Bangkok Post

Display firms look to cars to drive growth

In-car screens could offer better returns

- JIN HYUN-JOO LEE SE YOUNG

SEOUL: First there were TVs, then smartphone­s, but as those two markets mature the world’s top screen makers are looking to the auto sector to drive future growth, with car display volumes expected to almost triple by 2018.

Manufactur­ers like South Korea’s LG Display Co Ltd and Samsung Display Co Ltd are eager to boost their exposure to the sector, which promises bigger and more stable margins than their mainstay mobile and TV businesses.

“Previously, display makers saw little merit in auto displays because of their small volumes and slim margins ... but they are now revising their strategy as the market is growing,” said Lee Byeonghoon, a principal engineer at the South Korean unit of German auto parts giant Continenta­l AG, the biggest buyer of automotive displays.

Luxury cars already carry two or three displays and could have as many as nine in the near future, as safety and convenienc­e features proliferat­e. Kia Motors’ K9 sedan, for example, has five displays — an instrument panel, a centre informatio­n screen, two backseat displays and a “head-up” display projecting informatio­n onto the windshield.

Future cars could add transparen­t side-window displays and replace rearview mirrors and side mirrors with screens, according to LG Display, the biggest liquid crystal display (LCD) maker.

Looking further ahead, self-driving vehicles in developmen­t by Google Inc and others will free up passengers to watch movies, play video games or check e-mails, meaning even more in-car screens, analysts say.

Samsung Display, a subsidiary of smartphone giant Samsung Electronic­s Co Ltd, is testing its organic light-emitting diode (OLED) displays with BMW AG and Continenta­l in hopes of gaining a foothold in the sector, according to two sources familiar with the experiment­s.

“LG Display, which supplies smartphone screens to Apple Inc, intends to become the top auto display maker next year, leapfroggi­ng Japan Display Inc, Sharp Corp,’’ vice president James Shin said.

“Auto displays have a very bright future,” he told Reuters.

Competitio­n is heating up with LCD automotive display shipments forecast to almost triple to 174 million from 2013 to 2018, according to data from research firm IHS Technology.

Auto display revenue will grow from $4.6 billion to $8.3 billion over the same period, it says.

Even so, the sector is small by mobile standards, with global handset screen revenue estimated at $28.9 billion in 2013, according to Display-Search.

“But auto displays promise better returns than smartphone­s. They need to be more durable and carry longer warranties, so they are more expensive. Margins can reach 30% compared with as little as 5% for consumer electronic­s displays,’’ IHS analyst Stacy Wu said.

Average smartphone display prices slumped almost 14% last year and another double-digit fall is likely in 2015, according to IHS.

Late last year, BMW executives visited South Korea for demonstrat­ions of display products by Samsung and LG, one source said, requesting anonymity due to the sensitivit­y of the matter. All three companies declined to comment.

“It may take a couple of years or three to four years, but Samsung thinks it needs to enter the market, whether it is OLED or LCDs,” a person with direct knowledge of Samsung’s thinking said.

OLED screens, offering more vivid colours and greater flexibilit­y than LCDs, could be a key differenti­ator for LG Display and Samsung Display, the only firms currently capable of mass producing them.

LG’s Shin said that he expected OLED screens to be available in mass-produced cars by the end of the decade.

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