According to the latest investigations by the WitsView research division of TrendForce, the spread of the COVID-19 pandemic has diminished the global production of smartphones and also affected the market shares of different display panel technologies used in smartphones. As smartphone brands are proactive in adopting AMOLED panels for their phones, the penetration rate of AMOLED phones in the overall smartphone market is still projected to increase from 31.0% in 2019 to 35.6% in 2020. On the other hand, the penetration rate of TFT-LCD phones (including those with LTPS or a-Si panels) is projected to undergo a yearly decrease.
The growing influence of Chinese panel manufacturers will likely result in China occupying 35% of global AMOLED production capacity in 2020
TrendForce Research Director Boyce Fan indicates that most smartphone brands are implementing AMOLED panels for their flagship models in 2020. Case in point, all of Apple’s new phones to be released in 2H20 are expected to adopt AMOLED panels. Therefore, although the current forecasted 35.6% penetration rate of AMOLED smartphones is lower than the pre-pandemic forecast of 37.7%, it still exceeds the 31.0% penetration rate seen in 2019. Furthermore, newly added production capacity of AMOLED panels is expected to continue increasing, in particular the production capacity of Chinese panel manufacturers, which are expected to account for 35% of global AMOLED panel capacity by area in 2020, a significant increase from 26% in 2019. Chinese panel manufacturers will likely look to increase their capacity utilization and yield rates in order to grow their influences and become part of major smartphone brands’ supply chains.
For the past two years, the industry has seen a slowdown in the expansion of LTPS panel capacity, accompanied by a corresponding stabilization of panel supply. Because of their hypercompetitive prices, narrow borders, and low power consumption, LTPS panels have gradually become the mainstream choice for smartphone displays, thus forcing a-Si panels into the entry-level market. However, the surge of AMOLED panel supply is already starting to erode the shares of LTPS panels in the mid-range and high-end smartphone markets. In addition, as the pandemic’s impact on the smartphone market is gradually manifesting, smartphone brands are leaning towards lengthening the shelf time of older models or even increasing the number of entry-level phones, in turn damaging the presence of LTPS phones in the mid-range segment. The market share of LTPS phones is expected to fall from 40.2% in 2019 to 37.8% in 2020, but the magnitude of this decrease somewhat surpasses the expected drop for a-Si phones, which are projected to see a decrease in market share from 28.8% in 2019 to 26.6% in 2020.
The presence of AMOLED phones in the smartphone market will continue to expand in the long run, with AMOLED phones eventually becoming the mainstream while crowding out the shares of TFT-LCD (including LTPS and a-Si) phones. That means LTPS panel manufacturers, whose production capacity primarily focused on smartphones, must look to other revenue drivers, including notebook computer panels, tablet panels, or automotive display panels, to maintain their capacity utilization rates.