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Chinese panel companies are growing rapidly: Korean panel companies are forced to transform

With the 10.5/11 line of China's two panel companies BOE and Huaxing Optoelectronics being put into production, China's LCD panel production capacity has increased rapidly, resulting in the continuous decline of global LCD panel prices, but the low cost of Chinese panel companies can withstand The price of LCD panels continues to decline, and Korean panel companies have been unable to afford it. Samsung and LGD are planning to switch off LCD panel production lines to OLED panels.

Chinese panel companies are growing rapidly

According to data released by IHS in the first quarter of this year, the LCD panels produced by Chinese panel companies accounted for more than 50% of the global panel market in terms of area, which means that China has become the largest producer of LCD panels in the world and has achieved The leading edge of the panel.

From 2003 to 2009, it was the stage of the Chinese panel. In 2003, BOE bought a 3.5-generation line of a non-advanced LCD panel production line from Hyundai, which opened its LCD panel business. In the following six years, it has been studying the production technology of LCD panels until 2009. At that time, it decided to open the world's mainstream 8.5-generation LCD panel production line.

Huaxing Optoelectronics was established in 2009. It independently researched and developed LCD panel production technology by hiring relevant technical talents from Taiwan and China, and also established an 8.5-generation panel production line that year. As a result, BOE and Huaxing Optoelectronics, the Chinese panel duo, formed this. With their accumulation in panel production technology, they are not only satisfied with catching up with the world's advanced LCD panel production technology, but also starting to build the world's most advanced in 2015. The 10.5/11 generation LCD panel production line.

In 2017, BOE's first 10.5-generation LCD panel production line was put into production. In 2018, Huaxing Optoelectronics' 11-generation LCD panel production line was put into production. As a result, China's LCD panel production capacity has leapfrogged, and the global panel market share has reached the above-mentioned global super 50% market share. In the past 16 years, Chinese panel companies have achieved a counterattack from catching up to surpassing.

Korean panel companies are forced to transform

Before the Chinese panel companies surpassed Korea, South Korea has been the world's largest panel manufacturer since 1997. LG and Samsung are the world's top two panel manufacturers. In 2018, BOE surpassed LG to become the world's largest LCD panel manufacturer. Huaxing Optoelectronics is the fifth largest LCD panel manufacturer in the world.

As China's panel production capacity surpasses South Korea, South Korea's two panel makers are under tremendous pressure. As China's panel production capacity jumped in 2017, the global liquid crystal panel industry supply is in short supply, and LCD panel prices are also rapidly declining. However, due to the more advanced production technology of Chinese panel companies, China’s labor costs are also lower. In 2018, China’s per capita income was about 64,600 yuan, and South Korea’s per capita income was 31,400 yuan. Enterprises are suffering from the heavy cost pressures of Chinese panel companies.

Previously, LGD relied on the scale advantages of LCD panels to maintain profitability. Samsung's display division relied on the profit earned by small and medium-sized OLEDs to maintain profitability. However, in the first quarter of this year, Samsung's display division turned from profit to loss. LGD was in the first two quarters of this year. There was a loss and the loss showed a tendency to increase losses; in contrast, China's two major panel companies remained profitable. It shows that when the price of LCD panel goes down, Chinese panel companies are more tolerant of panel prices due to the advantages of production technology and cost advantages than Korean panel companies.

Korean panel companies are seeing this choice and transformation. Samsung has already begun to transform small and medium-sized OLED panels and QLED panel technology several years ago. Small and medium-sized OLED panels are aimed at digital electronic products such as smart phones. QLED panels are aimed at large-sized display products such as TVs. The LCD panel production line was closed several years ago, and recently it is planning to speed up the shutdown of the LCD panel production line and develop QD-OLED panels for large-size display products such as TVs.

In recent years, LGD mainly relied on the revenue generated by its LCD panel business to support the development of large-size OLED panels, and also tried to enter the small and medium-sized OLED panel market. However, the development of small and medium-sized OLED panels is not smooth, and small-size OLED panels have been supplied to Google pixel mobile phones, Huawei mate20 Pro mobile phones, etc. have been experiencing problems, and its current focus is on the large-size OLED panel business. Its 8.5-generation large-size OLED panel production line in Guangzhou has just been put into production recently. Recently, the Korean media announced its plan. The staff structure adjustment reduced the LCD panel production capacity and turned to the large-size OLED panel business.

Of course, for Chinese panel companies, the main competitors of Korean panel companies are not able to shrink their LCD panel business. They need to keep up with Korean panel companies in OLED panel technology and even future microLED panel technology, only in panel technology. Keeping up with the world trend and even taking the lead can gain lucrative profits, otherwise you will only be caught in the strange circle of price wars.
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