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Small-Medium Display Growth Dominated by Smart Phones and Tablet PCs

Small-medium flat panel displays (those with diagonal sizes of 9”and smaller) utilize a variety of technologies and are found in many different applications. The technologies include a-Si TFT LCD, LTPS (low-temp poly-silicon) TFT LCD, electrophoretic display (EPD, also known as E Ink), AMOLED (which typically uses LTPS for the active matrix),with new technologies such as oxide TFT in development. Applications include mobile phone, mobile PC (mostly tablet PC), digital photo frame, digital camera, video camera, portable media player, e-book reader, automobile monitor, portable navigation device and other consumer electronics and embedded applications. The mix of technologies and applications, as well as the need to design the display into the product, means that small-medium displays tend to be custom made, with a complex supply chain including many material suppliers and panel makers.

However, the situation began to change in 2012 due to the growing dominance of the smart phone, which requires larger and higher resolution displays, as well as tablet PCs, which also consume higher-value displays compared to most other applications. The result is that the small-medium FPD industry has started to standardize around these “smart” applications. According to the Quarterly Small/Medium Shipment and Forecast Report, revenues for small-medium active matrix displays (including TFT LCD, AMOLED, and AMEPD) are estimated to have reached $33.9 billion in 2012, up 20% Y/Y from 2011. Only three small-medium applications showed growth, however: mobile phone, mobile PC, and automobile monitor. All other small-medium applications, including digital camera, digital photo frame, portable media player, portable navigation, and e-book readers, are in decline.

Source: Quarterly Small/Medium Shipment and Forecast Report

What’s the reason? The very success of the “smart” devices is causing cannibalization of these other applications. Smart phones, with bigger and higher-resolution displays and powerful functions, can replace digital cameras and portable navigation devices, for example, while tablet PCs, with the ability to perform many PC functions, and with excellent picture quality and battery life, are eroding the markets for e-book readers and portable amusement devices, among other devices. These changes in demand have already impacted the FPD industry, and are likely to be permanent, since it’s less likely consumers will go back to older products once they have experienced the smart handheld devices.

So what will be the impact? Panel makers at the high end of display technology may be able to significantly expand their business. For example, Japan Display Inc. (JDI), who originally focused on mobile phone displays, has started to move into the tablet PC market because they can see the potential for their technology leadership. Samsung Display, the AMOLED leader, continues to expand its AMOLED business into tablet PCs. However, for technology followers in the smart phone and tablet PC displays, the challenge may get bigger because they may lose the ability to leverage other small-medium applications. Thus, consolidation of applications could lead to further consolidation in the small-medium display industry.

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