Omdia: 2023 to bring first-ever flat panel display capacity drop

LONDON – Capacity used to manufacture OLED and LCD panels will decline in 2023 for the first time in the history of flat panel displays (FPDs), according to Omdia's recently released OLED and LCD Supply Demand and Equipment Tracker. Even though the 2023 decline is small, it is significant considering that FPD capacity expanded continuously at a compound annual growth rate (CAGR) of 22.6% between 2000 and 2022.

With the FPD industry continuing to suffer from excess capacity, panel makers are now accelerating the consolidation of under-utilized legacy factories, as well as delaying new factory ramp-ups, and pushing out future investment plans in order to reduce operating costs and conserve cash.

Slowing capacity growth can cause trouble for FPD supply chain companies that rely on new factory construction for business, but at the same time, it enables the industry to self-correct to a healthy balance between panel supply and demand with more stable pricing and profitability.

These modeled differential growth rates will start to reduce the supply glut this year and mainly return the market for large-size FPDs to supply-demand equilibrium in 2025.

The slowdown in capacity growth reflects the maturing of the FPD industry. Regardless, the industry remains vibrant with continuous diversification of display applications and technologies.

Even as older LCD facilities are repurposed or shuttered, many new advanced manufacturing facilities are actively being planned. China Star and Tianma will expand or invest in new highly flexible LCD facilities in 2024. Samsung Display, BOE, and LG Display are all likely to build Gen 8.7 OLED factories targeting IT applications within the next two years. Longer term, these same leading producers as well as AUO, Visionox, Vedanta, and various other companies are evaluating capacity expansion strategies that are in line with the evolving display market. In addition to LCDs and OLEDs, this will include increased investment in, and continuous adoption of alternative technologies such as electronic paper, micro LED, and OLED on silicon displays.

Read the full press release here

Omdia