BOE and TCL Huaxing are the two largest LCD panel giants in China. Since 2009, BOE and TCL Huaxing have launched a production capacity expansion competition. Originally, BOE put into production the world’s first most advanced 10.5-generation line in 2017. In order to gain the position of the global LCD panel leader, TCL Huaxing only put into production the first 11-generation line in 2019.
However, when panel prices continued to decline in 2018, TCL China Star’s strong cost control capabilities made its net profit decline significantly smaller than its competitors, which pushed it to rank fifth in the global LCD panel market from three years ago. Promoted to the second place now. As TCL Huaxing completed the acquisition of Suzhou Samsung's 8.5-generation line, and BOE's acquisition of China Electric's Panda panel line, the industry share once again concentrated on these two leading companies. For example, TCL Huaxing acquired Samsung's Suzhou 8.5-generation line through a share swap, and its production capacity will rise by 60% in the next year.
Prior to this, Samsung Display had held a 5.02% stake in the subsidiary of Huaxing's 11th generation line; at the same time, Samsung was also a major customer of TCL Huaxing's large, medium and small-sized products, and the two parties have been maintaining close cooperation. It is understood that Samsung, which was introduced by this share swap, sold 44 million TV sets in 2019, ranking first in the world, and the Samsung Suzhou line acquired by Huaxing provided more than 80% of Samsung's VD (Visual Display) supply.
The rapid growth of TCL Huaxing’s LCD panels lies in its control of customers. TCL itself is the world’s third largest TV company. TCL Huaxing is also a supplier of LCD panels to Samsung and Xiaomi. It actively expands LCD panels when LCD panel sales are problematic. Panel production capacity. In the first half of this year, BOE and TCL China Star’s TV LCD panel shipment areas were 14.4 million square meters and 12.9 million square meters, respectively, with year-on-year growth rates of 2.1% and 44.9%. TCL Huaxing The growth rate of BOE is 22 times that of BOE, and the gap between the two parties is rapidly shortening.
In fact, in February this year, TCL China Star TV ranked first in both panel shipments and shipment area, and has already achieved catch-up. In terms of shipments, China Star Optoelectronics surpassed BOE with 18.8% market share to become the world's largest supplier of LCD TV panels. In terms of shipping area, China Star Optoelectronics also ranked first with a 19.6% share. The China Power Group and LG, which consist of BOE, Samsung, Panda and Rainbow, followed closely with 18.7%, 12.6%, 10.8% and 10.2%. The battle between BOE and TCL Huaxing may see the end of the year.
Compared with LED, OLED has more technical advantages and better color reproduction. However, it is currently mainly used in small and medium sizes, and the cost of using large sizes is still relatively expensive. OLED is divided into AMOLED and PMOLED. The former has a simple process and low cost, while the latter has a complicated process and is difficult to control costs. At present, AMOLD occupies most of the market share, especially the flexible screen that has emerged in the past two years will drive AMOLD's demand. At present, Samsung, Huawei, and Rouyu Technology have all released foldable mobile phones, and the core technology behind this is the flexible screen OLED panel.
However, there are not many manufacturers of energy production folding screens. South Korea and Samsung have almost monopolized the production capacity of flexible panels. At present, 90% of the supply in the market comes from Samsung. In fact, in February this year, TCL China Star TV ranked first in both panel shipments and shipment area, and has already achieved catch-up. In terms of shipments, China Star Optoelectronics surpassed BOE with 18.8% market share to become the world's largest supplier of LCD TV panels. In terms of shipping area, China Star Optoelectronics also ranked first with a 19.6% share. The China Power Group and LG, which consist of BOE, Samsung, Panda and Rainbow, followed closely with 18.7%, 12.6%, 10.8% and 10.2%. The battle between BOE and TCL Huaxing may see the end of the year.
Compared with LED, OLED has more technical advantages and better color reproduction. However, it is currently mainly used in small and medium sizes, and the cost of using large sizes is still relatively expensive. OLED is divided into AMOLED and PMOLED. The former has a simple process and low cost, while the latter has a complicated process and is difficult to control costs. At present, AMOLD occupies most of the market share, especially the flexible screen that has emerged in the past two years will drive AMOLD's demand. At present, Samsung, Huawei, and Rouyu Technology have all released foldable mobile phones, and the core technology behind this is the flexible screen OLED panel. However, there are not many manufacturers of energy production folding screens. South Korea and Samsung have almost monopolized the production capacity of flexible panels. At present, 90% of the supply in the market comes from Samsung.
After entering 2018, both Samsung and LGD have suspended new investment plans for OLED mobile phone panels, basically focusing on maintaining the current production capacity. Domestic manufacturers also have many plans to put into production on OLED. In 2019 alone, 10 OLED production lines will be put into production, most of which are flexible screen production lines. Huaxing Optoelectronics plans to continue to invest in the t5 project based on the current Optics Valley t3 and t4 projects. This will be the second flexible OLED production line deployed by Huaxing in Wuhan.
The replacement of low-end technology by high-end technology is irreversible. For TCL Huaxing, the biggest driving force for its current rise is the transfer of panel production capacity.
After two years of price battles, the closure and conversion of production lines in South Korea and Taiwan are irreversible, and the reversal of panel prices is already on the way. Because OLED has not been able to solve the burn-in, ghosting and cost issues well, it has not been able to form a substitute for LCD for a long time. On the contrary, LCD has formed an encirclement and suppression of OLED due to the continuous advancement of quantum dot and MLED technology. . Judging from the recent performance of TCL’s share price increase, the increase in volume and price will continue to boost TCL’s share price.
