Navigating Innovations and Trends in Automotive Displays and HMI

Abstract

THE AUTOMOTIVE SECTOR IS EXPERIENCING A PARADIGM shift propelled by the expansion of electric vehicle (EV) manufacturers based in China, the transition to software-defined vehicles (SDVs), and the pursuit of smart mobility solutions. This transformative era is further fueled by shifting consumer behaviors and aging, geopolitical tension, along with rapid advancements in artificial intelligence (AI). Central to this evolution is the need for advanced display technologies and human-machine interface (HMI) innovations. These developments are redefining the aesthetics and functionality of vehicle interiors and exteriors and reshaping the industry's competitive landscape and business strategies.

At the same time, the global automotive market is navigating challenges characterized by economic uncertainties. Intense competition from Chinese automakers is driving aggressive price wars, forcing global suppliers to rethink and adapt strategies. This competitive landscape places substantial pressure on the automotive display industry, compelling companies to adapt quickly to maintain their market position and competitive edge (Fig. 1). The strategies that emerge in response to these pressures will play a critical role in shaping the development and future trajectory of automotive display technologies.

According to Omdia's Automotive Display Intelligence Service, automobile panel shipments in 2024 are projected to reach 232 million units, reflecting a 6.3 percent year-on-year (YoY) growth (Fig. 2). This positive outlook comes despite an anticipated slight decline of 0.8 percent YoY in light vehicle production, mainly because of inventory corrections. These adjustments could lead to lower panel shipment growth in 2025, with forecasts indicating that inventory corrections may slow the market.

Examining specific application markets, instrument cluster displays and center stack displays are expected to see steady growth rates of approximately 4–8 percent YoY in 2024. However, this momentum is projected to slow in 2025, with growth rates dropping to around 0–1 percent YoY because of potential market saturation and continued inventory adjustments. Notably, the control panel and aftermarket segments showed weakness, with negative growth trends in 2024. Yet, aftermarket shipments are anticipated to recover in 2025, supported by the increased output of Chinese Gen 8.6 fabs, which are expanding capacity significantly.

Emerging automotive display segments, such as head-up displays (HUDs), passenger displays, and digital rearview mirrors, experienced robust double-digit growth in 2024, driven by higher installation rates in Chinese EV models. The shift toward minimalist cockpits, which reduce reliance on traditional instrument clusters and boost the demand for HUDs, is led by manufacturers such as Xpeng and Nio. This design approach emphasizes streamlined, information-rich center stack displays, offering a modern, sleek, and stylish look while helping carmakers reduce costs through efficient design solutions. Digital rearview mirrors are becoming affordable, value-added features for Chinese EVs, providing a competitive edge by enhancing functionality without significantly raising production expenses. Passenger displays also are gaining traction as they cater to consumer expectations for comfort, connectivity, and innovation.

Low-temperature polysilicon (LTPS) LCD has solidified its position as the mainstream technology for automotive displays thanks to its balanced performance, cost-effectiveness, and seamless in-cell touch integration, particularly in center stack displays (Fig. 3). In 2024, LTPS LCD was projected to comprise more than 30 percent of total display shipments, surpassing 40 percent in the center stack segment alone. Nonetheless, EV strategy shifts, high costs, and supply chain challenges are delaying the adoption of advanced technology.

Despite experiencing double-digit growth compared to 2023, OLED is projected to account for only about 1 percent of total shipments in 2024. This modest share stems from model delays and a strategic shift by automakers favoring more affordable LCD options. Although OLED faces ongoing challenges, it is projected to become mainstream in premium vehicle models, potentially surpassing a 5 percent market share by 2028. Continuous improvements in brightness and lifespan will fuel this growth thanks to tandem structures and material enhancements. Additionally, the end of depreciation periods for Gen 6 OLED fabs and the introduction of new Gen 8.6 OLED fabs will boost production capacity and lower depreciation costs for midsized active-matrix OLEDS (AMOLEDs).

Following the dominance of the LTPS LCD, the full-array local dimming (FALD) LCD is expected to emerge as the next major advancement in thin-film transistor (TFT) LCD technology. However, like the challenges faced by OLED, automakers are reconsidering their display technology strategies and delaying the adoption of advanced features because of obstacles such as evolving EV strategies and high production and implementation costs. Introducing chip-on-board (COB) technology for center stack display usage may enhance the competitiveness of FALD LCDs. Paired with quantum-dot (QD) film technology, COB already has gained traction in the TV industry. While QD films historically have had reliability issues, particularly in high-temperature environments essential for automotive use, recent improvements have alleviated these concerns. Moreover, significant progress has been made in reducing the costs of LED chips and drivers and integrating in-cell touch function with local dimming technologies with thinner form factors, positioning COB-based FALD LCDs as a more economical alternative to OLED displays. COB-based FALD LCDs also offer 30–50 percent power savings for larger screens than their edge counterparts (over-edge-type LCDs) and provide the high luminance and strong contrast ratios necessary for HUDs—performance levels that OLEDs often struggle to achieve.

