At present, the trend of semiconductor display industry chain transferring to China is becoming stronger and stronger, which strengthens the scale advantage and geographical advantage of domestic enterprises, promotes the continuous improvement of service and cost competitiveness, puts more and more pressure on Samsung and other enterprises, forces them to change the track, and domestic manufacturers will enter the “harvest period”.
LCD (liquid crystal display) industry once flourished in the United States and Japan, and then began to blossom and bear fruit in Korea and China. As an industry with significant scale effect, high capital barriers and prominent strategic position, expanding higher generation production lines against the industrial cycle is the core driving force for the long-term decline of industry costs and the continuous creation of new application markets.
Since the beginning of this year, the whole LCD market has been full of smoke. Whether the South Korean panel giant announced the closure of LCD production line, or the integrated sale of related domestic listed companies, the industry is full of highlights.
Will domestic manufacturers enter the “harvest period”?
Since the beginning of this year, Samsung and LG, the two South Korean panel giants, have successively announced the closure of most LCD (liquid crystal display) production lines. India predicts that the proportion of Korean production capacity will decrease from 23% in the first quarter of 2020 to 8% in the first quarter of 2021.
A display industry analyst told the daily economic news that at present, the trend of semiconductor display industry chain transferring to China is becoming stronger and stronger, which strengthens the scale advantage and geographical advantage of domestic enterprises, promotes the continuous improvement of service and cost competitiveness, and puts more and more pressure on Samsung and other enterprises to switch tracks, Domestic manufacturers will also enter the “harvest period”.
For Samsung, LG and other international manufacturers to withdraw from the LCD panel market, BOE vice president Yuan Feng believes that domestic manufacturers will lead the development of the global LCD industry. LCD will have a golden period of 10 years in the future, OLED will continue to grow rapidly, BOE will also play an important role in such industrial restructuring.
In recent years, with the gradual production of LCD production lines of BOE and other enterprises, the proportion of LCD production capacity of domestic enterprises has gradually increased. From the perspective of market structure, the head effect of LCD market is obvious. Huatai Securities related research reports show that domestic manufacturers such as BOE lead the global large-size LCD panel industry in terms of market share. Compared with South Korean manufacturers such as Samsung and LG, which are more reliant on the TV panel market, BOE has a more balanced development in mobile phone, TV, tablet, laptop, monitor and other market segments.
India data shows that from the perspective of large-size TFT-LCD shipping area, BOE ranked first in the world with a market share of 22.8% in May 2020, while Huaxing optoelectronics, qunshuang optoelectronics, Samsung and Youda optoelectronics ranked second to fifth with a market share of 12.9%, 12.4%, 11.1% and 10.5% respectively.
According to the forecast of DIGITIMES research, with the withdrawal of overseas manufacturers’ production capacity and the slowdown of domestic manufacturers’ expansion, the global LCD production capacity will usher in the first negative growth in 2021. In the future, the total production capacity of BOE and Huaxing optoelectronic panel will account for nearly 50%, the industry competition pattern will be further optimized, and the industry (price) fluctuation is expected to decrease.
In addition to the changes in the industry structure, the iteration of technology has also attracted much attention. Oriental Securities Research Report shows that mini LED backlight combined with high-end liquid crystal display, as a new technology direction of liquid crystal display products, can achieve higher partition and finer image quality, enhance the competitiveness of liquid crystal display products in high-end products, and is expected to promote the innovation of liquid crystal display products.
BOE said that from the industry level, South Korea has gradually switched tracks, reduced production capacity, and the domestic LCD industry has begun to rise. From the demand side, TV consumes more than 80% of LCD capacity, and the epidemic suppresses demand in the short term. After the epidemic, TV demand is expected to rebound rapidly; In the long run, with the improvement of technology and the promotion of 8K high-definition TV, the TV size will develop towards large screen, which is expected to consume more panel capacity.
“Integration is inevitable”
At the same time, the domestic LCD market is also very busy. Previously, the listed company * ST dongke was planning to sell shares in the LCD panda project of Nanjing CLP, and the market was once hot about whether BOE, TCL, Huaxing optoelectronics, shentianma and other related listed companies were interested in taking over the offer.
This is also seen by the industry as a signal to accelerate the integration of the LCD industry. According to the in-depth research and future development trend forecast report of LCD industry from 2019 to 2025 issued by China Research Institute of industry, at present, the integration curtain of global LCD market is opening with the bidding of Samsung Suzhou line and Nanjing CLP panda project, which also indicates that the restructuring and integration of global display industry is accelerating, and the industry concentration is further improving.
Yuanfeng told the daily economic news that from the perspective of any industry development stage, the integration stage is a process that must be experienced. The past 20 years have witnessed the rapid development of the whole LCD industry. At present, it is inevitable for the industry to enter a mature stage of development.
Liu Hongfeng, vice president and Secretary of BOE, told the daily economic news that compared with LCD technology, other new display technologies are still in their infancy and growth period. BOE is also actively developing new display technologies and will cooperate with global advanced technology companies. In terms of LCD, if there is no particularly big demand change in the industry, BOE will no longer add independent investment LCD production lines in principle, because the existing capacity can support the demand. In the next stage, more resources will be invested in OLED and other innovative display fields.
Liu Hongfeng stressed that in the future development pattern, it is not contradictory to invest in OLED market and participate in LCD market. LCD is still an important stock market.
On the other hand, the price changes also make manufacturers full of expectations. Under the influence of the epidemic, supply was blocked in the first quarter and panel prices rose; In the second quarter, production capacity basically recovered, epidemic prevention and control normalized, and panel price callback; With the improvement of the epidemic situation and the change of consumer demand, LCD prices are on the rise. According to the data of Wits View, the price of LCD panel has increased sharply since August, with 32 inch, 43 inch and 55 inch increasing by more than two digits, reaching 15.8%, 13.7% and 13.7% respectively. The average price of 32 inch panel has reached $44, up 37.5% from the low of $32 in May this year.
As for the changes in demand before and after the epidemic, Liu Hongfeng mentioned that during the epidemic period, although offline sales of external display products were affected, people’s demand for mobile products at home increased significantly. In the third quarter, with the recovery of consumption, the end product prices of the whole display industry rose to varying degrees. BOE also hopes to seize the opportunity of market recovery.