Flexible AMOLED display overcapacity is looming, predicts IHS Markit

July 27, 2017 // By Julien Happich
In the current, unprecedented phase of active matrix organic light emitting diode (AMOLED) panel factory build-out, flexible AMOLED capacity will expand from 1.5 million square meters to 20.1 million square meters between 2016 and 2020, at a compound annual growth rate of 91 percent, predicts market research firm IHS Markit.

In 2016, flexible capacity, or factories with the ability to produce AMOLEDs on plastic substrates, only accounted for 28 percent of total capacity targeting mobile applications. This will increase to 80 percent by 2020 as almost every new Gen 6 fab and smaller factory built over the next four years will be flexible compatible, according to the company's Display Supply Demand & Equipment Tracker report.

Between 2016 and 2020, IHS Markit expects China, Japan and South Korea to build the equivalent of 46 new flexible AMOLED fabs, whose monthly capacity will reach 30,000 substrates, each. These fabs will add 18.6 million square meters of new plastic substrate production capability, more than 13 times the industry’s current level.

“All of the new capacity will facilitate a rapid increase in flexible AMOLED panel adoption in smartphones,” explains Charles Annis, senior director at IHS Markit.

“Nevertheless, as so much new flexible capacity is being added, it is starting to raise concerns that the market will not be able to absorb all of the potential output.”

IHS Markit forecasts that the tight AMOLED panel supply in 2016 will continually give way to a growing capacity-based glut. The supply is predicted to exceed demand by more than 45 percent in 2020, when 40 percent of smartphones will adopt AMOLED panels.