Japan has 50% of flat panel manufacturing equipment market
Author: EIS Release Date: Feb 26, 2020
Japanese companies supplied more than 50% of the market for flat panel display manufacturing equipment between 2017 and 2029, says IHS Markit.
South Korean firms held about a 25%,
Japan has maintained its leadership in equipment used to make FPDs, despite the fact that, in 2019, Japan accounted for just 5% of FPD capacity, down from 22% in 2004.
Driven by the technology shift from LCD to OLED and the great China FPD capacity build-out, FPD equipment sales reached an unprecedented three-year total of $54.3 billion between 2017 through 2019. This generated high revenues for equipment makers in all regions, benefiting most companies throughout the supply chain.
Japan’s FPD equipment leadership has been contested in recent years by South Korean firms leveraging their relationships with Korean panel makers and their dominant positions in the organic light emitting diode (OLED) display market.
As Korea’s LG Display and Samsung Electronics became FPD market leaders both in terms of capacity and technology, the companies began to pioneer high volume OLED manufacturing. To accomplish this, they redoubled their efforts to localize production of equipment and materials. Localization typically reduces costs, allows faster responses to issues and increases the ability to have suppliers develop specific technologies.
“Korean equipment companies have been highly successful in a wide variety of FPD equipment segments, particularly those specific to OLED production,” says IHS’ Charles Annis, “even so, Japanese equipment companies have continued to generate higher total revenues due to very strong positions in multiple high cost and critical segments such as photolithography and evaporation.”
The photolithography and evaporation segments represent a major portion of the FPD equipment business, accounting for about 20 percent of total market revenue.
Japan’s Canon and Nikon accounted for almost 98% of the array and touch on thin film encapsulation (TFE) photolithography market for the three years from 2017 to 2019. Canon Tokki accounted for 55 percent and ULVAC had 11 percent of the evaporation market during the same period.
Furthermore, Japanese equipment companies that supplied Sharp’s Gen 10 fab starting in 2008 are positioned to win business in the current G10.5 expansion wave in China.
Korean equipment company revenue share was higher in 2016 and 2017 due to the build-out of new flexible OLED factories at both Samsung and LG Display.
Companies in the region have taken leadership positions in the key market for excimer laser annealing (ELA). ELA requires significantly higher equipment intensity and increased average selling prices for OLED displays than for LTPS LCDs. Korea’s AP Systems accounted for 60% of the ELA market, while all Korean makers collectively commanded 74% of the market between 2017 and 2019.
In the wet etch segment, Korean firms DMS, KCTech and SEMES accounted for 73% of the market over the same time period. On a unit and total-available-market basis, Korean equipment makers’ share is relatively higher.
The FPD equipment market is Asia-centric, but U.S.-based firms and companies in other regions also contribute substantially.
Principally, Applied Materials accounted for 84% of CVD revenues over the three year period between 2017 through 2019. High value-added CVD vacuum equipment is used in multiple applications for array, barrier, thin-film encapsulation and touch on TFE. As a result, CVD is one of the largest FPD equipment segments and was valued at more than $4.5 billion between 2017 and 2019.
The FPD equipment market now is facing new challenges. Many manufacturers are struggling to ramp production of new flexible OLED factories. Additionally, many top tier LCD makers are having to restructure their manufacturing operations to absorb excessive television capacity.
Due to these trends, the FPD equipment market is forecast to decline 29 percent to a total of $38.6 billion over the next three years.