smart phone display market outlook© 2016 ihs markit. all rights reserved. smart phone display...

© 2016 IHS Markit. All Rights Reserved. © 2016 IHS Markit. All Rights Reserved.

Smart phone display market outlook 2016 November - Korea Display Conference

Brian Huh, Senior analyst of S&M display

Research, IHS Markit Technology

© 2016 IHS Markit. All Rights Reserved.

Smart phone SET outlook

Entered phase of stagnation

2


Q2’16 Smartphone market recorded 328M, negative growth of Y/Y. Entered phase of stagnation

3

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

0

50

100

150

200

250

300

350

400

Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16

Million

of

un

it

Shipment Q/Q Y/Y

Smartphone set shipment trend


However, China OEMs continued to eat market share bit by bit.

4

0%

5%

10%

15%

20%

25%

30%

35%

Samsung

Apple

Huawei

Oppo

BBK Vivo

Xiaomi

LG

ZTE

TCL-Alcatel

Lenovo

Smartphone set shipment trend by OEMs

No. OEM Q2'15 Q1'16 Q2'16 Q/Q Y/Y Rank

1 Samsung 73 79.4 77.5 -2% 6% -

2 Apple 47.5 51.2 40.4 -21% -15% -

3 Huawei 30.6 28.4 33.3 17% 9% -

4 Oppo 10.8 16.8 21.9 30% 103% -

5 Vivo 11.2 14.4 16.4 14% 46% 1 up

6 Xiaomi 19.7 14.8 15.2 3% -23% 1 down

7 LG 14.2 12.6 13.9 10% -2% -

8 ZTE 15.1 11.9 13.7 15% -9% -

9 TCL-Alcatel

10.1 7.8 7.4 -5% -27% -

10 Motorola 5.9 5.8 6.2 7% 5% -


Global Handset market is slowing down and the growth comes from emerging regions

0

100

200

300

400

500

600

2014 2015 2016 2017 2018 2019 2020

Million

of

un

it

$30-$90 $90-$150

$150-$250 $250-$400

$400+

2014 2015 2016 2017 2018 2019 2020

N America L America

EMEA China

Rest of APAC

5

Smartphone set forecast by ASPs


Smartphone DISPLAY outlook

AMOLED becoming the main stream !!

6


Smartphone panel shipment trend: Japan Market seems to be stagnant, but continued to lead the LTPS LCD market.

0

100

200

300

400

500

600

2014 2015 2016(F)

Million

of

un

it

a-Si LCD LTPS LCD

Oxide LCD

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 1H'16

Apple Huawei Xiaomi

Sony LG Others

7

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 1H'16

Apple Huawei Sharp

Xiaomi ZTE Others


Smartphone panel shipment trend: Korea Shipments continued to increased due to AMOLED.

0

100

200

300

400

500

600

2014 2015 2016(F)

Million

of

un

it

AMOLED a-Si LCD

LTPS LCD

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 1H'16

Samsung OPPO VIVO

Huawei Gionee Others

8

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 1H'16

Apple LG Huawei

Xiaomi Microsoft Others


Smartphone panel shipment trend: China Leading the market based on shipments, catch up high-end product rapidly.

0

100

200

300

400

500

600

2014 2015 2016(F)

Million

of

un

it

AMOLED CSTNMSTN a-Si LCDLTPS LCD Oxide LCD

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 1H'16

Samsung Huawei Xiaomi

VIVO Lenovo Others

9

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 1H'16

Huawei VIVO OPPO

Xiaomi Gionee Others


Smartphone panel shipment trend: Taiwan Shipments continued to decreased, furthermore weak local set OEMs

0

100

200

300

400

500

600

2014 2015 2016(F)

Million

of

un

it

AMOLEDPMOLEDa-Si LCD

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 2016

Sony Huawei Xiaomi

Samsung HTC Others

10

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015 2016Huawei Lenovo

Sony Microsoft

Black Berry Others


a-Si LCD ASPs rebounded to upward in Q2’16

3.2 3.15 3.2 3.3 3.3 3.28 3.6 3.7

4

4.8 4.85 5.4 4.05 4.03 4.08 4.1 4.1 4.08 4.2 4.3

4.6

5.4 5.5

6.4

7.8 7.5 7.4 7.4 7.4 7.4 7.4 7.4

7.9 8.5 8.7

9

2

4

6

8

10

0

20

40

60

80

100

Oct'15 Nov'15 Dec'15 Jan'16 Feb'16 Mar'16 Apr'16 May'16 Jun'16 Jul'16 Aug'16 Sep'16

US

D

Million

of

un

it

A-si shipment 4" WVGA TN 4.5" FWVGA TN 5" HD IPS

11

Remained panel supply tightness, trigger effect from TV, & IT, low profitability

44 42 40 39 36 36 36 37 38 39 42 44

63 59 56 53 52 52 53 55 57 60 70 75

115 107 100 94 89 89 90 90 91 94 103 115 40” FHD O.C

32” HD O.C

23.6” HD O.C

Taiwan earthquake 22% up

57% up

65% up


Smartphone display shifted from a-Si to LTPS Requirement for multimedia push to increase demand for over FHD resolution, and small & old fab losing the competitiveness.

