, IHS Markit predicts that the Korean shutdowns will not shift the market to a shortage, instead having a short-term effect and rushes. 

Chinese LCD manufacturers are expected to continue to ramp up new capacities in the short term to fill gaps or build new Gen 10.5 factories over the long term. 

Over 2019, Gen 10.5 fab has stabilised and increased shipments, with Gen 8.5 becoming less competitive for ‘super-large’ TVs, with most panel suppliers considering changing product mixes at their Gen 8.5 fabs. Some suppliers are also considering restructuring capacity for other technologies such as OLED and QD-OLED. 

Looking into 2020, Samsung Display shut down a 120,000 sheets per month Gen 8.5 capacity in the third quarter of 2019, and LG Display indicated that it is willing to shut down some TV production capacity at its Gen 8.5 and Gen 7 fabs, but a long-term strategy is in place to move on to more advanced technologies such as OLED in the near future. 

In 2019, panel prices were forecast to trend downward in the second quarter despite previously being predicted to remain flat. IHS Markit said in the report that the main reasons are high inventories and subdued demand, leading to oversupply with prices falling since May. 

The supply and demand balance is expected to recover in 2020 because of fab shutdowns, primarily by Korean panel makers. Panel prices are forecast to stabilise toward the end of 2019 and into the first half of 2020.