Omdia: Global display fabs capacity utilization recover to 74% in 2Q23 while OLED fabs are under 60% average

LONDON, 18 April, 2023 – New research from Omdia’s Display Production & Inventory Tracker reveals that total display fab capacity utilization is recovering from 66% in 1Q23 to 74% in 2Q23 thanks to surging orders of LCD TVs, notebooks, monitor panels and smart phone LCD panels. However, OLED fabs are still facing challenges to raise capacity utilization with average OLED fabs capacity utilization expected to be under 60% in the first six months of 2023.

2022’s over -supply has devastated LCD and OLED fabs capacity utilization. After low utilization in 1Q23, LCD fabs are gradually picking up the glass substrate input from 2Q23. LCD makers, especially in China, are gradually and cautiously raising their capacity utilization following disciplined capacity control to sustain panel prices. 

In 2Q23, even with increasing orders and some rush demand surge, most LCD makers are setting up a roof of 80% capacity utilization rate.  

David Hsieh, Senior Director in Omdia’s Display research practice said: “OLED fabs are in lower capacity utilization than the mature, smoother running LCD fabs. Parameters for these include TFT array backplane throughput, OLED evaporation takt time, complex product switch, touch sensor patterning lead time, and the customization of OLED module form factor.”

On these parameters, the so-called full capacity utilization of LCD fabs can be viewed as 100% loading, but for OLED, 80%-90% on the total designed capacity can be viewed as full loading. 

“The issue for OLED now is slow demand, rather than these process parameters,“ added Hsieh. 

Omdia forecasts  that demand for smartphone OLED will not fully recover through 11H23 while OLED TV fabs will face slow market demand. OLED TV panel orders from LGE, Sony, Panasonic, TPV, Hisense, Samsung are not sufficient for the Gen8.5 OLED fabs to sustain a high-capacity utilization rate, and some China flexible Gen6 OLED fabs are suffering from unstable orders and a struggling throughput situation.

“While the recovery of LCD is receiving prominence and will obviously help uphold LCD prices and capacity utilization simultaneously, OLED will need to wait for further high-end consumer electronics demand recovery,” concludes Hsieh.

David Hsieh is presenting at Touch Taiwan 2023 and Taiwan Tech Conference 2023.