Demand for LCDs by area rises 13 percent annually

LCD unit shipments are declining, but there’s greater demand for larger screens.

Screens are big business and they're getting bigger, literally. An IHS report projects LCD glass area requirement will see a CAGR of 13 percent between 2015 and 2018. This is in spite of the fact that unit demand for LCDs is expected to fall in 2016. Screens are getting larger across the board, including for TVs, monitors and mobile PCs. The average size of LCD panels in TVs is expected to increase to 40.8in this year, up from 39.3in in 2015.

Larger screens can be good for the LCD market, in which prices and profits have been eroded thanks to steep competition from China. With unit sales in a downturn, bigger screens can buttress revenue. The decrease in profits is also resulting in pressure from panel makers for vendors to bring down costs, according to IHS. Glass substrate thickness has already been reduced from 0.7mm to 0.5mm, with panel makers already pushing to get to 0.4mm. Samsung Display is leading in these efforts as the company is also in the important OLED market.

Screens are such big business that Foxconn recently purchased Sharp. The former wanted the LCD capacity because it has been lagging in that area. The acquisition would also put Foxconn in a better position with Apple, its biggest customer. Apple is expected to eventually shift iPhones to OLED displays, so Foxconn plans on investing $1.85 billion in a new OLED panel fab. When Apple initially switches to OLED, Samsung Display will be its only viable option at that volume. Foxconn's efforts then could eventually help Apple to stop lining the pockets of one of its biggest competitors. The latter currently uses LCDs from Japan Display, LG Display and Sharp.

The OLED future remains a ways off, though. OLED TVs are especially expensive, helping the boom in high-end LCD TVs. These include ultrahigh resolution 4K TVs and, of course, larger TVs. Those are the sectors that will boost revenue for LCD makers in the near future.

See a comparison table of selected TFT-LCD module suppliers on GlobalSources.com