AMOLED is by far the best type of small to mid-sized panel for its great colours, contrast, black blacks and low power draw. Demand this year for small and mid-size panels is expected to grow by 16.5% to 5.9 million square metres – that is expected to be 14.4 million square metres by 2019.
AMOLED is harder to make and therefore more expensive. Early manufacturers/adopters like Samsung (SDC) and LG (LGD) had 96% of the market in 2015 – barely enough for their own needs leaving little for sale to others.
There is also a huge and growing demand for AMOLED from the Chinese tigers (OPPO, VIVO, Xiamoi, Lenovo and Huawei) who at present can’t get enough for their flagship requirements – let alone bring it to mid-range handsets. Chinese manufacturers are gradually starting to supply AMOLED – probably meeting 5% of the demand by the end of 2016 and growing to 19% in 2019. Japan currently does not make AMOLED but will start in 2018 supplying 3% of the market and growing from there.
“For many panel makers, the mass production of AMOLED products is being blocked by several major hurdles. In the upstream, just a few companies control the source of manufacturing equipment such as the vapour deposition systems for mid- and small-size AMOLED panels. AMOLED is a very challenging technology, so new entrants to this market are likely to encounter a lot of problems when trying to maintain stable and high panel yields during the initial stages. In the short term, SDC/LGD will have absolute dominance in the small- and mid-size segments without rivals,” said Boyce Fan, WitsView (Trendforce) senior research manager.
Demand from Samsung alone has helped raised its average capacity utilization rate for AMOLED panel fabrication processes, from 75~80% in 2015 to about 90% and above this year. It is planning to expand its AMOLED capacity to meet with the anticipated huge demand from Apple.
LG Display (LGD), the other major South Korean panel maker, is accelerating its schedule for increasing AMOLED capacity.
SDC and LGD are also well placed to shift first to flexible display products. WitsView forecasts that flexible displays (FOLED) will take up 61% of the small- and mid-size AMOLED panel capacity worldwide by 2019.