Corning’s Lotus NXT Glass To Grow On Declining Panel Prices, Higher Resolution

Corning (NYSE:GLW) recently launched the Lotus NXT Glass, its newest installment of display glass for LCDs and OLEDs and third generation of its Lotus Glass products. ^[1] The glass holds properties that allow for better viewing pleasure for consumers and lower costs for panel manufacturers. Given the pressure on panel manufacturers to reduce their prices and increasing popularity of higher resolution displays, we believe that Corning’s Lotus NXT Glass could see high demand.

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Declining Panel Prices Present Growth Opportunity For Lotus NXT

The smartphone market has become increasingly competitive leading to price wars between various manufacturers. Manufacturers are frequently introducing lower priced products in order to gain market share, thereby bringing down the average price of smartphones. In order to remain profitable at these low prices, manufacturers have to rely on reducing costs. As a result, they pressure their suppliers to reduce prices.

The average price of smartphone display panels declined from $22 per module in 2013 to $19 in 2014, a decline of around 14% year-on-year. According to IHS’ forecast, this will further decline to $17 per module in 2015, as a result of better bargaining power of smartphone manufacturers and excess capacity at display panel manufacturers.  ^[2] If these steep declines continue, smartphone display panel manufacturers could report losses.

Corning’s Lotus NXT Glass could help panel manufacturers during these times. The company claims that Lotus NXT Glass can improve assembly yields by 1.5%. This should lead to lower costs for panel manufacturers. At a time when panel prices are likely to dip, panel manufacturers will most likely find Lotus NXT Glass an attractive option to sustain their bottom line.

Growing Demand For Higher Resolution Displays Could Help Lotus NXT

Consumers nowadays demand higher-resolution displays and longer battery life in their smartphones, tablets and notebooks. Display panel manufacturers are therefore increasingly moving to low-temperature polysilicon (LTPS) or oxide thin-film transistor (TFT) backplanes in order to deliver higher resolution displays and with low power requirements, as non-crystalline thin-film silicon cannot yield such characteristics. However, these technologies involve vast changes in temperatures, which lead to wide movements in the display glass, which is problematic since it won’t align with the backplanes.

Corning’s Lotus NXT boasts 60% less movement when processed under high or low temperatures. This means that it is more likely to align with LTPS and oxide TFT backplanes, thereby reducing wastage and costs. Since the Lotus NXT is more suitable for these fast growing backplane technologies, it will most likely see higher demand. According to IHS, LTPS TFT LCD and oxide TFT LCD panel shipments will increase 33% in 2015. ^[3]

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1. Corning Introduces Corning Lotus™ NXT Glass, June 1, 2015, Corning’s News Release [↩]
2. Smartphone Display Manufacturers Facing Pressure to Further Reduce Prices in 2015, February 2, 2015, DisplaySearch [↩]
3. Smartphones Spur Shift in Small/Medium Display Panel Demand, May 18, 2015, DisplaySearch [↩]