LCD Declines Faceplate Industry Fears Negative Cash Flow For Several Years

- Mar 27, 2018-

                  The panel industry is facing a change from generation to generation, OLED is gradually emerging, and output of Ming (2017) is expected to increase. This year, OLED production is still not enough, and LCD panels that can survive the rest of the year will again face a dilemma of falling prices next year.

                   The Wall Street Journal reported on the 9th, the market generally estimates that the next-generation iPhone's high-end models are expected to adopt OLED panels. However, since small-size OLED panels currently have only one supplier of Samsung Electronics, they cannot find OLED suppliers for smart phone manufacturers. Can continue to be on the LCD panel, and then support the LCD panel price. However, with the efforts of Chinese companies next year, OLED supply is expected to gradually increase, which may impact the LCD panel offer.

                   At the same time, LG and Japan Display, Sharp and other Apple suppliers have scaled up billions of dollars to increase OLED production capacity, which means that before the significant revenue growth, manufacturers may have to endure years of cash outflows. Goldman Sachs estimates that LG Display will turn negative this year and the next two years. Not only that, with the increase in OLED supply, the gross margin of the industry may also be compressed.

                   Next year, smart phone panel market will enter a watershed? It is rumored that next year Apple's iPhone will use curved OLEDs (flexible OLEDs and flexible OLEDs), which is expected to trigger an upsurge, allowing 2017 high-end smart phone panels to be based on curved OLEDs. In the past, high-order machine-specific rigid OLEDs will move downwards for medium and low-end models. As a result, hard-OLEDs will erode the LCD panel market, and the two companies may face intense competition.

                   Korean media etnews reported that Samsung sprinted sales of OLED smart phone panels and its panel maker Samsung Display will increase hard OLED production capacity. The industry estimates that the production of rigid OLEDs for the A2 plant will increase from the current monthly production of 180,000 wafers to the production of 190,000 wafers per month next year. At the same time, the depreciation of the A1 and A2 plants has largely been completed, and the yield and productivity of hard OLEDs have also been greatly improved. Various factors can drive down production costs and allow hard-to-use OLEDs to be used in low-end smart phones.

                  In view of this, Samsung Electronics plans to expand the use of OLED panels. The OLED panel is the highest order of the curved OLED, which was originally limited to the use of the flagship, and the Galaxy A series of smart phones in the future will be equipped. Hard OLEDs are mostly used in medium and high-end models, and will be further used in low-end models. This trend can threaten the LCD panel. Liquid crystal is the most widely used smart phone screen at present.