The ongoing recovery in the global economy bodes well for the panel demand. Global GDP is forecast to grow 3.2 percent in 2018, following 3.1 percent in 2017. In particular, the economic recovery in North America and emerging markets, such as India, Brazil, and Russia, is expected to be stronger than the previous year.
Global demand for flat panel displays by area is forecast to grow 7.2 percent to 210 million square meters in 2018 compared to 2017. The rise in demand area is largely attributed to a fall in retail prices of applications along with a drop in panel prices, which is expected to spur consumers’ appetite for various display devices. The sharp fall in panel prices in the second half of 2017 should soon be reflected in the prices of consumer electronics goods in the upcoming peak shopping seasons later this year and in early 2018. The flat panel TV market is expected to see a significant rise in replacement demand.
As the global TV market continues to struggle with unit volume growth overall in 2017, attention has turned to the most profitable market segments. This includes larger screen sizes and advanced technologies like OLED, quantum dots, 4K and HDR, each of which helps boost average selling prices and profits.
OLED Versus QLED
OLED TV and QLED TV have been competing for years, but OLED TV is expected to retain its remarkable dominance in high-end TV market in 2018. More brands are expected to enter OLED TV market in 2018 with a growing field rate, and the shipments are expected to reach a new high of 2.5 million units, a significant increase from 1.5 million in 2017. Promotional efforts from major TV brands have raised shipments of OLED TVs above the expected level this year. In contrast, major QLED TV makers have experienced some issues of promoting QLED due to its high pricing.
Despite OLED’s lifespan problems TV brands are still interested in R&D of OLED, while the development of LCD is approaching a limit. QLED TV makers have been advocating its features of better color saturation and no lifespan problems; however, QD display has not yet met the commercial market standards.
Therefore, in the short term, QLED advocates will still use QD backlight products to compete with their rivals. The backlight system, a necessary component of TV, will make it thicker, which is less competitive than OLED. So the new generation of QLED TV will probably use glass light guide plate as a solution for thinner TV. In addition, pricing is also a big problem for QLED TV this year. With the promotional efforts by major TV makers OLED TV has become a representation of high-end TV in consumers’ perception in recent years. Such a high pricing of QLED TV may reduce the consumers’ purchase intention. QD CF and QD self-emitting displays, a new generation of display technologies, which QLED advocates are expecting, will not enter mass production until 2020, at the earliest.
Boost in Resolution with 4K, HDR, and 8K
The evolving nature of the consumer electronics industry, advancements in graphic engines of televisions, increased pressure on manufacturers to reduce prices, and popularity of the ultra-high definition technology and its advantages have fueled the demand for UHD televisions in the past few years. Customers are getting accustomed to using such contents. Moreover, increasing penetration of ultra-high-speed Internet, particularly in developed regions including metropolitan cities are expected to favorably impact the 4K UHD TVs market growth. The plummeting prices and the installation of 4K technology have triggered a shift in the consumers’ screen size preferences. 2018 will bring further exploration into other aspects of the technology, as 22.2 and object-based audio systems become more viable. The Asia-Pacific region is expected to dominate the market. The 46- to 55-inch display category is expected to dominate the market. Smaller screen sizes might not be able to represent the improvements in the picture quality delivered by the technology. The spending on next-generation large-screen televisions is expected to increase in regions such as the Middle East and Asia-Pacific.
High dynamic range (HDR) content will also become more ubiquitous. There will be several changes to file formats and delivery methods in 2018, due to the nature of 4K UHD deliverables and the size of the respective data sets. It is already a given that any large screen will be 4K UHD; now the battleground is in HDR. The industry has been hindered by complications around formats, but there are now workable paths for HDR, using HLG or PQ10.
While UHD TV set shipments steadily grow, some TV manufacturers are already preparing for the next-generation – the 8K TV standard. 8K TV sets are still years away from permeating the global market, with market hype currently centering on Japan’s plans to deliver 8K video at the 2020 Olympics. 8K TV sets will enter the market in small quantities in 2020 but mainly in Japan and possibly South Korea, areas in which broadcasters are now working toward 8K broadcast. In the meantime, it will be ultra HD HDR TV sets that dominate the overall market. It will be years before the sets hit mainstream consumers; in the interim, the 8K panels are finding a role in digital signage markets.
Appetite for Smart TV Grows
By 2018 penetration of smart TVs will achieve relative parity with streaming media players as platforms delivering apps to TVs. Smart TV assumes a leading position. Sales of smart TVs and continued growth in streaming video will contribute to the increase of installed Internet-connected TVs. The leading manufacturers are already setting themselves on crossroads, which maneuver the viewer through the individual functions of the television, in order not only to watch the programs, but also to retrieve videos, record, check emails, and use apps. Additionally, 4K mass market adoption plays an important role, as nearly all 4K TVs are Internet capable.
A consumer’s TV replacement cycle is usually about 10 years. A hike in replacement demand for the next few years is expected. The global flat panel market will also get a boost from higher demand for new and larger TVs ahead of the 2018 PyeongChang Winter Olympics scheduled in February and the 2018 FIFA World Cup in Russia in June. Panel sales in even years when major world sports events are held grow at a faster rate than in odd years. China will dominate flat panel display manufacturing by 2018, taking up 35 percent of the global market and it is expected to replace South Korea as the world’s largest flat-panel display producer in 2019.
Growth in demand for flat panel displays next year will be mainly driven by migration to large displays, declining panel prices, and high expectations for a recovery in the global economy. As Gen 10.5 fabs are due to start operation in the first half of 2018, supply of super large TV panels, including 65- and 75-inch products, is projected to grow. A rise in nonferrous metal prices, often a precursor to an economic recovery, is another positive sign.