After a limited launch in TVs and delays in wearables, the microLED industry is showing promise in the automotive sector (Fig. 4). Compared to LCDs, OLEDs, and QLEDs, microLED offers unparalleled design freedom, characterized by superior luminance, versatility, and seamless integration. This technology is set to transform automotive design with innovative features such as transparent panels, immersive dashboards, hidden displays, and stretchable displays that elevate the user experience. Its exceptional optics and durability make microLED ideal for interior and exterior applications. Exterior features, such as interactive front grills, benefit from its adaptive capabilities, enhancing safety and communication through dynamic, real-time visual outputs.

However, key challenges must be addressed for microLED to achieve broad adoption in automotive displays. Ensuring consistent color calibration and display homogeneity are complex because of the mass transfer process, which may cause visual inconsistencies. Additionally, optimizing contrast and managing reflections is critical for high display quality in various lighting conditions.

Current manufacturing processes also lead to pixel defects, which raise costs and limit scalability. Overcoming these hurdles is vital for microLED to transition from concept to mainstream use, especially in electric and autonomous vehicles. Initial adoption is anticipated in 2026, with broader applications in luxury infotainment systems and exterior displays expected by 2028, driven by its high brightness and transparency.

Chinese automotive display suppliers have rapidly expanded their presence in the global market, capturing 52 percent of the market share in the first half of 2024, up from only 5.1 percent in 2014 (Fig. 5). This growth primarily is concentrated in amorphous silicon (a-Si) LCD technology, but Chinese manufacturers also are making notable inroads in LTPS LCD and OLED markets, surpassing a 25 percent share in these segments. Chinese panel manufacturers’ aggressive expansion strategies, driven by large capacity investments and competitive pricing, have created substantial shifts in global market dynamics, intensifying competition and reshaping industry standards.

The rapid expansion of Gen 8.x LCD capacity in China has flooded the market, forcing smaller and older LCD fabs to shut down, including facilities in Taiwan, Japan, and South Korea. This overcapacity makes it increasingly difficult to cater to low-volume, customized products such as control panels, which often have unique specifications. As a result, control panel shipments are declining, and commoditization of panel sizes has accelerated price erosion. The steady drop in prices restricts carmakers’ ability to differentiate through design, as they often are left with standardized, cost-driven display options rather than customized solutions that reflect their brand identity (Fig. 6).

The rapid expansion of LCD capacity in China has led to market oversupply, resulting in significant declines in panel pricing. In response to these shifts, panel suppliers are transitioning their strategies and moving from unit shipment growth to revenue growth by evolving into advanced display technology and as Tier 1 suppliers. This strategic shift has driven panel suppliers to increasingly focus on the automotive sector as a key revenue driver. For example, Innolux, despite having a smaller shipment volume, leads in revenue by producing fully integrated display modules (FIDM) and complete sets, which accounted for approximately 30 percent of its total corporate revenue in 2023. These fully laminated display solutions add value and quality, making them attractive to carmakers seeking cost-effective, simplified procurement processes. Similarly, LG Display and AUO have quickly adapted by incorporating in-cell LTPS LCD, FALD LCD, and OLED technologies to diversify their offerings and boost revenue.

Innolux, AUO, BOE, and Tianma exemplify the shift toward Tier 1 integration to enhance value for automakers. Innolux, through its CarUX subsidiary, focuses on high-value display modules and complete systems, positioning itself as a direct supplier to automakers. AUO has reinforced its Tier 1 role by acquiring BHTC, enabling it to offer comprehensive cockpit solutions that combine display and HMI functionality and meet the demand for smart, fully integrated cockpits. BOE is leveraging its production capacity and technology investments for strategic partnerships, and Tianma provides tailored display solutions from panels to integrated modules. These suppliers are attractive to carmakers not only for their advanced technologies but also for their expertise in display module integrations and production costs.

The COVID-19 pandemic underscored the vulnerabilities in global automotive supply chains, particularly the risks of over-reliance on a single region. Currently, most automotive display production—including array, module, and system assembly—is concentrated in China. Amid rising geopolitical tensions, carmakers are prioritizing supply chain resilience and diversification strategies. This shift has prompted a “China+N” approach, where manufacturers seek to balance costs and reduce dependency on China by expanding production to alternative locations. Initially, Mexico emerged as a favored alternative, but the focus has been redirected toward Southeast Asia in countries such as Vietnam and potentially Thailand. Nonetheless, achieving full independence from China remains challenging, with only LG Display and Sharp currently being able to operate entirely outside of China.

