Panel makers' 2023 display equipment capex to hit lowest level since 2012, says DSCC Research

DSCC Research Institute has released its latest update on the Quarterly Display Capex and Equipment Market Share Report, revealing that panel makers' 2023 display equipment capex is expected to hit the lowest level since 2012. Weak end market conditions and concerns about future demand prospects have led to panel manufacturers postponing capacity additions, resulting in a decline in equipment capital expenditures. The decline will be most acutely felt in 2023, with OLED equipment spending down 11% and LCD spending down 24% as current capacity remains underutilized.

Postponed deliveries and survival mode for dedicated display equipment suppliers

The report indicates that some critical deliveries in Q4 2023 may be further delayed to Q1 2024 or later. While larger critical equipment companies may not be affected by this, most equipment companies have been notified of delayed deliveries, leaving them in survival mode in 2023. However, the semiconductor equipment market remains strong.

Lowered spending in 2023 and postponed spending to 2024 and 2025

The main expenditure on display equipment in 2023 is expected to drop by 68% compared to 2022, from $12 billion to $3.8 billion. This implies a 75% YoY decline in LCD spending and a 64% YoY decline in OLED spending in 2023. However, DSCC has not lowered the overall key display equipment forecast for 2020-2026, which is still $63.5 billion. Some spending has been postponed from 2023 to 2024 or even 2025, and in 2025, the forecast has increased by 26%.

Expected market pick-up in 2024

The report predicts that the market will pick up in 2024, growing by 98% to $7.6 billion, the smallest equipment capex since 2015. OLED will grow by 102% to $4.3 billion, and LCD will grow by 111% to reach $3.2 billion. Most of the OLED investment is aimed at the IT market, with OLED having great potential to gradually replace LCD in the future and lead to the demand for more capacity.

New projects and segments

Despite the slowdown, new projects and segments are still emerging. Samsung Display has started construction on the A6, which could eventually house an additional IT OLED line and/or a new QD-OLED line. Discussions on setting up one or two new factories in India are also continuing to heat up. Both LG Display and BOE have orders for MicroLED TFT backplane production lines, and two new segments are also being tracked. Solid-state laser annealing has seen Philoptics win an order from Samsung Display. The demand for multi-lens arrays is driving the growth of the IJP market.

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