AUSTIN, Texas, June 7, 2017 /PRNewswire/ -- Display Supply Chain Consultants (DSCC) has begun tracking and forecasting the overall display equipment market as part of its recently launched Quarterly Display Capex and Equipment Service.
As shown in Figure 1 here, the Q1'17 display equipment market rose 6% Q/Q and 93% Y/Y to $4.5B, following the capex trend which was up 8% Q/Q and 106% Y/Y to $8.9B. According to DSCC CEO Ross Young, "The display equipment market is enjoying unprecedented growth as a result of two major investment cycles occurring simultaneously. The first cycle is derived from OLEDs completely replacing LCDs in the smartphone market. This cycle is expected to last until the middle of the next decade given the size of the smartphone market and the capital intensity of flexible OLED fabs which cost 2-5X more than similar LCD fabs. OLEDs are being sought after in the smartphone market not only for improved display quality, reduced weight and thickness, but also for new flexible, foldable and rollable form factors, which will result in unbreakable and larger displays and will drive higher revenues and margins for smartphone brands as well as OLED panel suppliers. The second cycle is a result of tight supply for 60" and larger 4K TVs, which is resulting in at least five 10.5G fabs in the next few years which will help reduce the cost and prices for these products. These are also expensive fabs which are helping to drive the display equipment market to new heights."
As shown in Figure 2 here, Canon was the leading equipment supplier in Q1'17 with a 16% share on over 500% Y/Y growth as it now enjoys over a 50% share in the two largest equipment segments – lithography and evaporation. Canon sold more exposure tools than Nikon for the first time since Q3'14 in Q1'17 and its Tokki subsidiary has a dominant position in the OLED evaporation market. AMAT was #2 on strength in CVD and inorganic PECVD encapsulation for flexible OLEDs. SFA Engineering was #3 on significant shipments of automation and various tools to Samsung. In total, ten companies experienced greater than 50% growth with 6 companies up over 90%. In general, equipment companies strong in flexible OLED specific equipment should enjoy the fastest growth as those markets outperform.
Equipment supplier financials are also analyzed and aggregated and have reached new highs with operating margins reaching 13% and net margins climbing to 10%.
Looking forward, Young believes that strong quarterly growth in equipment spending should continue throughout 2017. In addition, with LG and Samsung pulling in some OLED business from 2019 into 2018, there should be display equipment revenue growth in 2018 as well.
DSCC's Quarterly Display Capex and Equipment Service also examines industry capacity in detail through the distribution of comprehensive pivot tables on fab schedules and industry capacity by company, technology, region, substrate size, etc. For analysis of display industry capacity, please click here.
This new service also provides what if analyses, equipment supplier design wins, market share and analyzes and aggregates equipment supplier and panel supplier financials.
About Display Supply Chain Consultants
Display Supply Chain Consultants (DSCC) was formed by experienced display market analysts from throughout the display supply chain and delivers valuable insights through consulting, syndicated reports and events. The company is in the US and Japan, is on the web at www.displaysupplychain.com and can be reached in the US at firstname.lastname@example.org and (512) 577-3672 or in Japan at 81-90-4597-5632 or email@example.com.
Display Supply Chain Consultants
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