The structural battle of the LCD industry, who wins and who loses?

In May, the media reported that Samsung to sell L7-2 and L8-2-1 two LCD panel factory part of the equipment; June, the media reported that Panasonic decided to withdraw from the LCD panel business in 2021, its Himeji 8.5 generation plant production equipment will be auctioned for bidding.

With Japan and South Korea on the LCD panel “shut down and resell” different, the domestic LCD panel industry “expansion” but in progress:

For example, huaxing photoelectric investment of 35 billion yuan in guangzhou 8.6 generation line T9 project just completed “bidding “. This will be the world’s one-time planning of the largest single production capacity of one of the 8.6 generation LCD panel project. — In fact, the domestic mainstream large-size display panel manufacturers, BOE, Huaxing photoelectric and Huike are expanding “LCD” production capacity.

In accordance with the original industry chain planning, 2020 South Korea LG and Samsung have been prepared to completely withdraw and shut down all LCD panel manufacturing projects.

However, in the new crown epidemic, Europe and the United States lose money and house economic double push, the global display industry into the “fiercest ever” recovery period – price increases, so LG and Samsung “relaxed ” decision to stop production.

Even so, in 2021, with the launch of vaccination, the new crown epidemic into the “post-era”. Display panel demand growth tends to stagnate, the high price trend is eager to usher in a turnaround at the end of the year. LG and Samsung choose to finally implement the “LCD panel shutdown” decision, not surprisingly.

And Japan’s LCD panel industry chain has been in the “lowest level of operation N years”. Sharp sold out to Taiwan-invested enterprises, specializing in small and medium-sized LCD panels JDI has said to enter the OLED field, Panasonic can hold on to the possibility of “from the industry chain cluster perspective has been zero. Japanese display industry in the LCD panel continues to do subtraction, which is the expected thing.

Not only is Japan and South Korea’s LCD industry chain “recession”.

In the last 5 years, China’s Taiwan region also did not “new planning” brand new large LCD panel project – Taiwan enterprises Honghai commitment to invest in the United States LCD panel project also “repeatedly shrink “, whether there will be the following and not fixed; Taiwan’s regional enterprises capacity changes are the most important in 2016 to put into operation an 8.6 generation line, and cooperation with Japan Sharp in Guangzhou construction of 10.5 generation line.

Therefore, it can be said that the global LCD panel new investment is almost all concentrated in China’s mainland region. Especially in 2021 is the trend of “others retreat, we advance” the reverse movement. What is the secret behind this? The answer is actually very obvious.

That is, South Korea, Japan’s counterparts retreat is basically 7 generation line, 7.5 generation line and 8.5 generation line capacity; and the domestic mainland expansion is 10.5/11 generation line and 8.6 generation line capacity.

For example, huaxing photoelectric guangzhou T9 project is 8.6 generation line panel; is on the amount of juice Changsha project is also 8.6 generation line – before huike Chongqing and Chuzhou project, is also 8.6 generation line, as the world’s last rise of large-size LCD panel enterprises, huike to create the world’s largest 8.6 generation line cluster capacity; at the same time 2021 BOE and Huaxing photoelectric is also vigorously expanding 10.5 / 11 generation line capacity.

For example, Wuhan BOE intends to combine the favorable conditions of 25,000 glass substrates/month plant space has been reserved at the beginning of construction, using self-financing 3.775 billion yuan in the existing Wuhan BOE plant for capacity expansion. Even, Japan-Taiwan cooperation in Guangzhou Sharp Foxconn Honghai 10.5 generation line are in 2020 for expansion – 2020-2021, the expansion scale of several 105/11 generation lines in the mainland, almost equivalent to a new 10.5/11 generation line.

The shutdown is 8.5 generation and the following generation panel line, the expansion is 10.5 / 11 generation and 8.6 generation panel line – of which, 10.5 / 11 generation line is more in line with the color TV, commercial display and other needs of the development trend of large size, which does not need to be said: 10.5 / 11 generation line, is still the industry shortage of capacity. 8.6 Generation line, although with 8.5 generation line most of the product capacity overlap is high, in 50 and 58 inches, it can cut 8 and 6 blocks; compared with 8.5 generation line 48 inches and 55 inches of 8 and 6 blocks, basically “cost unchanged”, the market competitiveness is enhanced. With an 8.6 generation line pressure 8.5 generation line head, these Taiwan panel companies invented the method, by mainland enterprises to play fire!

In fact, from IT panels to TV panels, 8.6 generation lines can be similar cost, in the cut display area pressure 8.5 generation line head. This pattern, if the “industry into a relative surplus cycle”, the competitiveness of the 8.5 generation line is obviously a little worse.

