For 2023, we expect OLED smartphone panels to increase 7% Y/Y and flexible OLED smartphone panels to increase by 11% Y/Y for a 68% unit share, followed by foldable/rollable OLED smartphone panels increasing by 45% Y/Y to a 4% unit share and rigid OLED smartphone panels declining by 4% Y/Y for a 28% unit share. In 2023, for flexible OLED smartphone panels, we expect all brands to increase panel procurements by single- and double-digit percentages as a result of flexible OLED panel ASPs declining 3% Y/Y and more flexible OLED capacity coming online. We expect rigid OLED smartphone panels to continue to decline by 2% Y/Y as ASPs for flexible OLED smartphone panels continue to decline, several brands will have completely exited the rigid OLED smartphone category and excess rigid OLED capacity will be used for IT applications.
Advanced Smartphone Display Shipment and Technology Report
DSCC had given guidance in December of last year about the general reduction in display capacity. The company’s Advanced Smartphone Display Shipment and Technology Report, and a blog post, LCD TV Panel Prices in Holding Pattern, continue the trend of trends in the display industry being either in a down cycle or holding pattern. Hot on the heels of the excitement and wonder around CES 2023, it’s probably not a great hangover cure but, as they say in sales, you are only as good as your last month.
In November, 2022, DSCC’s David Naranjo had anticipated a 14% decline in 2022 OLED panel shipments for smartphones. While that figure was not as bad on final reflection, the pressure on prices is going to hang over the market even with an anticipate increase in shipments for 2023.
After LCD TV panel prices hit bottom in September 2022 and prices for several sizes increased in Q4, the rally in prices proved to be short-lived and prices appear to be in a holding pattern, with no changes in December or January. While prices for most sizes increased in Q4, the increase was modest. The last phase of the downward spiral in panel prices was characterized by a massive inventory drawdown in the display supply chain and a corresponding massive reduction in fab utilization by panel makers.
LCD TV Panel Prices in Holding Pattern
In the same vein, a combination of supply-side disruptions due to COVID in China, and a general drop in demand, has hit LCD panel shipments.
There are similar dynamics in play right now: weakened demand, price pressures, and likely price pressure even with some modest growth expectations in 2023. Capacity seems to be outrunning demand, and inventory corrections are not the main factor. Given all that, we still believe that the outlook for the second half of the year may be rosier than anticipated if only because companies will adapt to the macro-economic environment, there is likely to be a post-winter drop in COVID-related interruptions, and consumers will become inured to the uncertainties of the general economy. If the job market turns, which it has refused to do so far, then all bets are off.
