Industry news

The production scale and shipments of AMOLED panels has increased significantly recently due to increasing adoption by smartphone vendors, narrowing down the production costs between AMOLED and TFT LCD smartphone panels, according to industry sources.

The production cost for a 5.5-inch HD AMOLED panel has drifted to US$12.10 recently compared to US$12.20 for a 5.5-inch HP LTPS LCD panel, according to IHS Markit.

Previously, production costs for AMOLED panels were much higher than those for LCD panels because of high depreciation rates for equipment and higher labor costs although the production structure of AMOLED panels is simpler as compared to that of LED parts.

However, the production of LCD screens still has advantages in the high-resolution segment, asserted the sources. It is estimated that the production cost for a 5.5-inch QHD LTPS LCD panels is still 30% cheaper than that for the same size of QHD AMOLED panels.

Overall, the penetration rate of AMOLED panels in the global smartphone space is likely to reach 50% in three years, the sources estimated.

In addition to the smartphone market, the TV sector is currently the second largest market for AMOLED panels, indicated the sources.

With LG Display's second AMOLED TV panel production line, the E4-2 fab, to enter volume production in the second half of 2017, shipments of AMOLED TV panels are expected to increase to 1.5 million units in 2017, up from 890,000 units shipped a year earlier, the sources estimated.

The global production value of AMOLED (smartphone and TV) panels is expected to surge 63% on year to US$25.2 billion in 2017 and further increase to over US$40 billion in 2021, IHS Markit said.

According to Digitimes Research's latest Special Report on AMOLED, seven China-based panel makers have been expanding existing or setting up new AMOLED production capacities, with the total annual capacity estimated to increase from 272,000 square meters in 2016 to 1.584 million square meters in 2018.