Market Dynamics
Flexible Display Market Drivers
Innovation in Consumer Electronics
Some of the major factors driving the adoption of connected and innovative solutions across the consumer electronics sector are the growing trend of smart homes and buildings, as well as the increasing demand for connected technologies. The incorporation of smart sensors into residential devices has increased the replacement cycle of new consumer electronics. The use of displays to control and communicate with the device is growing significantly.
For example, in July 2020, Samsung released the connected refrigerator SpaceMax Family Hub. It automates meal planning, allows consumers to see inside the refrigerator from anywhere, and users can watch their favorite TV shows while working in the kitchen on the refrigerator's massive entertainment screen.
Aside from that, residential devices such as televisions are undergoing revolutionary changes. For example, the global demand for new TVs is expected to be solely for smart TVs; with increased access to high-speed internet, demand for smart TVs with better picture quality is increasing. With so many viewers consuming media from OTT platforms like Netflix, Amazon, and others, the need to store data effectively is becoming critical. According to Bitmovin, the market is shifting toward a new generation of video codecs that offer 30 to 70% better compression than H.264.
Increased Demand for Greater Picture Quality
In 2021, more companies were offering 8K TVs, particularly in North America and Europe. 75- to 85-inch models are expected to be more popular this year compared to 65-inch models the previous year. Additionally, advancements in HDR, LED and other technologies are expected to boost demand.
In recent years, the number of 4K televisions sold has increased at an exponential rate. According to JEITA, the shipment volume of 4K TVs in Japan in 2020 was 3.05 million, up from 2.58 million the previous year. The change in resolution and quality of the contents is expected to drive the demand.
With the proliferation of screen sizes, the number of pixels per inch in 8K decreases. Additionally, studies show that consumers are unable to distinguish 8K videos from 4K videos. However, due to cost reductions in the coming years, demand for 8K screens is expected to rise significantly in the coming years.
PC gaming has recently become a popular choice among millennial gamers. This shift is primarily due to a combination of factors, including improved gameplay quality, the availability of high-end hardware and software, and increased internet bandwidth. Today, more exciting and demanding technology, such as VR and 4K displays, is available. As a result, PC gamers are expected to upgrade their equipment accordingly, which is one of the factors driving sales of gaming-specific PCs and their accessories like gaming screens. Thus, increased demand for picture quality has boosted the demand for flexible displays.
Flexible Display Market Restraint
Higher R&D Cost and Highly Dynamic Market
With the increasing demand for higher picture quality and resolution, vendors are increasingly investing in product innovation. LG Display, for example, invested KRW 1,740 billion in 2020; large vendors with a larger market share can invest a larger share of revenues in innovation, which other vendors in this space do not have.
Aside from that, the flexible display market share is highly dynamic in terms of technology pricing. For example, in recent times, the market selling prices of TFT-LCD and OLED panels have been consistently falling, affecting the revenues of vendors operating in the market and posing a challenge to their growth in the product category.
The industry is highly competitive, and vendors operating in it face price and margin pressure as many vendors add production capacity to compete on price. Vendors from Korea, China, Taiwan, and Japan are investing in expanding their production capacities, which significantly impacts global vendors' ability to remain sustainable and profitable in the market.
Furthermore, the new 8K displays are expected to decrease prices and sell for around USD 3,500 to 4,000 by 2022, down from their current average selling price of around USD 4,500. This is expected to have a negative impact on the margins of vendors operating in this space.
What Are Future Opportunities in the Flexible Display Market
Evolution of the Electronics Industry to Create Lucrative Opportunities
The ongoing evolution of smartphones and computers has aided in developing display technologies, with foldable and flexible displays emerging as the most recent landscape component. Curved displays have already gained traction among users through innovative TV screens, desktop monitors, and phones, so the market is expected to grow over the forecast period.
Flexible displays, which are being seriously discussed as a potentially disruptive technology for future handheld and other devices, are being investigated by smartphone behemoths such as LG, Samsung, and Huawei to deliver revolutionary designs to users.
However, cost increases, decreased finished product rates, price increases, a lack of product differentiation, seasonal demand patterns, and uncertainty about economic prospects pose significant demand growth challenges. In 2020, there will be more opportunities for flexible OLED displays due to a focus on cost reduction, adding new functions, implementing product differentiation, a fresh appearance, and industry demand for 5G models.
Telecom companies claim that the benefits of 5G networks will soon be available to consumers worldwide, implying that electronics manufacturers can fully develop 5G-compatible smartphones and computer parts. The technology is expected to deliver unprecedented internet speeds in homes and smartphones, with trials claiming networks nearly 100 times faster than 4G.
Understandably, the introduction of 5G will bring the ability to perform more tasks on a single device than was previously possible on previous networks, owing to the enhanced capabilities of new phones and laptops. Currently, the industry believes that flexible OLED displays are the best solution for the next generation smartphone market.
