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Panel makers revving up for automotive displays

LCD panel makers worldwide are gearing up efforts to develop automotive displays and related solutions, believing that the developments of these products will enable them to get rid of the current business slump.

Most panel makers have experienced hardships thus far this year as the unfavorable macro environments, such as the war in Ukraine and the rising inflation, have weakened demand for consumer electronics, including TVs, notebooks, and handsets, resulting in decreased panel sales.

The waning consumer electronics demand has triggered the most significant inventory correction rarely seen in the supply chain before, pushing end-market brand vendors in many segments to adjust their shipment goals downward for 2022.

According to data from market research firms, global LCD monitor shipments will likely retreat by 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, notebooks to fall 10.3% to 220 million units, and handset sales to drop 3.5% to 1.31 billion units.

Regarding shipment declines for mainstream panel applications, Omdia has also revised its forecast shipment growth rate for automotive displays to 5% in 2022 from the previous 9.9%, with related shipment volume to fall to 197 million units from the 207 million forecast earlier.

Omdia attributed the revision to disruption of the supply chain for production of light vehicles caused by the war, the city lockdown measures in China in the second quarter, and the shortage of automotive chips. However, it expects the supply chain to gradually recover from the second half of 2022 along with rebounding demand for in-vehicle displays.

Omdia's data showed that global shipments of automotive displays reached 47.4 million units in the first quarter of 2022, which were lower than its previous expectations.

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 presence in the sector.


Panel makers moving toward automotive applications

With growing concerns over macro environments, mounting inventory, and waning end-market demand, Taiwan-based panel makers, including AU Optronics (AUO), Innolux, and HannStar Display, are optimistic about the prospects of automotive displays.

AUO chairman Paul Peng said that he expects auto sales to grow steadily in the second half of 2022, mainly due to an improvement in supply chain operations and materials shortages. Coupled with the rapid growth of the electric vehicle (EV) and self-driving car markets, Peng asserted that the automotive display market is poised to deliver medium to long-term growth.

Thanks to clear order visibility from the EV and autonomous driving sectors and for large-size automotive applications, Peng said AUO will expand its investments into developing automotive displays, including technology advancements, product developments, and capacity ramp-ups.

AUO will also focus on the LTPS platform and integrate related technologies such as touch control, profile cutting, and lamination while working with automakers moving forward with system integration to realize more differentiations. AUO expects more automotive display products to proliferate in 2023-2024.

Innolux chairman Jim Hung is also optimistic about the prospects of automotive displays, noting that the company has ramped up the proportion of automotive revenue to 11.7% of its total sales in the second quarter of 2022 compared to 6.3% a year earlier.

In 2007, Hung noted that the automotive central information display (CID) unit usually comprised a 7-inch dashboard and 10.3-inch CID display. The setting evolved to a 12.3- and 14.9-inch combination in 2021 and a 34-inch integrated CID display in 2022.

Hung expects integrated CID displays with sizes over 20-inch available at a price triple that of traditional units to become a mainstream technology, for which Innolux will strive to develop and expects related automotive display shipments to account for over 50% of total sales.

Innolux has set up a subsidiary, CarUX, which will target emerging smart vehicle business opportunities. Hung said the Innolux-CarUX team will focus on developing large information display (LID) products for applications, including intelligent cockpit display systems (ICDS).

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

James Yang, president of Innolux, stressed that CarUX will strive to become the market leader for large-scale integrated automotive displays, given that high-end vehicles have begun adopting such integrated models and that related shipments will grow at a CAGR of 49% from 2020-2026.

CarUX will move towards modularization production of integrated automotive displays, integrating the functionalities of central information display (CID), dashboards, and passenger monitoring systems, Yang said.

Second-tier panel maker HannStar Display is also keen to develop display products for automotive applications, according to company vice president Wu Hsu-ho.

HannStar has entered its third-phase development of automotive displays, utilizing a-Si (amorphous silicon) technology for mainstream production. The company expects automotive displays to contribute 30-50% of its revenue growth in 2023.


Technology shift

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

Omdia expects the production of automotive displays to migrate fast toward LTPS and oxide technologies, with their related shipments increasing 76.3% and 172%, respectively, in 2022 from a year earlier.

The technology shift is mainly due to the rapid demand growth for large-size embedded touch CID displays, resulting in more panel makers shifting their 6G LTPS lines to large-size automotive displays instead of the previous focus on handset applications.

According to industry observers, with AMOLED panels now replacing LTPS ones as mainstream handset applications, the production of automotive displays has become the main application for LTPS lines.

LG Display closed its P5 a-Si LCD fab in July and relocated its production of automotive displays to its AP3 6G fab, which will have a capacity of 25,000 glass substrates a month by the year-end 2022. The fab utilizes LTPS technology.

Meanwhile, Japan Display (JDI), Sharp, and Taiwan-based panel makers have also ramped up the proportion of automotive displays at their respective LTPS lines.

China-based panel makers are relative latecomers to the LTPS segment and are moving fast. While China Star Optoelectronics Technology (CSOT) has kicked off LTPS automotive panel shipments since the first quarter of 2022, BOE Technology and Tianma Micro-electronics will start ramping up their LTPS automotive displays in 2023. And a-Si panel maker Truly Optoelectronics is slated to begin shipping LTPS models in the fourth quarter of 2023.