Plate makers rush to show cars

LCD panel makers around the world are preparing to develop automotive displays and related solutions, believing that developments in these products will enable them to shake off the current slack in the business.

Most panel makers have struggled so far this year as unfavorable macro environments, such as the war in Ukraine and high inflation, have dampened demand for consumer electronics, including televisions, laptops and cell phones, leading to lower panel sales.

Dwindling consumer electronics demand has corrected the most critical inventory seldom seen in the supply chain before, prompting sellers of end-market brands in many sectors to adjust their shipping targets downward for 2022.

According to data from market research firms, global LCD shipments are likely to decline at an annual rate of 3.5% to 140 million units in 2022. Meanwhile, TV sales are likely to decline 3.8% to 200 million units, while declining Laptop sales fell 10.3% to 220 million units, and mobile phone sales fell 3.5% to 1.31 billion units.

In terms of lower shipments for motherboard applications, Omdia also revised the projected shipment growth rate for automotive displays to 5% in 2022 from the previous 9.9%, with related shipment volumes dropping to 197 million units from the previously forecast 207 million.

Omdia attributed the review to supply chain disruptions for light vehicle production due to the war, city-lockdown measures in China in the second quarter, and a shortage of auto chips. However, it expects the supply chain to recover gradually from the second half of 2022 coupled with high demand for in-vehicle displays.

Omdia data showed that global shipments of car display screens reached 47.4 million units in the first quarter of 2022, lower than its previous forecast.

Despite the downward revision, the automotive display segment will remain one of the primary display applications that will maintain growth in 2022, attracting panel makers to expand their presence in the sector.

Panel makers are moving towards automotive applications

With growing concerns about macro environments, mounting inventory, and waning end-market demand, panel makers in Taiwan, including AU Optronics (AUO), Innolux and HannStar Display, are optimistic about the prospects for auto offerings.

AUO Chairman Paul Peng said he expects auto sales to grow steadily in the second half of 2022, mainly due to improvement in supply chain operations and material shortages. Besides the rapid growth of electric vehicles (EV) and self-driving car markets, Peng emphasized that the car display market is poised for medium to long-term growth.

With a clear view of demand from the electric and autonomous vehicle sectors and for full-size vehicle applications, Ping said AUO will expand its investment in vehicle display development, including technology developments, product development and capacity expansion.

AUO will also focus on the LTPS platform and integrate related technologies such as touch control, profile cutting, and lamination while working with automakers to advance system integration to achieve greater differentiation. AUO expects to spread more auto display products in 2023-2024.

Innolux Chairman Jim Hung also expressed optimism about the prospects for the auto offering, noting that the company raised auto revenue to 11.7% of its total sales in the second quarter of 2022 compared to 6.3% a year earlier.

In 2007, Hong noted that a vehicle’s central information display (CID) unit typically consists of a 7-inch instrument panel and a 10.3-inch CID display. The setup evolved to a 12.3- and 14.9-inch combination in 2021 and a 34-inch integrated CID monitor in 2022.

Hong expects compact CID displays in sizes over 20 inches to be available at three times the price of conventional units to become a mainstream technology, which Innolux will seek to develop and expects vehicle-related display shipments to account for more than 50% of total sales.

Innolux has created a subsidiary, CarUX, which will target emerging business opportunities in the field of smart cars. Hong said the Innolux-CarUX team will focus on developing large information display (LID) products for applications, including Intelligent Cockpit Display Systems (ICDS).

ICDS will integrate various control modules, including image, communication, human-machine interface, driving control and safety guidance, through optoelectronic, mechanical and related software and hardware technologies to provide drivers with the best cockpit experience.

James Yang, President of Innolux, emphasized that CarUX will strive to become the market leader for large-scale integrated vehicle displays, given that high-end vehicles are beginning to adopt such integrated models and related shipments will grow at a compound annual growth rate of 49% from 2020-2026 .

Yang said CarUX will move toward modular production of integrated vehicle displays, integrating central information display (CID) functions, dashboards and passenger monitoring systems.

Tier 2 panel maker HannStar Display is also keen on developing display products for automotive applications, according to company vice president Wu Hsu-ho.

HannStar has entered the third stage of its automotive display screen development, using a-Si (amorphous silicon) technology for mainstream production. The company expects auto offerings to contribute 30-50% to its revenue growth in 2023.

technology transformation

However, according to data from Omdia, shipments of Si-based LCD auto panels declined 3% year-over-year in the first quarter of 2022, while both LTPS and oxide-based auto panels experienced significant growth over the same period.

Omdia expects automotive screen production to rapidly transition towards LTPS and oxide technologies, with related shipments increasing by 76.3% and 172%, respectively, in 2022 compared to the previous year.

The technology shift is mainly due to the rapid growth in demand for compact, large-format touch screen CID displays, which has resulted in more panel makers converting 6G LTPS lines into large-format automotive displays rather than the previous focus on mobile applications.

According to industry watchers, with AMOLED panels now being replaced by LTPS panels as the mainstream phone applications, the production of automotive screens has become the primary application of LTPS lines.

LG Display closed its P5 a-Si LCD fab in July and moved its automotive display production to the AP3 6G fab, which will have a capacity of 25,000 glass substrates per month by the end of 2022. This company uses LTPS technology.

Meanwhile, Japan Display (JDI), Sharp, and panel makers in Taiwan have increased the proportion of automotive displays in their LTPS lines.

Panel makers in China are relatively latecomers in the LTPS sector and are moving fast. While China Star Optoelectronics Technology (CSOT) has launched shipments of LTPS vehicle panels since the first quarter of 2022, BOE Technology and Tianma Micro-Electronics will begin to ramp up LTPS vehicle displays in 2023. The panel maker A-Si is scheduled to make electronics Truly photovoltaic to begin shipping LTPS models in the last quarter of 2023.

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