What Display Daily Thinks: Shipments go up, revenues go down. Prices are under pressure. Seems simple enough. But, even if you try and account for it based on all the factor at play, including supply chain management, inventory management, and intensified competition, it doesn’t paint a picture of any short-term upside. Demand is softening, and there is not a great deal to be optimistic about the second half of the year, even if there is a seasonal pick-up in the sale of TVs, computers, and smartphone.
Look at some indicators:
- China’s 618 online shopping extravaganza was not an extravaganza. A muted Chinese market has huge implications because it is the engine that is stoking Chinese panel vendors across smartphones, automotive, and IT products.
- There is still nothing but uncertainty about the US economy and whether it will go into recession or see a drop in inflation and on, and on. The US economy keeps ticking along, but it’s being driven by a financial market that is in constant flop sweat mode.
- If you’re relying on AR/VR to build your market, your revenues, or add to your profits, then good luck. It’s a great market for speculation right now because of the hype, and not much else. Long term, still, no real indication of how the market will be defined.
- Automotive is a growth market, but probably the toughest market for any display supplier to break into. If there is a surge in automotive, it will depress prices as competition intensifies. It’s always the way when there is a rush to find a spot in the market.
- In a recent Nikkei interview with ASML, the Dutch company says that the global chip supply chain is practically impossible to decouple. Manufacturers still have to do some decoupling or reorganization, it is going to cost money, and it is going to impact pricing, pushing it further down as suppliers vie to get new lines up and running quickly.
AUO has, apparently, decided to push into MicroLED development because it has done the math on OLED and realized that it has to reposition its own priorities. If that is really the case then, that should tell you enough about pricing pressures on OLED panels; unless you have deep pockets you are not going to be able to justify the increased investment in new OLED manufacturing capabilities and fighting established players on price.
The one bright spot: volumes keep going up, material volumes keep going up, and so do materials prices. At least for the short-term.
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The Market Research on OLED Panel Shipments and Revenues
According to DSCC’s latest OLED Shipment Report, OLED panel revenues are predicted to decline by 7% year-over-year in 2023, amounting to $38.9 billion, despite a 1% increase in shipments.
In the smartphone segment, OLED smartphone units are projected to grow by 4% year-over-year. However, revenues are anticipated to decline by 5% due to double-digit panel average selling price (ASP) declines, although there will be an increase in flexible and foldable OLED smartphones. OLED smartphones are expected to maintain their dominant position, accounting for 79% of both unit and revenue shares in 2023. OLED smartwatches, on the other hand, are anticipated to have a 14% unit share (down from 16% in 2022) and a 6% revenue share, consistent with 2022. By 2027, OLED smartphones’ revenue share is expected to decline to 55%, driven by the growth of OLED notebook PCs, AR/VR, and automotive applications.
OLED TVs are projected to experience a significant decline of 29% year-over-year in both unit shipments and revenues in 2023. The decline in OLED TV sales is likely attributed to market factors and other competitive display technologies.
In the OLED notebook PC segment, units are expected to decline by 15%, while revenues are predicted to decrease by 20% in 2023. This decline can be attributed to the ongoing macroeconomic environment, inventory corrections in the first half of the year, and lower blended ASP declines.
On the positive side, other OLED applications such as AR/VR, automotive, monitors, and tablets are expected to see unit and revenue growth in 2023.
DSCC has also raised its outlook for foldable smartphone shipments in 2023, projecting a 50% year-over-year increase to 19.3 million units. This increase is attributed to lower panel prices from Chinese OLED suppliers, resulting in reduced product prices and stronger demand. Several brands, including Motorola, Honor, and Tecno, are expected to follow suit with clamshell foldable smartphones at similar or even lower prices. Huawei is expected to show better-than-expected results due to strong commercial and government demand in China. Samsung also anticipates stronger results in 2023 with its Z Flip 5 and Z Fold 5 models compared to their previous iterations. While foldable smartphone shipments declined year-over-year in both Q4 2022 and Q1 2023, double-digit growth is expected from Q2 2023 through Q4 2023.
In terms of market share, Samsung’s brand share is projected to decline from 79% in 2022 to 60% in 2023, while Huawei is expected to remain in the second position with its share rising from 15% to 17.5%. Oppo is expected to secure the third spot, with Honor and Motorola completing the top five.
For the entire year of 2023, the Z Flip 5 model is expected to lead with over a 30% share, followed by the Z Fold 5 and Mate X3.
