DSCC updated its capacity forecast last week as part of the deliverables from its Quarterly Display Capex and Equipment Market Share Report.

The latest forecast revealed the following highlights:

  • With Korean manufacturers LGD and SDC shutting down significant LCD capacity in 2020 and 2021 and/or converting it to OLEDs at a lower volume as they retreat from subsidized China competition, regional dominance is clearly shifting once again in the display industry and it may be for good. While Japan dominated the display industry in the 1980s and 1990s, Korea dominated in the 2000s and for much of the 2010-2019 period. Taiwan emerged in the 2000s taking significant share but remained below Korea. China emerged in the 2000s and really boosted its position over the last 5 years relative to its competition as China’s Made in China 2025 plan led to significant, some may say excessive, investments in the LCD and OLED markets to create more jobs for Chinese workers. The result, Korean manufacturers LGD and SDC are retreating from their Chinese subsidized competition despite enjoying fully depreciated fabs. The lower cost labor, materials, land, various forms of subsidies and tax credits have proved too much for LGD and SDC who are quickly leaving the LCD industry. As you can see in the first chart below
  • LGD’s LCD capacity is falling 24% in 2020 and 31% in 2021.
  • SDC’s LCD capacity is falling even faster, down 27% in 2020 and 70% in 2021.
  • Japan Display is also reducing its LCD capacity in 2020 through closing an LCD fab.
  • As a result, while LGD and SDC led in LCD capacity in 2016 with 20% and 19% capacity share respectively in 2016, by 2022 they will both be out of the top 5 and account for just a combined 9% share.
    • LGD’s LCD capacity share is falling from 16% in 2019 to 7% in 2022;
    • SDC’s LCD capacity share is falling from 12% in 2019 to just 3% in 2022;