Emerging Trends in the Flexible Display Market
OLED Technology to Witness Significant Growth
OLED is a new display technology that allows for more efficient displays and lighting panels. OLEDs are already being used in a variety of mobile devices and televisions. OLEDs are the most recent generation of display technology, offering superior performance and improved optical characteristics over older LED and LCD technologies.
Furthermore, smartphone manufacturers such as Samsung Z fold and LG G8X have used second-generation flexible OLED displays that can be bent. OLEDs were mainly used to create a market impression of foldable smartphones. Rolled OLEDs, on the other hand, are now making their way into the TV and smartphone markets.
Compared to other options, flexible displays made of OLED are more energy efficient. OLEDs are available in a very small factor, allowing manufacturers to build them as individual pixels. These are already being used in a variety of consumer electronics, such as curved OLED TVs, and are in high demand.
Regional Analysis
Asia-Pacific is Expected to Witness the Significant Market Share
The Asia-Pacific market landscape is primarily driven by significant market consolidation, resulting in a plethora of advanced display technologies that have dominated the market. Furthermore, Asian countries are the home of display manufacturing foundries, giving this region a dominant market position.
The majority of display manufacturers are concentrated in the Asia-Pacific region, with South Korea, Taiwan, Japan, and China accounting for a sizable proportion of vendors operating and catering to various electronics manufacturers worldwide. Chinese panel manufacturers have continued to invest in new fabrication facilities and additional supplies due to Chinese government initiatives and support. Thus, Asia-Pacific is expected to be at the epicenter of the market due to the region's growing penetration and consumer base for consumer electronics.
The initial market demand in the consumer electronics segment is expected to come primarily from emerging economies in APAC, North America, and Europe. The adoption of flexible OLED displays is anticipated to drive the market. The majority of the companies' manufacturing facilities and corporate offices are spread across Asia-Pacific, Europe, and North America. LG Display, Samsung Electronics, Motorola Inc., and Koninklijke Philips NV are just a few of the companies with manufacturing facilities all over the world.
The end-user application settings and subsequent demand for various television set heavily influence the European market landscape. In the current market, European TV OEMs and brands use either an IPS panel or a VA panel, depending on their models and sales regions. For example, the VA panel may have a higher contrast ratio in a comparatively darker environment, whereas consumers in some European countries prefer a darker living room.
Segmental Analysis
The global flexible display market share has been classified based on display type, substrate material, application, and region.
Display Type Outlook
By display type, the OLED segment dominates the global market and is expected to grow at a CAGR of 35.87%, generating a revenue of USD 175.95 billion by 2030. This OLED display can be subjected to a high degree of flexibility, consumes less energy, and is prominent in the market. In addition, OLED offers the potential for vast improvements in image quality and opens up new possibilities for device design.
Substrate Material Outlook
Based on the substrate material, plastic acquires the largest share of the market. Plastic-based flexible displays are the most recent advancements. Plastic AMOLED panels are substantially thinner and lighter than traditional glass-based displays, allowing for slimmer devices or larger batteries.
Application Outlook
Based on application, smartphones and tablets hold a prominent share in the global flexible display market. The smartphone and tablet segment is expected to grow at a CAGR of 30.96%, generating a revenue of USD 116.14 billion by 2030. The smartphone industry has been steadily developing and growing, both in terms of market size and models.
Geographical Outlook
By geography, Asia-Pacific accounted for the largest market share of around 43.78% in 2021. The APAC flexible display market size is expected to grow at a CAGR of 36.01% generating revenue of USD 100.82 billion by 2030.
Impact of covid-19
Due to the global shutdown, production of flexible displays fell precipitously in 2020 due to the global supply chain disruption. COVID-19 had an impact on the operations of not only flexible display manufacturers but also their suppliers and distributors.
In the short term, the failure of export shipments and poor domestic semiconductor demand compared to pre-COVID-19 levels are expected to impact negatively and slightly stagnant demand for semiconductor devices, affecting the flexible display market growth.
As a result of the ongoing COVID-19 outbreak, several major economies have been placed on lockdown. Sales of electronic products have been hampered, and supply networks have been disrupted. Furthermore, many economies are losing a significant amount of revenue due to manufacturing plant closures. As a result, the general scenario has hampered the demand for flexible displays in 2020.
Market Recovery Timeline and its Challenges
The market is expected to recover from mid of 2022 as people have made huge savings during the lockdown. The growing demand for high-quality pictures and the smart house is expected to drive the growth of the flexible display market.
However, the market faced challenges such as reduced workforce and delays in receiving components and materials. It caused an unexpected spike in panel pricing, with a month-to-month jump of more than 7%.