0

20,000

40,000

60,000

80,000

100,000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

00

0 m

2

AMOLED

LTPS/Oxide

a-Si

12

No Maker Location Tech Gen Capacity (K/M)

End

1 AUO Hsinchu L3C a-Si 3.25 45 Q2'17

2 AUO Lungtan L4A a-Si 3.5 60 Q3'17

3 AUO Linkou L5D a-Si 5 75 Q1'18

4 BOE Beijing B1 a-Si 5 45 Q4'17

5 CPT Taoyuan T2 a-Si 3.5 73 Q4'18

6 Innolux Tainan Fab1 a-Si 3.25 60 Q2'17

7 Innolux Tainan Fab2 a-Si 3.5 85 Q2'18

8 Innolux Tainan Fab3 a-Si 5 65 Q2'18

9 Innolux Jhunan T0 a-Si 4 20 Q1'18

10 Innolux Jhunan T1 a-Si 5 33 Q4'18

11 JDI Mobara V3 a-Si 4 58 Q4'16

12 LGD Kumi P2 a-Si 3.25 17 Q1'17

13 LGD Kumi P3 a-Si 3.5 92 Q1'17

14 LGD Kumi P4 a-Si 5 130 Q3'17

15 LGD Kumi P6 a-Si 6 60 Q4'17

16 SDC Chonan L6 a-Si 5 125 Q1'17

17 Sharp Taki No2C a-Si 3.5 45 Q3'18

18 Sharp Taki No2D a-Si 3.5 53 Q3'18

19 Truly Shanwei 1 a-Si 2 30 Q3'18

Fab closing plan (2016 ~ 18) Supply capacity forecast (≤Gen6)


A-Si LCDs in Gen 8

13

Panel makers considering a-Si LCDs in Gen 8 to compete LTPS LCD and AMOLED, and will be ready for MP in 2017

2200

2500

Gen 5

Gen 5 Gen 5

Touch controller LCD driver IC

TDDI

FPC

In-cell

• High PPI product for a-Si • High brightness • Better outdoor readability

• Slim thickness • Simple value chain • Cost down

TDDI

SPR (Sub Pixel Rendering)

RGBG M+ Pentile

Cuts/glass Gen 6 Gen 8

5” HD 330up 650~680up

5.5” HD 264up 550~580up


New LTPS LCD fabs will be released in 2017 Strong demand for FHD+, LCD panel makers invested LTPS fab, but decreasing demand for apple will impact the LTPS fab operation in 2017

14

0

100

200

300

400

500

600

700

2014 2015 2016 2017 2018 2019 2020

Million

of

un

it

>600

500-600

400-500

300-400

＞300

New LTPS LCD Fab

Maker Factory Gen panel Capacity (K/M)

MP Ramp

AUO Kunshan 6 LCD 25 Q4'16

BOE Ordos B6 5.5 LCD/AMOLED 30 Q1'17

CSOT Wuhan T3 6 LCD/AMOLED 15 Q2'17

Tianma Xiamen 2 6 LCD 15 Q4'16

JDI Hakusan

D3 6 LCD 25 Q4'16

LGD Kumi AP3 6 LCD/AMOLED 8 Q2'16

LTPS LCD shipment forecast

Area (KM2) 2016 vs 2018

Supply 38% up at least

demand 18% up at best


AMOLED shipment continued to increased, especially strong demand for mobile phone

15

2014 2015 2016

Others 0.0 0.0 0.0

Smart Watch 2.8 18.6 17.2

OLED TV 0.2 0.4 0.9

Near Eye 1.6 1.6 4.1

Mobile Phone 173.9 257.1 384.5

Mobile PC 4.3 5.3 3.6

DSC 1.5 0.7 0.2

0

50

100

150

200

250

300

350

400

450

Million

of

un

it

AMOLED panels shipment trend by application


Samsung increased AMOLED smartphone ratio remarkably to mid-end lineups

16

46%

46%

84%

0% 50% 100%

H1'14

H1'15

H1'16

AMOLED TFT-LCD

0% 50% 100%

Galaxy A series

Galaxy Ace

Galaxy Core

Galaxy E

Galaxy Grand

Galaxy J

Galaxy Note

Galaxy S

Others55%

36%

26%

Samsung mobile’s product strategy trend

Galaxy J series


Cost simulation for LTPS LCD vs rigid AMOLED Cost of mobile AMOLEDs have recently reached parity with LCDs. Furthermore, AMOLED have more room to enhance cost reduction than LCDs.

