IHS explained that the LCD panel requires a backlight module, but the AMOLED does not need a backlight module, and the material cost of the component is naturally reduced by a small amount. However, as the manufacturing cost of the AMOLED panel drops drastically, LCD manufacturers try to use the cheaper traditional amorphous Silicon panels reduce the use of low-temperature polysilicon panels (LTPS) of better quality and higher price to maintain cost competitiveness.
The latest cost analysis report from IHS shows a 30% cost gap between AMOLED and LCD panels for a 5.5 "high resolution full HD smart phone display.
IHS said that most AMOLED panels are currently manufactured at 5.5-generation fabs and LTPS LCDs are manufactured at 6-fabs. If AMOLED is manufactured at 6-generation fabs, the cost reduction will be Bigger