The polarizer market is expected to increase by 0.9% in 2015 to $10.4 billion from a year earlier and grow at a compound annual growth rate (CAGR) of 0.8% until 2019. In area, the market is expected to expand 7.5% in 2015 year on year to cover 428.5 million square meters and grow at a CAGR of 5% to exceed 500 million square meters in 2019. The growth in area owes to increasing demand for high-end TVs such as ultra high-definition (UHD) TVs; the Brazilian government’s subsidies for digital TV sets and converters as part of the analogue-to-digital transition; as well as preference of bigger-sized smart devices. In the previous IHS report issued in the second half of 2014, the fall in the average price of polarizers was forecast to slow because of growing demand for panels, especially large TV panels, and tight polarizer production capacity, which could lead the market to grow at a CAGR of 4% until 2018 in value.
Production capacity of polarizers remained tight in the second half of 2014, leading polarizer suppliers to operate their fabrication lines at full capacity. Encouraged by improvement in sales and profit, several polarizer makers including LG Chem Ltd., Samsung SDI Co., Chimei Materials Technology Corp. (CMMT), SAPO Photoelectric Co. (SAPO), and Sunnypol Optoelectronics Co. (Sunnypol) announced to start to run new production lines in 2016. Their ramp-up should help ease the supply shortage. However, market conditions do not always pan out as planned. If panel demand does not keep up with expectations and other companies join the race to beef up their capacity, the market could run into oversupply. As such supply glut could fan downward spiral in polarizer film prices, the industry needs discretion in market strategy and analysis.
Unlike other parts, polarizers require huge investment. New investment from 2016 will be made mostly in China. Factory sites and construction all would require enormous initial capital and reserve for depreciation. If supply outnumbers demand and prices turn softer, depreciation would inevitably hamper efforts to maintain productivity competitiveness through cost control. If price competition becomes fierce, many companies inevitably would have to face direct competition with market leaders Nitto Denko Corp., LG Chem, and Sumitomo Chemical Co. The industry is advised to wisely predict the panel market in 2016 and 2017 and draw up measures to sustain price competitiveness.
In the sub-film category, more panels are shifting to highly durable acryl and cycloolefin polymer (COP) films due to the robust open-cell business. Employment of polarizers using polyethylene terephthalate (PET) films produced by Samsung SDI is also growing. An increase in adoption of in-plain switch (IPS) mode and the start of adoption of ultra-thin resin-type poly-vinyl alcohol (PVA) polarizers by Nitto will likely bring about big changes in the polarizer sub-film market. In order to help the industry participants cope well with the ups and downs of the industry, IHS issued the “Polarizer & Optical Films Market Tracker – H1 2015” that provides forecasts for the polarizer market from 2014 to 2019 as well as production line status by manufacturer, supply chain, and price trends. It also tried to enhance understanding of the polarizer market in which competition of high value-added film production has begun in full scale, through an analysis of optical sub-films, such as tri-acetyl cellulose (TAC), PVA, PET protection, release, anti-reflection, and compensation films.