The display industry is taking a major hit from the coronavirus crisis and expects year-to-year declines in many display types and applications, according to a report from Display Supply Chain Consultants (DSCC).
More specifically, the firm foresees a substantial downturn in the first two quarters of the year, with a gradual recovery in the second half. The firm warned that should the crisis become more severe, the impact could extend into the second half of 2020 and possibly into 2021.
The display industry took an early downturn in the coronavirus crisis when many display fabs in China shut down or scaled back production as health concerns arose. With the coronavirus crisis in China easing, display manufacturers have slowly ramped production back up, only to see demand tumble as global demand has softened.
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One area taking a hard hit is the flat-panel TV market, as consumers drastically scale back purchases of discretionary goods.
Originally, DSCC projected first quarter unit shipments of TVs to show a quarterly decline of 26%. Now, based on the reduced demand in China, the U.S., Europe and worldwide, DSCC now expect that Q1 volume will show a 38% quarter-to-quarter decline, and volumes will decline another 4% quarter-to-quarter in Q2 before starting to recover in Q3.
For the full 2020 year, DSCC now expects a 9% decline in flat-panel TV shipments to 236 million, with a 10% decline in LCD TVs to 232 million. OLED TVs are the lone bright spot as the technology continues ramping up, with a 27% increase in OLED TV volume to 3.8 million.
Phone handsets were originally projected to show a 2.7%-unit increase, based on replacement demand stimulated by new 5G products. Now, the firm projects a 10% decline in handset volume, from 1.84 billion in 2019 to 1.66 billion in 2020. The numbers could take a further hit if Apple delays its new smartphone launch in September, DSCC noted.
The coronavirus situation has brought the automotive sector to almost a screeching halt, and that situation is reflected in DSCC’s revised projections for automotive displays. Whereas the firm originally projected automotive displays to exhibit a 6% year-over-year increase, it now expects automotive to show 12% year-over-year decline to 128 million units.
DSCC also expects monitor and notebook demand to decline by 7% each, and tablet demand to decline by 15%.
Prior to COVID-19, DSCC projected a 2% increase in display revenue year-over-year, but the firm now expects revenue to fall 7% in all applications except smartphones, where revenue will be flat at $44.2 billion. OLED display revenues will rise 21% from $28 billion to $33.7 billion, though the revised 2020 estimate is down from the prior forecast of $34.3 billion. LCDs, originally expected to decline 5% from $82 billion to $78 billion, are now expected to fall 17% year-over-year to $68 billion.