2020-2021 LCD panel out of the “most fierce ever strong cycle”, thereafter will certainly be in the “consumer overdraft” effect under the “production line efficiency” battle. At this time, the mainland enterprises by virtue of the total scale advantage, industry chain supporting advantages, and generation line leading advantage, competitiveness will be more prominent. In this context, Korean and Japanese enterprises take advantage of the second-hand equipment prices are okay, selling the corresponding equipment, is the best choice.

Next-generation panels and the “immediate needs” balance

According to media reports, the Samsung panel line trend is a strategic decision. Samsung Electronics Vice President Lee Jae-yong personally involved in the decision to withdraw the LCD project. Lee also personally announced a plan to invest 13 trillion won in next-generation display technology development by 2025. Among them, the QD-OLED screen is an important direction.

Aiming at the next generation, a new round of competition for display panels has already begun. For example, BOE Chongqing 6 generation OLED line is moving in equipment; Huaxing photoelectric in Guangzhou planning a T8 printed OLED 8.5 generation line project; Huike is also preparing to validate OLED technology on the Changsha project. …… South Korea LG is currently upgrading Guangzhou 8.5 generation OLED production capacity, and accelerate the construction of South Korea 10.5 generation OLED project. It is reported that Samsung sold LCD panel project, the vacated plant, and equipment which will also be imported to the 6 generation OLED and future high generation QD-OLED production capacity.

A certain perspective, Japanese companies out of the LCD panel camp, is indeed a “retreat”; and Korean companies are making space for OLED LCD – is to “change the road to overtake the car “, its planning is to rival “new technology downgrade strike”.

This background, the domestic LCD industry, still expanding the LCD production capacity is “worth” and “wise” becomes a problem: in fact, OLED or MICRO-LED, QLED and so on, are facing two problems.

First, with the LCD shared glass substrate TFT capacity, that is, the LCD panel line more than half of the investment in the future display panel is universal.

Second, the new display technology is temporarily difficult to meet the global display industry’s “huge demand”.

There are color TV and commercial display products, the development of large size “demand fierce”. The latter needs “in line with the trend of large size” of new production capacity construction. Almost all of the domestic 5 years of LCD panel new line construction, and the current capacity enhancement project, are around this trend. Is also precisely the domestic mainland enterprises to take the lead in this step, to establish the “competitive advantage” of the LCD panel manufacturing industry in Japan, South Korea, and Taiwan, and other regions.

The immediate, short, and medium-term demand for large-size LCD is still growing rapidly, which is not contradictory to the long-term view that must be the world of next-generation technology.

Industry experts believe that even the next-generation display technology is considered the most mature OLED display, the large size is also facing printed display, W-OLED, QD-OLED screen and so on at least three routes of the battle: in the technical certainty to achieve before, the possibility of becoming the mainstream of the color TV market is almost zero.

The sooner the next-generation technology can not achieve the standardization of technical routes, the longer the life of the LCD large size market.” That is, the risk of the domestic LCD panel industry does not lie in the “next generation” itself, but in the next generation of technology process route selection and “capacity expansion direction of the switch” timing issues.

At present, the domestic display panel two leaders, BOE and Huaxing photoelectric have built a vapor deposition technology process of the 6th generation OLED line and carried out vapor deposition and printing process of large-size OLED technology verification experiments. Domestic display industry in the next generation of technology investment is not significantly behind – due to the domestic panel sector in the large size of the LCD lead, the actual result, the domestic display panel companies to actively introduce large-size OLED urgency is not strong, this aspect of the domestic enterprises can go more relaxed some.

In addition, in the direction of small and medium-sized OLED, flexible OLED, and silicon-based OLED three characteristic differentiation, the domestic display panel industry investment, in global China, Japan, Taiwan, and South Korea in the four camps, basically, maintain the lead.

In OLED materials, QLED materials, and micro-led product development, also either actively catch up, or maintain the lead. However, in the printing, evaporation, and other equipment involved in the operation of OLED materials, the domestic industry chain is still significantly behind Japan and South Korea.

Therefore, in the display panel industry chain and the future-oriented supply battle, the domestic display industry has advantages and disadvantages, the overall advantage is greater than the disadvantages, the recent advantages are particularly obvious. Korean and Japanese companies selling LCD panel equipment, which does not constitute a reason to deny the legitimacy of investment in the domestic LCD industry chain. However, the domestic LCD industry should also pay great attention to new technologies, next-generation display direction and the degree of development, and timely “to the new track”.

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