Display suppliers are embracing the automotive display system business as a key revenue stream

Owing to the stagnant production of light vehicles and the steady shipment volumes of automotive display panels, carmakers and panel suppliers are actively pursuing growth by focusing on technological innovation, enhancing features and applications, adopting new business models and supply chain strategies. Since 2016, major automotive manufacturers, including, GM, Ford, BMW, VW, and Stellantis, have initiated direct dealings with panel suppliers in anticipation of an increasing demand for instrument cluster and center stack displays while looking for cost reduction and display technology innovations. 

According to Omdia’s display panel cost models and teardown services, panel suppliers efficiently manage costs and resources for crucial components. The FOG (cell with a driver IC) with touch represents approximately 70% of the total panel module cost, while the FIDM (fully integrated display module, which includes the panel module with touch, cover, and PCBA) accounts for about 80% of the total display module cost. Control over AMOLED and Micro LED technology resources remains predominantly with panel manufacturers, leaving Tier 1 suppliers responsible for system integration.

Traditional automotive display panel manufacturers are under pressure to meet the price and performance requests from automakers, experiencing intense competition from new entrants such as BOE, China Star, and HKC. These new players have significantly disrupted the market with their competitive pricing and shipping in FOG (flexible printed circuit on glass, which is a cell without backlighting but includes a driver IC) mode. 

For instance, BOE entered the automotive display market following its acquisition of Varitronix in 2016. China Star started producing its LTPS LCD FOG for automotive applications in 2018, and HKC entered the market toward the end of 2019. In response to the rapid price erosion and diminishing profits, established panel suppliers such as Innolux, Sharp, AUO, and Tianma have expanded their operations into Tier 1 business since 2019, achieving several notable successes. This influx of new entrants has not only intensified the competition but also spurred innovation and forced traditional players to adapt and expand their offerings.

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