The smart mobility era is transforming the automotive industry from a hardware-centric model to a software-driven ecosystem. Traditionally reliant on fixed hardware, vehicles now are evolving with SDV technology, enabling original equipment manufacturers (OEMs) to enhance and personalize user experiences via over-the-air (OTA) updates. This adaptability enables OEMs to deploy new features, improve performance, and extend functionality long after the initial sale, meeting consumer demand for tech-forward, customizable vehicles and creating ongoing revenue streams through subscriptions and software enhancements.

Green transformation (GX), driven by electrification, further reshapes the value chain by prioritizing sustainable, energy-efficient solutions and altering the automotive electric and electronic (E/E) architecture. Service-oriented architecture enables component reuse, enhancing engineering efficiency. To navigate these shifts, OEMs are partnering with technology and semiconductor firms to integrate advanced systems and in-cabin AI, embracing co-creation, new processes, and business models to thrive in a landscape focused on agility, partnerships, and customer-centric design.

The transition to SDVs has placed unique demands on the automotive display industry, which now must cater to evolving design languages that accommodate greater levels of interactivity, customization, and safety (Fig. 7). Displays have become an integral part of the car's user interface, enhancing both the driver's experience and the vehicle's aesthetic appeal. They are expected to serve multiple roles, from infotainment hubs to control centers and safety tools. This shift requires a redesign in how displays are integrated, aiming for flexibility, modularity, and synergy with other in-car technologies.

To support this paradigm, the automotive display industry is focusing on several key requirements and applications to meet the demands of smart mobility. For instance, displays need to provide rich information while minimizing driver distraction, which has led to innovations such as HUDs that keep drivers’ eyes on the road. Similarly, there is a growing emphasis on integrating in-cabin AI, which can analyze driver behavior, manage information delivery, and enhance the overall user experience. Some displays can support external communication, such as alerting pedestrians and other vehicles—a valued feature for autonomous driving and smart city environments.

HUDs are designed to reduce driver distraction by displaying essential information, such as speed and navigation, directly within the driver's line of sight. Advances such as augmented reality (AR) HUDs overlay real-world objects with virtual information, aiding in navigation and alerting drivers to hazards. These displays are critical as we move toward an advanced driver assistance system (ADAS) Level 2+ and beyond, where the vehicle's system assists with control and intelligent awareness while the driver maintains responsibility. Currently, TFT LCDs are still the mainstream technology for traditional windshield HUD, such as the upcoming Panoramic HUD and AR-lite HUD. Digital light-processing projectors with in-plan holographic optical elements are emerging as an additional way to provide a holographic HUD.

Driver distraction also can be reduced through multimodal, intelligent displays that seamlessly integrate with the vehicle's systems. Multimodal user interfaces allow drivers to control displays using voice, touch, and even knobs and buttons, minimizing the need to divert attention from the road. Switchable privacy allows passengers to view private content while drivers focus solely on driving-related information, and dual-view screens enable different viewing angles so drivers and passengers can view different content simultaneously, further enhancing the in-car experience without compromising safety.

The integration of exterior communication displays exemplifies the industry's response to the need for enhanced safety and interactivity in smart mobility contexts. Interactive displays on the front grill or rear lights communicate with other vehicles, pedestrians, and the surrounding environment. Intelligent adaptive headlights and door projection lights are additional advancements that enhance visibility, safety, and personalization for both drivers and onlookers.

Camera integration into displays is key for safety and personalization in smart mobility, supporting features such as driver monitoring and biometric authentication. These integrated solutions enhance ADAS, allowing vehicles to respond to drivers’ states, such as fatigue, to prevent accidents. LCDs use notches or holes for cameras, which are costly and lack under-display capability. OLEDs allow under-display integration with high transparency but face quality issues such as diffraction artifacts. MicroLED, with its high transparency and large aperture, is ideal for under-display cameras but remains costly with yield challenges.

The expanding role of Chinese OEMs, Tier 1 suppliers, and panel makers is reshaping the automotive display industry, with a primary focus on the market share they may capture. Monitoring government policies, such as tariffs, subsidies, and regulations, will be essential to understanding how Chinese supply chains can meet the rising global demand for automotive displays and influence the industry's direction. Additionally, how global carmakers adapt their display procurement strategies, both locally and internationally, to remain competitive and leverage emerging technologies will be key trends to watch in this evolving landscape.

As automotive GX addresses carbon neutrality and environmental sustainability, digital transformation (DX) focuses on SDVs and automated driving and will reshape the mobility ecosystem. OEMs increasingly will focus on display systems to meet evolving user needs; this shift includes moving from ownership models to mobility as a service (e.g., robotaxis, Uber), with an emphasis on user experience over basic functionality.

Developing new core competencies is critical in this changing landscape. The pace of display technology adoption will depend not only on cost, but also on the value it brings to specific user scenarios. Success will hinge on adapting display systems to meet user demands and future-proofing these systems for long-term competitiveness.