Flat-Panel Display Demand Soars

What a difference a year makes in the flat-panel display market.

Prior to the Covid-19 pandemic outbreak in early 2020, the flat-panel display (FPD) market was gloomy. Oversupply, falling prices and losses were the common themes in the market.

It’s been a different story during the outbreak. In 2020, the FPD market rebounded. In the stay-at-home economy, consumers went on a buying spree for monitors, PCs, tablets and TVs. As a result, demand for displays exploded. And shortages soon surfaced for display driver ICs and other components.

2021 is expected to be another boom year, but the party may be over in 2022.

Cars, industrial equipment, PCs, smartphones and other products all incorporate flat-panel displays in one form or another. The majority of TV screens are based on liquid-crystal displays (LCDs). TVs use other display types, such as organic light-emitting diodes (OLEDs) and quantum dots.

Smartphone displays are based on LCDs and OLEDs. Other display technologies, such as microLEDs and miniLEDs, are in the works. Flat-panel displays are made in giant fabs. Suppliers from China, Korea and Taiwan dominate the display market.

Bust to boom
It’s been a roller coaster ride in the arena. “Before Covid, the FPD market in the second half of 2019 was not very pretty,” said Ross Young, CEO of Display Supply Chain Consultants (DSCC), in a presentation at Display Week 2021. “We had declining revenues, declining prices, declining margins, companies announcing their exit in the LCD market, CapEx was falling, and there was little interest from investors.”

Worldwide FPD revenues fell by 5% in 2018, according to DSCC. Then, in 2019, the market declined by 8%, according to the firm. And prior to Covid-19, the FPD outlook was for a mere 2% growth in 2020, they added.

Basically, demand for computers, TVs and other products were sluggish. Plus, there was too much display manufacturing capacity. So product prices fell and many suppliers were swimming in red ink. Driven by higher-margin OLEDs, the smartphone display market was slightly better.

“So, things were pretty bad in the display market, and then Covid hit,” Young said.

The result? “From a demand standpoint, Covid-19 led to strong demand from the IT market. The education market saw very robust demand. Students and teachers needed more home computers, and schools accelerated their IT investments. Workers made home PCs a priority. There are also millions of workers that went from jobs not requiring a PC to jobs requiring a home PC,” he said.

Demand for PCs, TVs and other products fueled renewed growth for displays. In total, the flat-panel display market reached $118 billion in 2020, up 6% over 2019, according to DSCC. That’s above the previous 2% growth forecast.

The numbers include LCDs, OLEDs and other displays. Of those figures, the LCD market reached $84 billion, while OLEDs were $33 billion in 2020, according to DSCC.

Then, the market is projected to hit a record $152 billion in 2021, up 29% over 2020, according to the firm. Of those figures, the LCD market is expected to reach $113 billion, while OLEDs are $39 billion, they said.

Average selling prices are up, but the market is still beset with component shortages. “Panel prices have risen significantly, particularly since August of last year. They’ve more than doubled in some cases,” Young said. “Adding to the pricing pressure have been components shortages in driver ICs, touch controllers, glass substrates compensation film, polarizers and other materials. We do expect prices to peak in Q3 (of 2021) as a result of shortages easing and the impact of double booking, leaving some potential air pockets in demand. We expect panel pricing to fall in the fourth quarter, but we’re not expecting sharp downturns, as in the past, due to slower supply growth.”

Going forward, the market may come back down to earth. “After 29% growth in 2021, the FPD market is expected to fall by 5% in 2022, as shortage concerns ease, supply growth outpaces demand growth, and prices fall. We expect the IT markets to decline. TV revenues will fall significantly on lower prices, but still slower price declines than in previous downturns,” he said.

It’s not all doom and gloom. Displays are no longer an afterthought. Several new technologies are in the works. Let the party continue.