What is the expected growth rate of Photronics' business in China in 2021
w FPD measuring tools that will be installed during 2021. These will bring us additional capacity to serve our customers who manufacture advanced panels. These investments should provide us with sequential growth in capacity, and therefore, revenue during the second half of 2021. As stated before, we have entered into three multi-year purchase agreements that collectively represent a business commitment in excess of $40 million annually to support these investments.
We often comment that the display market is very dynamic. This includes development and adoption of new technologies. The increased penetration of AMOLED displays within smart phones is one example, as manufacturers compact -- combat rather plateauing sales by offering premium options such as upgraded displays. Similarly, introduction of 5G requires a premium display, consistent with 5G capability and feature set. The resulting transition from LTPS to AMOLED, requires masks with more layers. The most basic rigid AMOLED mask that has only 12 layers, while the most advanced can have up to 25. Not only does the number of layers increase, but there are more critical layers within each set, further enhancing the value we provide.
Similarly, high-end technologies are expanding into the large screen TV market. We are seeing the ramp of G10.5+ form factor, which has come to dominate the production of standard LCD panels for large screen TVs. With this transition largely behind us, we are currently seeing the commercialization of various OLED displays intended to capture the premium sector of the TV market. Our targeted approach combines a conventional LCD with a mini LED backlight to create a similar visual experience. These technologies are good for mass demand, as they require more mass layers and more critical layers per set, putting more complexity and higher value. As the display for the mass market and technology leader, we are well positioned to benefit from these trends.
Shifting to the Chinese IC market. We're in the process of qualifying the final litho tool from our initial phase of investment in Xiamen. The installation of this tool was delayed six months because the supplier self-imposed travel restrictions in response to COVID-19. The tool is targeted at production of high-end photomasks. Our expectation is that we'll begin to generate revenue by the end of the second quarter, and ramp through the back half of the year. China remains a key region of expected growth for the semiconductor industry, and our presence there should position us well to grow with the market. Over the last three years, our IC revenue of products shipped to China has grown at a compounded annual growth rate of 60%, and is currently running slightly above $100 million annually. We anticipate that our business there will continue to grow and we will remain the merchant photomask market leader in China.
We are off to a strong start, and I would like to thank all of our employees for your good work during the first quarter. Looking forward, I continue to believe that 2021 will be one of the best years ever for Photronics, as we invest to support growing end markets, expand our business in advanced display technologies, enable our global customers to meet their product roadmaps, and improve profitability and cash flow to facilitate continued investment in projects that improve our return on capital.
At this time, I will turn the call over to John.
John P. Jordan -- Executive Vice President, Chief Financial Officer
Thank you, Peter. Good morning, everyone.
Thank you, Peter. Good morning, everyone. Revenue improved 2% compared with the fourth quarter, as growth in FPD was partially offset by a decline in IC. FPD growth was driven primarily by AMOLED displays for advanced smartphones. We've communicated over the last few quarters that the US ban on Huawei had an impact on our display supply chain, as design activity stopped while they reacted to the new restrictions. This affected our fourth quarter FPD results, as panel suppliers had not required new masks for Huawei phones. During the 
w FPD measuring tools that will be installed during 2021. These will bring us additional capacity to serve our customers who manufacture advanced panels. These investments should provide us with sequential growth in capacity, and therefore, revenue during the second half of 2021. As stated before, we have entered into three multi-year purchase agreements that collectively represent a business commitment in excess of $40 million annually to support these investments.
We often comment that the display market is very dynamic. This includes development and adoption of new technologies. The increased penetration of AMOLED displays within smart phones is one example, as manufacturers compact -- combat rather plateauing sales by offering premium options such as upgraded displays. Similarly, introduction of 5G requires a premium display, consistent with 5G capability and feature set. The resulting transition from LTPS to AMOLED, requires masks with more layers. The most basic rigid AMOLED mask that has only 12 layers, while the most advanced can have up to 25. Not only does the number of layers increase, but there are more critical layers within each set, further enhancing the value we provide.
Similarly, high-end technologies are expanding into the large screen TV market. We are seeing the ramp of G10.5+ form factor, which has come to dominate the production of standard LCD panels for large screen TVs. With this transition largely behind us, we are currently seeing the commercialization of various OLED displays intended to capture the premium sector of the TV market. Our targeted approach combines a conventional LCD with a mini LED backlight to create a similar visual experience. These technologies are good for mass demand, as they require more mass layers and more critical layers per set, putting more complexity and higher value. As the display for the mass market and technology leader, we are well positioned to benefit from these trends.
 Shifting to the Chinese IC market. We're in the process of qualifying the final litho tool from our initial phase of investment in Xiamen. The installation of this tool was delayed six months because the supplier self-imposed travel restrictions in response to COVID-19. The tool is targeted at production of high-end photomasks. Our expectation is that we'll begin to generate revenue by the end of the second quarter, and ramp through the back half of the year. China remains a key region of expected growth for the semiconductor industry, and our presence there should position us well to grow with the market. Over the last three years, our IC revenue of products shipped to China has grown at a compounded annual growth rate of 60%, and is currently running slightly above $100 million annually. We anticipate that our business there will continue to grow and we will remain the merchant photomask market leader in China.
We are off to a strong start, and I would like to thank all of our employees for your good work during the first quarter. Looking forward, I continue to believe that 2021 will be one of the best years ever for Photronics, as we invest to support growing end markets, expand our business in advanced display technologies, enable our global customers to meet their product roadmaps, and improve profitability and cash flow to facilitate continued investment in projects that improve our return on capital.
At this time, I will turn the call over to John.
John P. Jordan -- Executive Vice President, Chief Financial Officer
Thank you, Peter. Good morning, everyone.
Thank you, Peter. Good morning, everyone. Revenue improved 2% compared with the fourth quarter, as growth in FPD was partially offset by a decline in IC. FPD growth was driven primarily by AMOLED displays for advanced smartphones. We've communicated over the last few quarters that the US ban on Huawei had an impact on our display supply chain, as design activity stopped while they reacted to the new restrictions. This affected our fourth quarter FPD results, as panel suppliers had not required new masks for Huawei phones. During the 