What Display Daily thinks: We know that TVs will get bigger, on average, and not smaller. Size matters to consumers. And we know that equipment sales had nowhere else to go but up after 2023. However, I am not sure that stabilization in pricing or even higher panel pricing is an option, even with all this data.
If anything, LCD suppliers should be keeping up the pressure in the TV market with MiniLED backlit TVs to price out OLED. It’s doable. It’s necessary. OLED pricing should be squeezed.
Smartphones remain highly competitive, and Apple’s years of being a weather vane for the industry may be over. Not the profitability and the trillions of dollars of valuation, mind you. But the shine has gone off the fruit. That leaves aggressive vendors and aggressive deal making. Prices get squeezed.
So, a recovery for factory equipment in 2024 is a good thing, a sign of better times ahead. But, really, it’s a normalization more than a recovery. And pricing and profitability should take a back seat to market share for manufacturers. You want to feel good about 2025? Be one of the survivors, claw at every point of market share, and outgun your competition. Because there isn’t a consumer demand surge that can cover for any other strategy.
Even the much lauded AI PCs, and the Windows upgrade cycle seem too optimistic. AI is still an ROI mystery. It’s primarily funded by deep pocketed investors, very inefficient in terms of costs so no one is paying for its actual costs, and it scares the hell out of most people. So, IT markets are not likely to give anyone in the display industry what they want.
Market share. Not profitability. That’s going to be the winning strategy for 2024. For a lucky few. For everyone else, more of the same, which is, at best, kind of meh.
Display Equipment Market Set for Rebound in 2024
The market for capital equipment used to manufacture OLED and LCD panels is expected to rebound sharply after a steep decline in 2023. According to DSCC, spending in the sector will surge by 54%, reaching $7.7 billion. This follows a precipitous 59% drop in 2023, driven by pandemic-induced market disruptions and a glut of supply.
Samsung Display’s A6 fab is set to lead the spending spree, accounting for a 30% share of the total market. This is followed by Tianma’s TM19 G8.6 LCD fab with a 25% share and TCL CSOT’s T9 G8.6 LCD fab at 12%. BOE’s G6 LTPS LCD fab, B20, is expected to contribute 9% to the total. In aggregate, Samsung Display will dominate with a 31% share, followed by Tianma at 28% and BOE at 16%.
Canon/Tokki is projected to be the top supplier, commanding a 13.4% market share and seeing revenues more than double to over $1 billion. Applied Materials is anticipated to hold the second position with an 8.4% share, driven by substantial growth in several key segments including CVD and backplane technologies.
The market recovery is not uniform across all technologies. DSCC reports that LCD spending will slightly outpace OLED, with $3.8 billion dedicated to LCD equipment compared to $3.7 billion for OLED. Emerging technologies such as Micro OLEDs and MicroLEDs will make up the remainder. IT fabs are expected to dominate, accounting for 78% of the total spending in 2024, a sharp rise from 38%.
Regionally, China will continue to lead, although its share will decline to 67% from 83%. Meanwhile, Korea’s share is projected to increase significantly, from 2% to 32%, driven by new investments and repurposing of existing facilities.
Omdia had projected a 153% growth in the display equipment market to $7.8 billion in 2024 so, everything seems to be aligning with general analyst’ expectations. However, in a recent report, Omdia highlights the importance of factory utilization rates.
Historically, factory utilization averaged around 84%, but it dropped significantly to 70.7% from the third quarter of 2022 to the fourth quarter of 2023 due to a post-pandemic market glut. However, with demand growth outpacing capacity expansion, Omdia projected that large-area factory utilization would increase to almost 90% by the third quarter of 2024 and remain healthy in the coming years. This increase in utilization was expected to be driven by a rise in panel area demand, with consumers purchasing larger monitors and TVs.
Omdia forecasted that factory utilization would further increase annually, reaching nearly 89% by 2026. Additionally, Sharp’s decision to close its SDP Gen 10 LCD factory in Sakai, Japan, was anticipated to reduce available production capacity, leading to more balanced supply and demand and higher utilization rates. The statement concluded that achieving and maintaining a 90% utilization rate was crucial for supporting panel prices and encouraging moderate capacity expansion, which was essential for maximizing profitability as the FPD industry matured.
