TrendForce Expects Growth in AMOLED Panel Capacity This Year as Suppliers Focus on This Technology to Meet the Demand for Flexible Displays

Brand companies in the global smartphone market have stepped up their search for novel designs and higher hardware specs to better compete in the slow-growth environment. One of the high-end components that have attracted brand companies’ attention is AMOLED panel for smartphone displays. In addition to being very thin and light, AMOLED panels are flexible enough to accommodate innovative designs as well as offering high color saturation. WitsView, a division of TrendForce, estimates that the global AMOLED panel production capacity by area will reach 7.9 million square meters in 2016, representing a 19.1% year-on-year increase. As panel makers worldwide continue to expand their AMOLED production, the total capacity for 2018 is forecast at 14.7 million square meters.

Currently, Samsung Display Corp. (SDC) is the world’s largest supplier of AMOLED panels. WitsView Senior Research Manager Boyce Fan said that SDC previously produced AMOLED panels to satisfy the demand from the Samsung brand group. However, SDC’s capacity outstripped Samsung’s demand in 2015. As a result, SDC increased its sales of AMOLED panels to other smartphone brands, especially the rising Chinese vendors. External customers accounted for 20% of SDC’s total AMOLED sales in 2015 owing to the supplier’s competitive pricing and rising market acceptance. 

The AMOLED market is also watching closely at the developmental direction of Apple’s products. “Many panel makers have started to focus on their AMOLED panel production because there is an increasing likelihood of Apple adopting this technology for its next iPhone,” noted Fan. “Also, an AMOLED panel requires an LTPS backplane. The panel industry has rapidly built up its LTPS capacity in the past few years, leading to the risk of oversupply. Hence, developing the AMOLED market creates new opportunities for the panel makers and can help consume excess LTPS capacity.”

For a long time, the global AMOLED production has been concentrated in South Korea. SDC is the leading manufacturer of AMOLED panels for small- and medium-size devices, while LG Display (LGD), which has focused on applying this technology to TVs, is the top supplier of large-size AMOLED panels. However, WitsView believes the new entrants to the market will be able to gradually catch up to the established suppliers. The South Korean panel makers will see their representation in the global AMOLED capacity fall from 95% in 2015 to 76% in 2018. Chinese panel makers, which have substantial capital advantage, will be able to expand their control of the total capacity from 4% to 19% during the same period.

Fan added: “Rigid, flat AMOLED panels have been around the market for a while, and they are not much different from the current TFT-LCD panels in terms of appearance. Most panel makers are therefore betting on flexible AMOLED panels as they expect greater potential demand for this technology. The share of AMOLED capacity used to make flexible panels is projected to rise sharply as suppliers concentrate on developing these products – from just 13% this year to 44% in 2018.”