The often-cyclical market for display capital expenditures is in the midst of a downturn. According to market research firm Display Supply Chain Consultants, display capital expenditures for 2019 have been slashed 12% to $13.7 billion, due to a 15% reduction in LCD spending from cancellations at Infintech and Sharp SIO and downsizing at HKC H2. The LCD market is currently afflicted by excessive supply growth, poor fab utilization and the lack of profitability in LCD TV panels, DSCC reported.
The firm added that LCDs still accounted for 70% of total display capex, even with the promising mobile OLED sector also seeing issues with fab utilization. China accounted for 92% of spending and G10.5 fabs accounted for a 50% share of all spending. Bookings are expected to be up 2% for the year from $17.4 to $17.7 billion.
For 2020, DSCC reduced its forecasts vs. the previous quarter by 21% to $16.0 billion, due to downsizing and cancellations at HKC H4 and Sharp SIO and delays at BOE B17 and CSOT T7. LCD spending was reduced by 45% while OLED spending was increased by 3%. DSCC projects OLEDs to account for 65% of spending at $10.4 billion, with LCDs at 35% and $5.6 billion. Mobile spending will soar 335% to $6.9 billion, accounting for a 43% market share, as TV spending tumbles 25% to $9.1 billion and a 57% share.
According to DSCC, HKC and Visionox are expected to pace capex spending with a 17% share each, followed by China Star at 15% and BOE and Samsung at 14% each. China’s share of total display capex is expected to fall from 92% to 84%, while Korea’s rises from 5% to 16%.
The spending slowdown will also continue for 2021, with DSCC projecting a 7% spending reduction from its prior forecast of $9.8 billion, which is already down 39% year-to-year, as manufacturers continue to delay capex spending. Mobile will account for a majority of spending with a 56% share, its highest since 2018. BOE is expected to lead in spending with a 40% share, followed by China Star at 30%.
In 2022, capex delays from prior years will lead to a 6% increase vs. last quarter’s report and a 1% year-over-year increase to $9.9 billion, with OLEDs accounting for a 94% share. Mobile displays are expected to account for 63% of display capex. Samsung Display will lead spending with a 41% share, followed by BOE at 27% and LG Display at 12%.