Display glass substrate is a key material for all display technologies, including flexible displays that utilize it as carrier glass. Corning, AGC, and NEG are major glass substrate makers that make up more than 90% of the total market share. The demand for display glass substrate area has consistently increased over time, while its price has decreased. Amid the global energy inflation, the high energy costs of glass production have led to major display glass makers operating in the red during 4Q22. NEG’s experienced of deficits for two consecutive quarters the abrupt closing of its South Korean factory, two Japanese companies closing factories in 2Q23, and AGC ending its display glass production at its Takasago factory are all a result of the recession faced by the display industry.
Meanwhile, Corning announced increasing glass prices in 3Q23, creating an interesting dynamic in which a US company is raising prices while Japanese manufacturers are focused on reducing production costs to enhance the profitability of their glass business.
Challenges in turning a profit with LTPS glass production
Low-temperature polycrystalline silicon (LTPS) glass substrate is the dominant choice in Gen 6 lines for OLED display production. LTPS requires a low coefficient of thermal expansion (CTE) performance because the LTPS process involves higher temperatures. Each display glass maker has developed its own LTPS glass, as shown in Table 1. In the market, AGC’s AN Wizus and Corning’s Lotus NXT glasses hold high shares. However, glass makers find it hard to profit with LTPS because of the need for higher performance, low contamination levels, and smaller glass substrate sizes. Major glass makers are asking panel makers to discontinue the shipment of small generation glass, ranging from Gen 2 to Gen 4.
Table 1: LTPS glass development
LTPS glass is facing a shortage
There have been recent reports of a particular glass maker encountering production yield challenges with LTPS glass. To address this issue, the company is in negotiations with panel makers to explore oxide glass as an alternative solution because the company’s glass tanks are quite old, which poses difficulties when it comes to maintaining high-quality production levels.
Other glass manufacturers have seen an increase in LTPS glass shipments. However, the production tanks for LTPS glass have already been set. It is not easy to increase their capacity owing to limitations. Omdia predicts that there will be a shortage of LTPS glass in 2024.
Dongxu applies post annealing to its LTPS glass
Post annealing, a process of applying heat after glass production to relieve internal stress and facilitate the production of low CTE glass, has not been adopted by major glass makers for display glass production. The reluctance is attributed to a perceived lack of profitability and additional costs associated with post annealing. However, Dongxu has implemented post annealing to its LTPS glass, suggesting that the company might prioritize market share over immediate profitability.
However, Chinese glass manufacturers do have extra capacity. To prepare for a potential shortage of LTPS glass, Chinese panel makers are testing Dongxu's LTPS glass. So far, Dongxu's LTPS glass is only used in the BOE Ordos line. Omdia believes it will take time for Dongxu’s glass to be widely used in the LTPS process. Yet, with a predicted shortage of LTPS glass in 2024, Chinese panel makers will have to use Dongxu's LTPS glass. Since the color filter side can handle lower-quality glass, and low-resolution displays can use lower quality glass, Chinese glass manufacturers will use Dongxu's LTPS glass for these purposes. Dongxu has plans to improve the quality of its LTPS glass in mass production over time in response to panel makers' requests. This LTPS glass shortage could pose a risk for major glass manufacturers but will also push Chinese glass makers to improve their quality and gain more market share.
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