The display technology industry has seen a significant expansion in the production of LCD panels with IGZO (indium gallium zinc oxide) thin-film transistor (TFT) backplane. WitsView, a division of TrendForce, estimates that the global production capacity of IGZO panels by area will reach about 6.9 million square meters this year, up 45% from 2015. A Gen-8.5 fab owned by major Chinese panel supplier CEC-Panda is currently responsible for much of this capacity expansion.
Apple is the first electronics device maker to adopt IGZO, using this type of panel for iPads in 2011 and 2012. While Apple has helped generated a wave of interests for this technology in the display market, the growth of IGZO products have been constrained by a host of issues. Getting related patents have been difficult, and there are still technological and yield-rate barriers to overcome. The spiraling price competition in different application markets are also compressing the overall market share of IGZO panels.
“Not only are IGZO products unable to establish a larger presence in the mid- and large-size panel markets, they are also having difficulty competing with the more mature LTPS technology in the small-size segment,” said Boyce Fan, senior research manager at WitsView. “Right now, Apple is the only major source of demand.”
Foxconn’s acquisition of Sharp has again put IGZO under the spotlight. Foxconn is currently considering increasing its investments in the technology and expanding its scale of adoption. Fan pointed out that the future success of IGZO panels in the display market will still hinge on Apple. There will be a rising, constant demand in the IGZO market if the U.S. electronics giant uses the technology for other product lines in addition to iPads. Suppliers in turn will be able to allocate their capacities for IGZO panels with some certainty and expand their production later on.
AMOLED has been getting increasing attention from panel suppliers competing in the smartphone display market. LTPS is now the dominant backplane technology for smartphone AMOLED panels. However, IGZO has lower current leakage rate than LTPS and thus consumes less power. With this advantage, IGZO has an opportunity to challenge LTPS in the potential AMOLED smartphone panel market.
Dominant suppliers in Apple’s IGZO display chain have gradually emerged with Sharp controlling 33% of the global capacity this year
Sharp has long been the main supplier of IGZO panels to Apple and already reached a high level of maturity in terms of manufacturing. WitsView estimates that Sharp will account for 33% of the global IGZO panel capacity area this year. LG Display (LGD) and Samsung Display (SDC) are also increasing their IGZO panel production in response to the iPad demand and possibility of Apple using the technology in other product lines. Together, the South Korean panel makers will constitute 28% of the global IGZO capacity this year. In sum, Sharp, LGD and SDC are expected to become the dominant IGZO panel suppliers in Apple’s supply chain.
Taiwan-based panel makers are more conservative in their investments of IGZO panel manufacturing as they lack orders from Apple. China’s CEC-Panda, on the other hand, has made huge investments in the technology because it has received the know-how and support from Sharp. The Chinese supplier’s Gen 8.5 fab in particular has added a considerable amount of capacity for IGZO panels of all sizes. According to WitsView, CEC-Panda’s share of the global IGZO panel capacity will come to 39%, making the company the largest IGZO panel supplier outside of Apple’s supply chain.