The display glass substrate market, which had suffered a prolonged slump, rebounded to post a record quarterly revenue. This result came as companies including U.S.-based Corning and Japan's Asahi Glass (AGC) and Nippon Electric Glass (NEG) maintained price-hike policies while adjusting output despite the TV market downturn. Changes in glass substrate prices also affect domestic display panel manufacturers that are grappling with a slump and price undercutting by Chinese corporations.
According to a recent report by market research firm Omdia on the 7th, global display glass substrate revenue in the third quarter came to 270 billion yen (about 2.5686 trillion won). It rose 5% from the previous quarter and 14% from a year earlier, hitting an all-time high. Display glass substrates are typically traded in Japanese yen.
Omdia analyzed that the latest rise in display glass substrate revenue stemmed from strategic shifts by major manufacturing corporations. The display glass substrate market went through a downturn in 2011 after large-scale production cuts of liquid crystal display (LCD) TV panels. In response, major display glass substrate companies entered a "chicken game" in 2012. A trend spread of offering lower prices to display panel corporations to defend market share. The chicken game among display glass substrate manufacturers continued through 2022, leaving the market in a slump for about a decade.
The oversupply of display glass substrates driven by price competition began to improve in 2023. Moving away from a stance of defending market share, manufacturers sought price stability by adjusting output to match shipments. Corning, the No. 1 company by market share, raised prices for all products by a uniform 20% in the third quarter of 2023. AGC and NEG also fully joined in price hikes starting last year, pushing display glass substrate prices up more than 25% over the past two years. According to Counterpoint Research and others, Corning, AGC, and NEG together account for more than 80% of the global display glass substrate market by area.
Buoyed by price increases through production control, Corning posted record revenue in the third quarter of this year. Revenue for the period rose 14% on-year to $4.27 billion (about 6.1158 trillion won). The operating margin also reached 19.6%, up 1.3 percentage points. Earnings per share (EPS) increased 24% to $0.67.
AGC likewise saw cumulative third-quarter revenue edge down 1.4% on-year to 1.5342 trillion yen (about 14.6003 trillion won), but cumulative operating profit rose 0.9% to 94.8 billion yen (about 902.2 billion won), improving profitability.
Tadashi Uno, a research manager at Omdia, said, "Major glass substrate manufacturing corporations appear to be focusing on generating revenue now as a strategy to raise funds for new businesses," noting, "These companies are developing new glass technologies that can be used in the semiconductor field, such as through-glass via (TGV), semiconductor support glass, and hard disk substrates."
Price changes in glass substrates, a key raw material for panels, affect the profitability of LG Display and Samsung Display as well as Chinese companies such as CSOT and BOE. According to the display industry, NEG is known to mainly supply products to LG Display, AGC to CSOT, and Corning to Samsung Electronics and BOE.
The impact of changes in display glass substrate prices is expected to be greater for Chinese companies than for Korea. This is because more glass substrates are required for LCD panels than for large organic light-emitting diode (OLED) panels mainly used for TVs. Samsung Display exited large LCD panel production entirely in 2020, and LG Display did so in April this year, restructuring their businesses around OLED.
A researcher at a market research firm who requested anonymity said, "OLED panels, which domestic display corporations are focusing on, often use plastic-based products and thus rely less on glass substrates than traditional LCDs," adding, "Chinese companies centered on LCD panels will be more affected by changes in display glass substrate prices." The researcher added, "As large-scale investments are also being made in China in manufacturing display glass substrates of 8th generation and above, import dependence is likely to decline noticeably over three to seven years."