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Market value for hinges in foldable OLED smartphones to surpass $500 mn

Annual global shipments of foldable smartphones are projected to climb from around 12.8 million units for 2022 to around 18.5 million units for 2023, says TrendForce in its latest report on the market for OLED displays. Among the key components for a foldable smartphone, hinges play a critical role in determining the cost of the whole device. In a foldable smartphone, hinges are responsible for the durability or flex life of the foldable display, the visibility of the fold crease on the display, the feel of flipping the device, and many other functions that are vital to user experience. In other words, the quality of hinges will directly affect consumers’ willingness to purchase a foldable smartphone. With the penetration rate of foldable models rising in the smartphone market, the value of the global market for hinges used in foldable OLED smartphones will rise by 14.6% YoY to above the level of US$500 million for 2023.

Currently, the designs of the hinges used in foldable smartphones fall under two main categories: teardrop-shaped and U-shaped. The former contains many complex parts and costs several times higher than the latter. As the penetration rate of foldable models rises, TrendForce believes cost pressure will be the foremost issue facing smartphone brands that have adopted teardrop-shaped hinge.

Advances in Hinge Design Are Instrumental in Driving Sales of Foldable Smartphones, and U-Shaped Hinge Has Majority Market Share
Looking at the distribution of the foldable smartphone market by brand, Samsung that relies on U-shaped hinges had the largest market share of 82% in 2022. Samsung’s main suppliers for foldable smartphone hinges include KH Vatech and S-connect. Going forward, Samsung will diversify its hinge suppliers in order to further cut costs. Other smartphone brands have adopted teardrop-shaped hinges, and their collective market share for foldable models came to almost 20% in 2022. Suppliers for teardrop-shaped hinges include Amphenol and Asia Vital Components (AVC).

TrendForce’s analysis finds that the three major aspects of hinge design is allowable screen perimeter, balance of stress, and material composition. From consumers’ perspective, allowable screen perimeter affects the depth of the fold crease, balance of stress affects the opening and closing of the device, and material composition affects the weight of the device. Fold crease is the issue that is most brought up by users of foldable devices. TrendForce points out that the display of a foldable smartphone does not actually completely fold flat when closed. Based on the hinge design, the foldable display will either turn into a “U” or a shape resembling a water droplet. The most notable difference between U-shaped and teardrop-shaped hinges is the allowable screen perimeter and the crease effect. Given the same thickness of the device, teardrop-shaped hinge has a larger allowable screen perimeter than U-shaped hinge, and the corresponding crease is less visible.

Balance of stress is the design factor that affects the durability of the hinge (as expressed in the number of folding and unfolding sequences) and the smoothness of the opening and closing actions. The parts of a hinge have to be assembled in a way that balances out the various forces of a folding or unfolding action, thereby minimizing wear and tear. As for material composition, foldable smartphone hinges have complex parts that significantly add to the weight and assembly cost. The hinges for the earlier generations of foldable smartphones were made from stainless steel (SUS) using a metal injection molding (MIM) process. Later on, smartphone brands adopted aerospace materials that contain rare and expensive metals. Lately, there has been a switch to carbon fiber composites. Besides simplifying hinge designs, smartphone brands have also been seeking light and strong composite materials in order to further lower the device weight.

With regard to the foldable smartphones that are now on the market, the “ultra-slim” Mix Fold 2 that was recently released by Xiaomi has created a significant buzz. With a thickness of just 11.2mm when folded, the Mix Fold 2 features a carbon fiber composite that offers a substantial improvement in terms of grip and feel. Subsequently, other brands have also followed suit and adopted the same kind of material. Examples include HONOR’s Magic Vs and OPPO’s Find N2. The hinges of the Magic Vs are also noted for embracing a mortise-and-tenon structure that is made using a one-piece molding process. This design reduces the number of hinge parts and further narrows the weight difference between foldable and non-foldable smartphones.

Apart from smartphone brands, panel makers have also gotten involved in the development of foldable smartphone hinges. For instance, CSOT has unveiled a “semi-set” production flow that integrates integrates an OLED display module with the required hinges, thereby resulting in a one-piece component. Panel makers hope that with this kind of solution, they will be able to confirm with smartphone brands about the form factor and design of the foldable display early on during the course of device development. This, in turn, will accelerate the product development cycle and ensure that the device is fully optimized in terms of lifespan and performance.

Smartphone Brands’ Strategies for Foldable Device Market
A survey of the various solutions for foldable smartphone hinges reveals that Samsung has stayed with the U-shaped, single-axis design for its Galaxy Z Fold series. A torque module was introduced with the Z Fold 2, and it enables the device to stay open or flex at different angles. Also, for the Z Fold series, Samsung uses hinges that are made with a process involving MIM and computer numerical control (CNC). In other words, parts are mainly made with precision machining and fit together through precision assembling. Even though consumers do care about crease, Samsung does not focus too much on this particular issue. Instead, it concentrates its efforts on simplifying the hinge design. Cutting down the number of parts and raising the number of Tier-2 outsourcing partners will save costs. At the same time, the aim of creating a lighter device can be achieved.

The outstanding issues that have yet to be effectively resolved in the development of foldable smartphones are the inability of the device to fully close and the notable body thickness. Nevertheless, TrendForce believes that Samsung will continue to work on U-shaped hinges because it wants to lower costs while maintaining a healthy profit margin for its foldable smartphones. With this approach, Samsung can make foldable models more popular and capture a large slice of market share for this type of product in the low-end segment.

As for other smartphone brands that are more concerned about user experience, their development efforts will center on the teardrop-shaped, dual-axis design that requires many more complex parts and costly metallic materials for support (e.g., “liquid metals” and other materials that are usually reserved for aerospace applications). In addition to the high manufacturing cost, there is also the substantial weight that teardrop-shaped hinges add to the device. Currently, there is no effective way to resolve the weight problem. Nevertheless, teardrop-shaped hinge is a design concept that mainly addresses the issue of the fold crease and presently serves as a feature that helps further segment the market for foldable smartphones (i.e., high-end ones with teardrop-shaped hinges versus those with U-shaped hinges in the lower range).

At CES 2023, the well-known smartphone brands showed off various concept devices featuring foldable displays. For instance, there were models that leverage foldability and stretchability to expand screen size. This would allow adjustments in screen size and aspect ratio for different use scenarios while maintaining the same device form factor. In the future, the introduction of new kinds of products such as foldable ones could lead to a reshuffling of the smartphone market and radical changes in product positioning strategy across the all price segments, from the high-end to the lower range.

CT Bureau

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