Spending on capital equipment to manufacture displays utilizing LCD and OLED technology is bit down, but China continues to be a bright spot, according to the latest quarterly report on LCD and OLED equipment spending from market research firm Display Supply Chain Consultants (DSCC) of Austin, TX.
According to the firm, display suppliers are predicted to spend $109 billion between 2017 and 2022 (see Figure 1), down from $116 billion predicted last quarter, to meet the demand for larger and higher resolution TVs and thinner, lighter, and flexible mobile displays.
While 2017 was a record year, 2018 is expected to be a down year outside of China with total spending down 13 percent vs. DSCC’s previous forecast of a 9 percent decline, according to DSCC. Worse, Korea’s share of spending is expected to fall from 42 percent in 2017 to just 12 percent in 2018, a 75 percent decline. However, China appears to be saving the market, with capital equipment spending there expected to soar 49 percent 2018 and account for an 88 percent share.
According to DSCC, 2018 equipment spending of $21 billion is expected to be evenly split between LCD and OLED fabs, with LCD spending rising 16 percent and OLED spending falling 30 percent. However, from 2019, OLED spending and growth is expected to outpace LCD spending, as OLED technology makes greater inroads into sectors such as mobile devices and the TV market.
“China is clearly driving display spending and will account for an 88 percent share of display equipment spending in 2018 consisting of 83 percent of OLED equipment spending and 93 percent of LCD equipment spending at a total of $18.9 billion,” says DSCC CEO Ross Young, in a statement. “China’s capacity growth is expected to rise at a 17 percent CAGR from 2017 through 2022, with no other region growing over 3 percent.”
According to DSCC, Bookings are expected to fall 23 percent in 2018 due to fab delays, but positive bookings growth is expected in 2019 and 2020. As a result, the display book-to-bill was 0.94 in 2017 and is expected to fall to 0.83 in 2018, before rising to 0.96 in 2019 and 1.01 in 2020.
