Display Fab Equipment Savings
Fabs like AUO L4B, Samsung Display A2, and LG Display P8 have significantly lower production costs. The reason is that these fabs have fully depreciated equipment. Our Cost Model contains a list of all fabs with fully depreciated equipment. We removed the initial equipment cost. Our Cost Model includes the estimated site costs and fab maintenance cost.
The actual fab fixed costs are important because a supplier will try to recoup these expenses over the production lifecycle.
A panel supplier typically calculates, and then quotes, either a single fab or the supplier's total property, plant & equipment (PPE) into its internal sales model (regardless of the fab's actual lifecycle).
Depreciation can be 15% to 30%, or more, of the LCD and OLED bill of materials, respectively. We model each fab's cost because depreciation is such a large cost to display suppliers.