LTPS Panel Market to Face Oversupply in 2017 When Global Capacity Expands by 31.6% Annually, Says TrendForce

WitsView, a division of TrendForce, anticipates growing oversupply of LTPS LCD panels. Worldwide LTPS panel capacity expansion for this year is slower than initially expected as several new fabs have delayed mass production until after this year’s fourth quarter. However, this delay will also lead to an annual increase of 31.6% for next year’s total LTPS panel capacity. The oversupply situation will also get worse with the gradual adoption of AMOLED panels among mid-range and high-end smartphones.

“The rapidly rising demand for AMOLED panels has become a serious challenge to the dominance of LTPS LCD in the high-end smartphone display market,” said Boyce Fan, senior research manager of WitsView. “As investments in LTPS panel production have peaked, some panel makers are even changing their plans for the next few years, from achieving their targets for LTPS panel capacity to advancing straight to AMOLED panel production. Hence, the expansion momentum of LTPS panel capacity will slow down in 2018.”

Fan added that panel makers specializing in high-end LTPS panels such as Japan Display (JDI), Sharp and LG Display (LGD) now feel threatened by Samsung Display (SDC), the leading supplier of small-size AMOLED panels. “SDC is aggressively courting Chinese smartphone brands and raising the market visibility of AMOLED,” said Fan. “Furthermore, Apple plans to use the technology starting next year. For the LTPS panel market, the emerging oversupply problem will be made worse with new fabs entering mass production after the fourth quarter. The market situation will become even more distressing when Apple replaces LTPS panels on its devices with AMOLED panels.”

FHD resolution panels may face another price war; prices of mid-range and low-end smartphone panels are also expected to drop

Prices of FHD resolution panels were on a downtrend during the first half of 2016 as the smartphone panel market had anticipated a massive increase in the LTPS panel capacity. “Currently, prices have stabilized for FHD resolution panels,” Fan pointed out. “The market has reached a temporary equilibrium as new fabs have delayed mass production of LTPS panels and new smartphone releases in the year’s second half are driving demand.”

“Newly added LTPS panel capacity will begin supplying the market after this year’s fourth quarter,” said Fan. “Therefore, the oversupply pressure will again increase and WitsView expects a new round of price slashing for FHD resolution panels in 2017.”

Additionally, prices of mid-range and low-end smartphone panels have kept rising through this year. For 5-inch HD Cell panels, their quotes have already exceeded US$3 in this year’s third quarter, and their price gap with FHD resolution panels sized 5.5 inches is gradually contracting. The price increase for HD resolution panels will taper when smartphone brands finished their stock-up activities.

Once the new panel fabs begin mass producing LTPS panels, WitsView expects the oversupply pressure to again push down prices of FHD products in the smartphone display market. The same pressure may also adversely affect prices of panels for HD smartphone displays. On the whole, the smartphone panel market has enjoyed booming demand this year, but price corrections will come in 2017.