What They Say
In its blog (registration required), DSCC highlighted the difference in financial results between LCD and OLED makers, with an increasing ‘chasm’ between OLED-focused makers and those making LCDs. Q3 was the ‘worst quarter in years’ and perhaps the ‘worst ever’.
All FPD revenues were down 28% to $26.8 billion from last year and down 30% from the all time high of $38.2 billion in Q4 2021. However, both SDC and LGD were up in revenue by 15% and 14%, respectively, benefitting from the iPhone 14 launch.
BOE dropped from first place in revenues in Q2, after leading for five quarters, and SDC extended its lead in Q3.
The article looks at overall industry margins, which highlight the crystal cycle and are shown on a chart. Gross profits are also shown for each maker apart from SDC.
There’s an interesting chart, below, on gross margins by company that highlights SDC’s strong position. The article looks at estimated EBITDA which decreased for the industry by 72% Q/Q and by 86% Y/Y to $767M. A chart shows the result for those vendors where it can be calculated. The article also looks at inventory levels, which have now fallen back from the peak in Q2 after reductions in fab utilisation. They remain nearly $6 billion higher than two years ago, at just under $14 billion.
The article concludes that it will be a long road for LCD makers to get back to profitability.
What We Think
As was said earlier in the year, had the LCD makers not got caught up in the elation of the high demand and prices last year and had they ‘sat on their hands’ when planning capacity, things would not have been so bad this year. I can’t imagine that we will still have all today’s LCD makers in a few years. Sharp has also indicated that it will be looking at SDP. (Sharp to Restructure SDP). Samsung’s continuing ability to stay ahead of all of its rivals is amazing to see. I thought that the firm had just a few short years to take advantage of its better OLED capabilities, but it has managed to keep its edge much longer than I expected. Kudos to them! (BR)
