Smartphone Display with Notch Design Estimated to Cost 20% More

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Notch design of smartphone displays is estimated to raise manufacturing cost of display panels by more than 20%, according to IHS Markit.

According to the OLED Display Cost Model by IHS Markit, manufacturing cost of the 5.9-inch organic light-emitting diode (OLED) panel with notch design, as in the Apple iPhone X, is estimated to be $29. It is found to be 25% higher than manufacturing cost of full-display OLED panel without the notch design used in the 5.8-inch display for the Samsung Galaxy S9. Similar cost gap is also found in the thin-film transistor liquid crystal display (TFT-LCD). Manufacturing cost of a 6-inch notch TFT-LCD panel is estimated to be $19, 20% higher than similar-sized non-notch, full-display LCD panel.

“Notch cutting should accompany yield loss, resulting in increases in manufacturing cost. In case of TFT-LCD, a notch design may push up the manufacturing cost even to the level of rigid, full-screen OLED’s,” said Jimmy Kim, Ph.D. and senior principal analyst for display materials at IHS Markit. “For OLED panels, cost increase caused by notch design seems to be even higher.”

Quarterly shipments of the iPhone X, Apple’s first smartphone model using OLED panels, have reportedly been smaller than previous iPhone models’ so far, mainly due to higher selling price, caused by expensive OLED panels. “Apple seems to be in the middle of manufacturing optimization,” Kim said.

“Eventually, manufacturing cost for notch OLED will fall more rapidly than that for notch TFT-LCD. The plastic substrate for OLED is not as brittle as glass used in TFT-LCD, so it should be easier to cut the notch, theoretically.”

The OLED Display Cost Model by IHS Markit includes manufacturing cost analysis and forecasts of OLED display panels in mass production for smartwatch, smartphone, tablet PC and TV.

About IHS Markit

IHS Markit is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions.