The global capacity of liquid crystal displays (LCD) is likely to fall in 2023, a report showed Tuesday, as major South Korean display panel makers will exit from the business dominated by Chinese players.

Samsung Display Co. and LG Display Co. -- South Korea's top 2 players -- have announced they will scale down their LCD businesses, with the former pushing its migration to quantum-dot displays, while the latter expands its organic light-emitting diode production.

Such moves are expected to drag down the growth of LCD capacity in 2023, although it will begin recovering in the following year, according to market researcher Display Supply Chain Consultants (DSCC).

"We expect Samsung and LG to eventually shut down LCD capacity in Korea, which in 2020 accounted for 13 percent of total LCD capacity," DSCC said.

"Both Samsung and LG will hold onto their LCD capacity for longer than previously anticipated due to improved market conditions with Samsung shutting down all of its LCD capacity by the end of 2021 and LG expected to shut down all but P9 and AP3 (lines) by the end of 2022."

DSCC data showed the large-area LCD capacity is estimated to drop to 278 million square meters in 2023, down 1 percent from a year ago.

"As a result of the shutdowns, LCD capacity is expected to decline in 2023, which will temper price reductions, which should start in late 2021 or early 2022 as supply improves and component shortages end," DSCC said.

However, it projected the LCD capacity to grow after 2023 as Chinese manufacturers will take over shares from South Korean firms.

DSCC estimated LCD capacity growth of 5 percent in 2024 and 3 percent in 2025.

"Nearly all LCD manufacturers in China are investing in small expansions or new fabs in response to strong demand and rising prices," it said. "The new fabs expected to come online should boost capacity by 5 percent in 2024, which could result in another cycle of lower prices." (Yonhap)