AMOLED displays are now cheaper to produce than LCD

ETNews citing market research firm IHS reports that the production cost of AMOLED display for mobile devices has become cheaper than that of LCD. For, reference AMOLED displays are thinner, power-efficient, have better contrast, don't have backlight and the lights come from the individual pixels.

According to IHS technology, the production cost of a 5-inch 1080p display was $14.30, and LCD panel costs $14.60 in Q1 2016. By comparison, in Q4 2015, the production costs  of AMOLED and LCD panels were $17.10 and $15.70 respectively. This shows that the prices of both the panels have gone down in Q1 2015, but AMOLED panels are now $0.30 lesser than LCD panels.

With the production cost of AMOLED going down than that of LCD, IHS forecasts that smartphone makers are likely to switch to AMOLED panels not just for the high-end smartphones, but also on the entry-level and mid-range smartphone offering as well. The reports adds that this may be due to high rate of operation, wide range of customers and end of depreciation of production lines.

The report also says that Samsung Display has expanded its operations of small and medium sized AMOLED panels since the second half of 2015. It has also secured major Chinese smartphone makers including Meizu and Oppo as customers, due to which the operation rate was increased to 95 percent. Samsung Display has also manages to stabilize yields during the early production phase, which has had a positive impact.With the prices falling down, Chinese smartphone makers are using AMOLED displays for not only their premium products, but also mid-range offering.

Industry analyst predict that smartphone manufacturers will quickly replace LCD panels with AMOLED panels, since the production cost of AMOLED and LTPS LCD have become similar.