“Conversely, product shipments will not keep pace with the demand. Shortages of key components, particularly OLED panels, will prevent device makers from putting more products on the shelves.”
As VR devices are a new kind of consumer electronic products, there are going to be manufacturing challenges. VR device makers and their component suppliers will have to work through issues related to yield rate and production capacity, so the supply of VR devices will be limited during their initial releases.
“The top three branded VR device vendors – HTC, Oculus and Sony – are all seeing high demand for their respective products, but they currently do not have the production capacity to match,” Tsai pointed out. “The three major vendors may face the unfortunate situation of not having enough products on stock to satisfy consumers during the peak sales season of November and December.”
The higher-than-expected demand for their products has spurred VR device vendors to expand their purchases of key components, including OLED panels. However, the increasing adoption of OLED displays in smartphones is squeezing the share of OLED panel supply for VR devices.
Google recently launched Daydream View, a VR viewer and controller package that works with compatible smartphones. The appearance of this type of hardware will also encourage smartphone makers to feature OLED displays on more of their products. In sum, TrendForce expects tight supply for VR-related components to persist over the next year or two.