The market for touch panels using currently available all touch technologies, such as projected capacitive, infrared (IR)/ optical, resistive, and surface acoustic wave (SAW), is estimated reach 1.8 billion units in 2014 in terms of volume, up 19.1% from 2013. It is forecast to grow to about 2.1 billion units in 2015, up 15.1% year-on-year, and to about 2.8 billion units in 2018.
The touch panel industry, which has sustained double- or even triple-digit growth in the recent years, is expected to start grow at a single-digit rate from 2017 as the smartphone and table PC markets near saturation and touch panel penetration rate into the personal computer market has fallen short of expectations.
The year 2014 has been a tough year for the touch panel industry, currently dominated by projected capacitive touch panels. Oversupply has remained severe, intensifying competition.
In results, profitability of touch panel makers has fallen across the board, leading a countless number of firms to post losses. Some have expanded their businesses or accelerated vertical integration to survive, while some others have been shifting their business focus to profit-oriented from business expansion. In 2015 as well, touch panel makers will likely continue to exert themselves to survive.
Entering 2014, the growth of the smartphone and tablet PC markets, which had fostered the development of the touch panel industry, has begun to slow. The market for high-end smartphones has contracted, whereas the market for low-end smartphones priced at $300 or lower has grown significantly.
In the tablet PC market, 8-inch or smaller products priced at $199 or lower have gained popularity, while 10.x-inch tablet PCs at $500 or higher seem to have stopped growing. Now, the virtuous cycle, in which the touch panel industry grows on the back of a rapid growth of the smartphone and tablet PC industry, seems to have ended.
Touch panel penetration rate in the notebook PC and all-in-one PC markets also fell short of expectations. However, it is a relief to witness that touch notebook PCs with the detachable form factor have been received well in the market.
It is time for conventional touch panel makers that have been hit hard by intense competition and the supply glut to aggressively defend their position in the touch panel market as traditional LCD panel makers are poised to overtake the market with display-integrated touch panels, such as LCD in-cells, LCD on-cells and AMOLED on-cells.
Unlike the slow growth of the smartphone, tablet PC, notebook PC, and AIO PC markets that have driven the growth of the touch panel industry, automotive and smartwatch-use touch panels have emerged as applications that will lead the sector going forward, suggesting that it is time to focus on developing touch panels optimized for the new applications.
