According to Omdia's analysis, the flat panel display (FPD) glass substrate market is expected to encounter significant supply constraints in 2025. Traditionally, major glass substrate suppliers such as Corning, AGC and NEG have focused more on market share growth in the fierce market competition. However, rising energy costs and continued pressure on glass substrate prices in recent years have prompted these companies to turn to strategic adjustments to improve profitability.
The production process of glass substrates is highly energy-intensive, requiring materials to be heated to more than 1000 degrees Celsius for melting, resulting in energy costs accounting for more than half of the total production costs. With the increase in energy costs and the decline in product prices, corporate profits have been severely affected. As a result, major glass substrate manufacturers have raised prices by more than 10% in the second half of 2023 and the second half of 2024, respectively, to cope with rising energy costs.
In the past, glass substrate manufacturers usually maintained inventory levels of more than two months to cope with potential disruptions, such as furnace damage, which may take months to recover. However, in order to protect profit margins, manufacturers have adjusted production plans based on shipments over the past five years, resulting in lower existing inventory levels.
In November 2024, a fire accident occurred at a large glass substrate manufacturer, further exacerbating the supply shortage problem in the FPD glass substrate market. It is expected that by 2025, the demand growth of glass substrates will exceed the rate of capacity expansion, especially in the second and third quarters, and the tight supply situation will be particularly prominent.
At the same time, glass substrate manufacturers in mainland China are increasing investment in new furnace facilities and offering products at lower prices than global leading manufacturers. This strategy is expected to help them win more market share in 2025.
"Given that the supply and demand relationship is expected to remain tight in 2025, FPD glass substrate manufacturers may raise prices again this year." Tadashi Uno, display research manager at Omdia, pointed out, "Market revenue is expected to increase by 15% from US$6.12 billion in 2024 to US$7.05 billion in 2025."
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