64%

31%

6%

20%

9%

13%

14%

31%

7% 5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

5.0 LTPS LCD 5.0 AMOLED

Indirect

expense

Depreciation

personnel

Panel material

cost

Modue

material cost

17

0

2

4

6

8

10

12

14

16

Q4'15 Q1'16 Q2'16 Q3'16

5.0 LTPS LCD

(Gen 6)

5.0 AMOLED

(Gen 5.5)

Note: Utilization: 90% / Cuts: 330up@G6, [email protected] / 5% cum yield gab

Cost comparison between LTPS LCD vs AMOLED

10% price gap


Smartphone display market forecast by technology AMOLED demand is soaring and will surpass LTPS TFT LCD in 2018

1,468 1,548 1,606 1,713

1,818 1,876 1,929

0%

5%

10%

15%

20%

25%

30%

35%

40%

-

500

1,000

1,500

2,000

2,500

2014 2015 2016 2017 2018 2019 2020

Million

of

un

it

Shipment TFT LCD /LTPS (%) AMOLED share (%)

18


APPLE’s new challenge, AMOLED iPhone in 2017.

19

Flexible AMOLED fab will be ready for MP from Q2’17, and one model is expected to adopt flexible AMOLED.

3.5” 4.0” 4.7”/5.5”” Flexible AMOLED

0

20

40

60

80

100

120

Q1'0

8

Q2'0

8

Q3'0

8

Q4'0

8

Q1'0

9

Q2'0

9

Q3'0

9

Q4'0

9

Q1'1

0

Q2'1

0

Q3'1

0

Q4'1

0

Q1'1

1

Q2'1

1

Q3'1

1

Q4'1

1

Q1'1

2

Q2'1

2

Q3'1

2

Q4'1

2

Q1'1

3

Q2'1

3

Q3'1

3

Q4'1

3

Q1'1

4

Q2'1

4

Q3'1

4

Q4'1

4

Q1'1

5

Q2'1

5

Q3'1

5

Q4'1

5

Q1'1

6

Q2'1

6

Q3'1

6

Q4'1

6

Q1'1

7

Q2'1

7

Q3'1

7

Q4'1

7

Million

of

un

it

iPhone 3G

iPhone 6S/6SP

iPhone 6/6P

iPhone 4

iPhone 4S

iPhone 5S/5C

iPhone 3GS

iPhone 5

25M

25M

100M/Q ?? 25M


Demand for AMOLED smartphone keep growing In 2020, AMOLED displays will reach 700M, flexible AMOLEDs market will surpass rigid AMOLED market.

0

50

100

150

200

250

300

350

400

2015 2016 2017 2018 2019 2020

Flexible Rigid

20

0%

10%

20%

30%

40%

50%

60%

0

100

200

300

400

500

600

700

800

2015 2016 2017 2018 2019 2020

AMOLED Smart phone Y/Y (%)

Apple


OLED fab forecast: Korea

21

Huge and fastest investment than others. Strong customer base, leading technology.

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

00

0 m

2

SDC

LGD

Likelihood>=30%

Maker Factory Gen Capacity (K/M)

LGD AP2-E2 G4 26

AP3-E5 G6 15

P10 G6 45

P9-E6 G6 45

SDC A3 G6 120

A4 G6 45

A1 G4 55

A2 G5.5 180


OLED fab forecast: China

22

Fast following Korea panel makers, but need more time.

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

00

0 m

2

Visionox

Truly

Tianma

EDO

China Star

BOE

Likelihood>=30%


BOE B7 G6 45

B11 G6 45

China Star T4 G6 60

EDO Shanghai G4 22

Shanghai G6 30

Tianma Shanghai G5.5 6

Wuhan G6 30

Truly Huizhoi G4 15

Visionox Kunshan G5.5 15

Guan G6 30

How fast to catch up the technology

How fast to narrow the cost gap

How to catch up volume based business


OLED fab forecast: Japan

23

More conservative, different stance of JDI and Sharp-Foxconn.

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

00

0 m

2

Sony Semiconductor

SK Display

Sharp

JDI

Likelihood>=30%


JDI Mobara G6 30 (??)

Sharp Sakai G6 30


OLED fab forecast: Taiwan

24

No new OLED fab investment yet. Focusing on a-Si LCD ??

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

00

0 m

2

AUO

Likelihood>=30%


AUO L4B G4 15


OLED fab forecast: over all

25

Korea will keep leading market dominance, but have to consider over supply!!

119 166

243 294

379

541

792

1088

0

200

400

600

800

1000

1200

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

00

0 m

2

Korea

China

Japan

Taiwan

Q'ty estimation based on 5.5" (M)

Estimation: Likelihood>=30%, cum yield 75%, utilization 95%, glass efficiency 96%


Galaxy note 7 effect

26

Samsung Display trying to minimize the impact on Note 7, but it will be a challenge to recover.

Aug. 2nd introduced

Aug.24th

1’st battery explosion

Sep.2nd

announced Recall

Sep.19th

started to replace to new note 7

Oct.10th Stop !

6

11 13

16

0

3

6

9

12

15

18

Q1'16 Q2'16 Q3'16 Q4'16

Million

of

un

it

Flexible ??

Reduce inventory to others

Replace order to Galaxy S7 edge

Advance Galaxy S8 production

Develop new model

smart phone display market outlook© 2016 ihs markit. all rights reserved. smart phone display...

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