Low-end smartphone and feature phone display shortage driving up prices and shipments
From December 2015 through the first quarter of 2016, the shortage happening in the feature phone display and low-end smartphone display markets is driving up panel prices and shipments.
While the smartphone industry is focusing on higher resolutions and better-performing displays, demand for feature phone and low-end smartphone displays is being reshaped. For resolutions such as WVGA (800x480) or FWVGA (854x480) for low-end smartphones and HVGA (320x480) or below for feature phones, the supply demand started to become unbalanced at the end of Q4'15 and a shortage occurred due to the production adjustments of the display makers. The shortage has been driving panel shipments and the price of displays to go up. Price increases, in particular, are rare in the mobile phone display market.
As all small-to-medium display makers are focusing on LTPS (low temperature poly silicon) TFT LCD technology or AMOLED from now on and targeting the higher-resolution, higher-end HD (720p) and Full HD (1080p) smartphone display, there is less attention being paid to the low-end smartphone and feature phone markets.
There are still good opportunities for these low-end products in emerging economies such as South America and Africa and parts of China. But, many display makers have been retreating from these markets, and this is one factor contributing to the shortage. Panel makers including Tianma, IVO from China, and HannStar from Taiwan increased their display shipments for feature phones and low-end smartphones, pushing mobile phone panel shipments to their highest historical level in December 2015.
According to the latest IHS Smartphone Display Shipment Tracker, major panel makers' panel shipments for mobile phones increased to 221.4 million in December 2015, which is a new record high. The shipments include the LCD module and cell OEM business model. In December 2015, smartphone panel shipments were flat month-over-month at 160.6 million. However, shipments for feature phones increased to 60.7 million, up 28% month-over-month. 5.x" panel shipments continued to rank #1 in total shipments with 96.8 million, a 39% market share. 4.x" panels were #2, with 55 million smartphone shipments. Panel shipments under 3.x" increased sharply due to increasing demand in the feature phone market.
HannStar and IVO provide only cell-type panels to brands and module makers. CPT's cell shipment share also increased to 93% of the company's total shipments. In December 2015, HannStar was the #1 ranked panel supplier based on panel shipments with 34 million, up 51% month-over-month. BOE, AUO, and Tianma also recorded double-digit growth due to strong demand for feature phones and low-end smartphones. BOE shipped 32 million in December 2015, followed by Tianma with 28 million, Infovision with 21 million, and Samsung Display with 20.6 million. HannStar, Tianma, and Infovision are the main suppliers of feature phone and low-end smartphone displays, and have benefitted from panel price increases. On the other hand, Samsung Display decreased its AMOLED shipments in December 2015, down 25% month-over-month. However, strong demand is expected in the first quarter of 2016 thanks to Samsung's new OLED smartphone release.
David Hsieh is Director of Analysis & Research within the IHS Technology group
Posted on 3 February 2016
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