Forecast: China to overtake Korea in OLED output
September 12, 2024
By Chris Forrester
Display Supply Chain Consultants (DSCC), in its latest quarterly TV and panel technology capacity outlook, suggests that China is expected to overtake South Korea by 2028.
DSCC expects display capacity to rise at a 1.4 percent CAGR from 2023 to 2028, with LCDs growing at just a 1 per cent CAGR and OLEDs growing at a 4.8 per cent CAGR. Both numbers are up slightly on the last quarter.
“We continue to see China gaining ground with their share of total display capacity rising from 68 per cent in 2023 to 74 per cent in 2028, growing at a 3 per cent CAGR. Japan, Korea and Taiwan are all expected to see their capacity shrink in absolute terms with India seeing some growth if a [fabrication plant] eventually comes online. Looking just at LCDs, we see China with a 76 per cent share in 2028, up from 70 per cent in 2023. In OLEDs, we now see China overtaking Korea in OLED capacity in 2028, growing at a 4x faster growth rate at an 8 per cent CAGR from 2023 to 2028 vs. Korea at a 2 per cent CAGR,” said DSCC.
Looking just at larger panel capacity, G7+ capacity is only expected to rise at a 2 per cent CAGR from 2023 to 2028. After at least 7 per cent growth annually from 2018 to 2022, capacity declined by 1 per cent in 2023 on fab delays and closures on weak market conditions. Some 3 per cent growth is expected in 2024 despite SDP’s closure followed by 1-3per cent growth from 2026-2028. Given the limited capacity growth, a surge in TV demand along with the continued increase in average size could result in a significant shortage. If China tried to stimulate TV demand through some sort of subsidy programme, this could become a reality, predicts DSCC. As demand approaches supply in the future and only Chinese and Taiwan suppliers making LCD TV panels, brands could be at a significant disadvantage resulting in a healthier environment for panel suppliers.
“In terms of display capacity share, we still see [China-based BOE Technology Grp] with a significant lead followed by China Star. The lead currently narrows from a 26 per cent share for BOE and a 17 per cent share for China Star in 2023 to 25 per cent for BOE and 18 per cent for China Star in 2028. Looking at LCD capacity share, it is a similar story with BOE’s advantage over China Star shrinking slightly from 28 per cent to 18 per cent in 2023 to 27 per cent to 20 per cent in 2028. However, if China Star ends up buying LGD’s LCD [fabrication plant] in China as expected, then China Star’s LCD capacity share surges to 23 per cent in 2025 and BOE’s advantage holds at just five points from 2025-2028 vs seven to eight points otherwise,” said DSCC.
“In the case of OLED capacity, it is a two-horse race between Samsung and LG Display with LGD holding a two-to-five-point advantage from 2023 to 2028,” concluded DSCC.