CAPEX Spending By Display Manufacturers Surpasses $7B This Year; On Both LCD And OLED
November 25, 2024 by Dave Haynes
One indicator of the relative health of the display tech sector would be how much manufacturers are spending on equipment, and by that measure, the sector looks quite robust. But a 47% jump in spending in 2024 comes immediately on the heels of big dips in investment the previous year.
The research and consulting firm DSCC’s Quarterly Display Capex and Equipment Market Share Report indicates display equipment spending is expected to bounce back from a weak 2023 and rise 47% in 2024 to $7.3B.
From the report summary:
LCD equipment spending is expected to lead the way with a 54% share on 95% growth after spending was slashed 67% in 2023 due to weak post-COVID LCD market conditions, a significant LCD oversupply and net losses for LCD suppliers. As conditions have improved and demand has rebounded, LCD fab spending has increased.
OLED fab equipment spending is also expected to recover in 2024, up 16%, after falling 54% in 2023 with the OLED industry not immune from LCD weakness as many of the manufacturers are the same in both technologies. While OLEDs have been taking share in many display applications, weakness in OLED TV demand has kept a lid on OLED capex.
Looking forward, display equipment spending is not expected to fall back to 2023 levels. Instead, spending is expected to hover around the $7B-$8B figure for the next few years as OLED fab spending grows to meet rising demand for OLEDs in most applications. In particular, the IT market consisting of laptops, tablets and monitors, is expected to surge requiring new capacity optimized for these products. Those markets are expected to rise at a 46% CAGR on a unit basis from 2023 to 2028 to over 60M panels.
Looking at the latest quarter’s new fab projects, there are a number of interesting developments.
- In OLEDs, there are a number of G8.7 IT OLED fabs coming in the forecast period which are expected to account for 52% of all display equipment spending between 2024 and 2027. These fabs are expected to reduce the costs for making 10”-20” panels for the IT markets and help boost OLED penetration in these and other markets. Mobile OLED spending is continuing as well with a couple of new G6 fab lines being added over the forecast as well as more LPTO and CoE conversions which will also help boost spending.
- In LCDs, there are a few LCD fab investments targeting ultra-large TVs 85” and over which require some specialized equipment. There are also some examples of LCD manufacturers looking to boost transparency for AR/VR applications by adopting an LTPO backplane. There is also a large LCD investment from a new player targeting the e-reader market with a new type of LCD-based reflective technology.
The summary doesn’t get into it, but I am guessing the spending in microLED and what’s called micro OLED is that these technologies don’t require the same CAPEX spend. Spinning up a new OLED fab is $1B USD+ while microLED and micro OLED are based in part on existing semiconductor manufacturing tech, with the LED or OLED placed on silicon wafers. Micro OLED is more about things like VR headsets, as opposed to large format displays.
> Spinning up a new OLED fab is $1B USD+ Well, yes, Dave, its 1+ but in practice it’s multiples of that if you want to make OLEDs competitively for smartphones, monitors or TVs. Single tools can cost $500 million! More on the scale of $5 to $6 billion, although it depends on capacity.
Thanks Bob … I was working off a displayco CTO’s number, but yes, I can believe the costs can be multiples of $1B!