“Prices for TV panels have remained relatively flat since last year, but smartphone panel prices have been continuously falling during the same period,” saidJimmy Kim, principal analyst and researcher for IHS.

“Growing numbers of panel makers are increasing their production allocations; however, in the current smartphone market, only mainstream and low-end products show any demand growth at all. Manufacturers are therefore looking at cost-saving measures to bolster their bottom lines.”

With smartphone panel prices falling, some panel makers are replacing low-temperature polysilicon substrates (LTPS) with oxide semiconductor substrates. Others are reducing costs by introducing multi-chip LED packages, RAM-less driver integrated circuits (ICs), composite optical sheets and other cost-effective component solutions.

Although panels for premium smartphones are becoming saturated, some panel makers are still expected to increase their capacity allocation for smartphone panels, since demand for mainstream and low-end products shows growth. This situation will, however, add pressure to lower prices for cost-competitive products.