Omdia says that the rate of equipment depreciation at display fabs is accelerating, which means that production costs of OLED and LCD panels alike is on the decrease, enabling display makers to increase their profits.
Omdia says that depreciation will increase at a compound annual growth rate (CAGR) of 9.3% between 2021 and 2028, for LCD and OLED fab combined (see chart above), with the amount of fully depreciated global FPD manufacturing capacity nearly doubling over that period from approximately 160 million square meters to almost 300 million. This is the result of the slowness in FPD production fabs investment in recent years.
Lookin at the OLED industry specifically, Omdia sees LG's WOLED and SDC's QD-OLED fabs reaching almost full depreciation by 2028, which will enable both companies to achieve sustainable profitability in their large-area production units.
In a similar way, most 6-Gen mobile AMOLED lines will also transition from being less than 10% depreciated in 2021 to more than 60% by 2028.
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