What Display Daily thinks: It is never easy to predict the future because most people cannot accurately predict what will happen in the next hour let alone the next five years. I do know, however, that if you are constipated, you will be uncomfortable for as long as it lasts. That’s an accurate prediction.
Investment in FMM equipment for IT OLED display manufacturing is a constipation point. It assumes that there is a bigger market for premium OLED IT displays than can be justified with common sense.
If, as expected, there is a big upgrade cycle in the enterprise because of Microsoft and AI it will mean money goes into upgrading core software infrastructure and meeting the specs to drive any new OS and features. You can’t lose the cost of a premium display in that equation.
What is preferable to this approach is a fabless display industry. We have the same handful of companies ramping up with the same capabilities on the same processes to deliver to the same market. The market is so lacking in clear definition other than the expectation that the next gen tech for a display is what is needed for the next gen tech in operating systems.
That’s called false equivalency. I don’t see the upside in actual P&L terms for all this investment. At least not in the timeframes that seem to be implied. And, sadly for me, this could push back MicroLED adoption by another year or two because we can’t have a next gen while the previous next gen is still next gen-ing. Sad for me because I want MicroLED adoption sooner rather than later. I am a firm believer in opening up the display industry and getting as far away from the old “glass” mindset as fast as possible.
Why? Because capital expenditures shouldn’t be getting in the way of forward motion, they should be aiding and abetting it. That’s not what is happening here. That makes it really easy to be phlegmatic about the OLED IT products opportunity.
FPD Equipment Market Forecast to Surge in 2024, Stabilizes in Following Years
Omdia’s latest OLED and LCD Supply Demand and Equipment Tracker predicts a robust rebound in the flat panel display (FPD) equipment market, with revenues expected to surge by 154% to $7.7 billion in 2024. This growth is attributed to leading OLED panel manufacturers establishing Generation 8.6 fine metal mask (FMM) based OLED factories. The market is anticipated to stabilize in 2025 and 2026, reflecting the significant investments and technological advancements in the industry.
The substantial increase in FPD equipment market revenues is driven by the advanced and complex manufacturing technology required to fabricate OLED panels using the FMM patterning approach on large Gen 8.6 substrates. This technology, crucial for producing panels for notebook and tablet applications, entails high equipment costs despite the addition of a relatively small amount of new capacity. Samsung’s A6 factory, with a capacity of 15,000 substrates per month, represents the largest single investment in 2024, accounting for 32% of all FPD equipment spending.
Other notable investments in 2024 include the expansion of China Star’s T9 phase 2, Tianma’s TM19, and BOE’s B20 factories. Furthermore, BOE’s announcement of its G8.6 FMM OLED factory, B16, marks a significant development in the industry. Scheduled to start equipment installation for its first phase of 16,000 substrates per month in 2025, B16’s equipment costs are projected to be 18% higher than those of Samsung’s A6 factory. The B16 factory will utilize a more equipment-intensive low-temperature poly oxide (LTPO) array process, capable of producing fully flexible displays and including a broader range of module process equipment.
