While LTPS LCD fab utilization continues to improve, DSCC believes this data points to lower priced phones selling better. LTPS LCD fab utilization is expected to rise from 76% in Q3’18 to 83% in Q4’18. By month, it hit 85% in October and November, which are expected to be the peak months of the year for LTPS LCD fab utilization.
In seasonally weaker December, fab utilization is expected to drop to 78%. By supplier for Q4’18 as shown below, Tianma is expected to lead at 96% followed by BOE at 93% which jumped from 68% in Q3’18 and overtook AUO for #2. Chinese suppliers are gaining share with CSOT rising to #3 in fab utilization at 88% vs. 82% in Q3’18. Thus, the top 3 companies for LTPS LCD fab utilization are all based in China.
There has been a lot of interest in Apple’s iPhone XR supply chain. JDI and LGD are the suppliers there and DSCC shows JDI’s fab utilization falling from 74% to 71%. At just their 6G fabs, it falls from 81% in Q3’18 to 75% in Q4’18. In LGD’s case, their fab utilization is actually improving from 56% in Q3’18 to 82% in Q4’18, thus, it appears they are benefiting from Apple’s latest launch and winning business at the expense of other Apple suppliers as their LTPS LCD fab utilization was just 68% in Q4’17.
In the case of OLEDs, the report shows that flexible OLED utilization is overtaking rigid OLED utilization in Q4’18 for the first time since Q4’17 which should be encouraging to the OLED supply chain. However, even the best quarter for flexible OLED utilization in 2018 is just 70%, which should result in slower mobile OLED capex in 2019.
By month, DSCC sees flexible fab utilization rising each month from 32% in April to 69% in October, falling slightly to 68% in November and rising to 71% in December.