Rebounding LCD Market
The flat panel display (FPD) market, which shrank by 15 trillion won this year due to a global recession and a decline in TV demand, is expected to rebound sharply beginning next year on the strength of rising panel prices.
According to related industries on November 27, the flat panel LCD market, which had been hit by the aftermaths of a glut until the first half of this year, is expected to enter a boom in three years beginning next year amid rising panel prices in the second half of this year.
IHS, a market research firm, forecast that the global flat panel LCD market this year will be estimated at US$100.8 billion. This figure is a decrease of 11 percent compared to US$113.7 billion in 2015 following US$119.7 billion in 2014. The flat panel LCD market this year suffered a serious oversupply in the first half of the year due to an economic downturn, surpassing an oversupply rate of 20 percent.
However, the market is showing a sign of a boom as TV demand is recovering in the second half of the year. As a result, IHS expects the flat panel market to reach US$110.2 billion next year, up 10 percent from this year. The market is expected to continue to grow to 2018 (US$111.7 billion), 2019 (US$114.7 billion) and 2020 (US$ 116.9 billion) for the next four years.
Flat panel production investment is already expanding. According to IHS, flat panel equipment investment this year stood at US$ 12.9 billion, up 89 percent from last year. Facility investments are expected to rise to US$ 13 billion next year and then subside in 2018.
The revival of the flat panel market is led by China rather than Korea, which is the world's number one. In China, two leading Chinese panel makers, BOE and China Star, are investing in 10th generation lines which produce 60-inch or larger panels as well as eight generation lines suitable for 50-inch or larger panels.
On the other hand, Korea which has led the flat panel market for nearly ten years is betting on a strategy of focusing on organic light emitting diodes (OLEDs).
Samsung Display reportedly decided to close part of its Tangjeong L7 line, which produces 40-inch LCD TV panels, and to switch to an OLED line recently. Samsung Display closed its superannuated fifth generation LCD line last year.
LG Display plans to focus on OLEDs in large- and small-sized panels, and has no plan to invest in new LCDs.
“With the current trend going, China will dominate the flat panel LCD panel market beginning in the second half of next year, when eighth generation LCD lines such as those of the BOE start to roll out panels in large quantities,” an industry observer said. “Korea which lost the flat LCD panel market to China will be able to survive by dramatically expanding its OLED business, thereby further widening its gap with China within the next three to four years.”