This year’s Consumer Electronic Show (CES) in Las Vegas highlighted many of the coming display trends expected for 2015. As device makers diversify their product lines for varying demographics, display supply chains are always diversifying their strategies as well. The maturing smartphone market is driving device makers and display makers to differentiate their product lines and upgrade features to maintain a competitive edge. While 2014 built a strong foundation in technologic advancement via new innovation, 2015 is expected to reap the benefits with those innovations actually becoming realized. In 2015, displays will continue to be a pivotal part of device design as they enhance device experience as devices become a central part of users’ lives.
Advancements in display technology during 2014 helped to build a strong foundation for further innovation and enhancement, with the 2015 smartphone display market expected to grow moderately by 8.9% year-over-year (YoY) to reach 1.73 billion units. IHS believes the further development of key display trends from 2014 will gain further momentum throughout the coming year, as challenges are overcome. High-Resolution displays will continue to gain traction as they penetrate into the lower segments & increase adoption amongst Chinese and Top tier OEMs alike. The 5.x-inch will continue to gain power in the market, with 4.x-inch remaining for the lower resolution models. LCD is expected to maintain dominance in smartphone market due to competitive pricing and wealth of capacity.
Throughout CES, smartphone makers like Alcatel, Archos, ASUS, Samsung, & Xiaomi showcased their new product suites with multiple variants of models alongside their flagship devices. A heavier focus was placed on the development of the low-end (Factory ASP < $150) & midrange segment ($150 < Factory ASP < $400). The low-end display market is poised to increase its adoption of HD (1280x720) and feature a small penetration of Full HD (1920x1080) displays as a-Si panel makers in Taiwan and China upgrade their production lines with added masking steps. The mid-range segment is anticipated to increase its adoption of Full HD (1920x1080) LTPS panels as pricing comes down. Further, AMOLED is expected to increase its penetration in the midrange segment via Samsung’s new “Lean AMOLED” which offers more competitive pricing and performance to LCD. The high-end (Factory ASP ≥ $400) market will continue to showcase its aptitude and zeal for high performance and high priced displays, with Quad HD (2560x1440) becoming the new benchmark. More notable is the expectation of 4K emergence from AMOLED per Samsung, which will reportedly debut during the latter half of 2015. Higher resolutions (>400 PPi) not only offer consumers a more immersive experience and access more HD media, but also allows panel suppliers to hedge declining ASPs for antiquated panel resolutions.
As varying resolutions made their presence known at this year’s CES, so too did varying sizes, with 4.x-inch to 5.x-inch becoming the sweet spot for many devices makers like Huawei, LG, Samsung, Lenovo, ZTE, and many others. These larger sizes enhance device experience by creating a more cinematic viewing space and granting more real estate for additional content & componentry. The bigger sizes also benefit suppliers as they are able to better utilize capacity at their larger Gen 5 b& Gen 6 fabs. On these larger fabs the bigger display sizes are produced more efficiently with less waste than smaller sizes. The 4.x-inch will be reserved primarily for the low-end market, along with select premium models in the high end segments for OEMs like Apple. The 5.x-inch will be targeted for flagship devices across all market segments, enabling more pixels for high resolution. Further, the 5.x-inch is better positioned for flexible smartphone market, as the larger surface area will allow for more give and curvature in the display while still maintaining the integrity of a smartphone display, as showcased by LG with its new Flex 2 smartphone. The average diagonal measurement for smartphone displays is expected to grow from 4.7-inch in 2014 to 5.2-inch by 2018.
While device makers like LG & Samsung, continued to show innovation with flexible OLED, it was clear that LCD maintained its position as the dominant technology this year at CES. As Chinese makers gain traction, LCD panel suppliers are cognizant of their stringent pricing and specification demands and responding with increased utilization at production fabs. Overall LCD capacity for the small & medium LCD market is expected to increase from over 21% YoY to reach an average of 3.8 million sheets/month in 2015. The added growth will further incentivize suppliers to further lower pricing to remain at least 10%-20% lower as competition increases, which will drive up demand for LCD amongst Chinese and global device makers alike.
Yields are expected to lower for newly designed large higher resolution displays are likely to challenge suppliers in the early stages, as upgraded specifications often require added tooling & mastering. However, as with past trials, panel suppliers are expected to overcome these challenges quickly as they cannot afford to waste time. As device makers expand their product lines and smartphones become the technical hub of consumer’s lives, the smartphone display industry is expected to maintain strength and wealth.