After ten years of fighting, the "Three Kingdoms" situation of China, Japan and South Korea came to an end, and the status of Chinese companies in the panel industry has gradually become prominent. On September 1, a reporter from Beijing Commercial Daily was informed that TCL Huaxing’s 8.5-generation printed OLED production line in Guangzhou will start next year. Prior to this, TCL CSOT just announced its intention to acquire Suzhou Samsung Display Co., Ltd. The strong rise of BOE and TCL CSOT allowed mainland China panels to achieve corner overtaking within ten years. Not only did they successfully get the right to speak in the pricing of large-size panels, they also stood in the same position as South Korean and Japanese companies in the competition for the next generation of displays.
It is reported that TCL CSOT’s 8.5-generation printed OLED production line in Guangzhou is expected to become the world’s first mass-produced 8.5-generation printed OLED production line. Previously, TCL CSOT planned to invest 46 billion yuan in the construction of a printing and rollable display R&D and production base in Huangpu District, Guangzhou City in 2021. Printing technology is considered to be an effective way to solve the high cost of OLED and produce large-size panels.
In addition to researching and developing new display technologies and producing display panels under new technologies, panel manufacturers in my country have also expanded their scale through mergers and reorganizations.
On August 28, TCL Technology announced that the company and its holding subsidiary TCL CSOT have signed an agreement with Samsung Display Co., Ltd. TCL CSOT will acquire Suzhou Samsung Electronics LCD Technology Co., Ltd. 60 for a consideration of US$1.08 billion (approximately RMB 7.622 billion). Equity and 100% equity of Suzhou Samsung Display Co., Ltd.
"The acquisition of the Suzhou Samsung project will further increase our overall production capacity, and the layout of production lines and product portfolio will be enriched and optimized. At the same time, Suzhou Samsung has a very good relationship with Samsung VD, TCL, and Sony. Consolidate partnerships with strategic customers." Zhao Jun, senior vice president of TCL CSOT, told a reporter from Beijing Commercial Daily.
It is understood that Suzhou Samsung Electronics LCD Technology Co., Ltd. was established in 2011, engaged in the manufacture of LCD panels, and is Samsung's only 8.5-generation production line in the Mainland. Suzhou Samsung Display Co., Ltd. is its supporting module factory, with a monthly capacity of 3.5 million. In addition to the processing of the rear panel of Suzhou Samsung Electronics, it also provides module processing for South Korea's Samsung Display.
After the completion of this acquisition, TCL Technology will have three 8.5-generation and two 11-generation high-generation production capacities. After all are fully produced, they will achieve a monthly output of large-size panels of over 600,000 large boards. In the first half of 2020, TCL CSOT ranked second in the global large-size display market. With the integration of Samsung Suzhou and the second generation 11 line in early 2021, TCL CSOT will increase its production capacity by more than 50% in the next 12 months. At the same time, in this transaction, Samsung became the second largest shareholder of TCL CSOT through a share swap.
Industry observer Shibin Hong believes that the panel industry chain has accelerated its transfer to China, and the continuous industrial cycle low in recent years and the impact of the current round of the epidemic have further accelerated the survival of the fittest among competitors. Resources are concentrated in leading companies. The competitive landscape follows the progress of mergers and reorganizations. Significant changes are expected.
As a technology-intensive industry, display technology has long been monopolized by Japan and South Korea. Before 2010, the panel industry in Mainland China was not outstanding. The display screen was once the fourth largest single imported product with import value after petroleum, chips, and iron ore. On January 4, 2013, the National Development and Reform Commission’s Price Supervision, Inspection and Anti-Monopoly Bureau announced that six large-scale panel manufacturers, including South Korea’s Samsung, LG, Taiwan’s Chi Mei, and AUO, had suffered due to their monopoly on LCD panel prices in mainland China. The National Development and Reform Commission economic sanctions were 353 million yuan.
After that, with the active layout of panel manufacturers such as BOE and TCL CSOT, with the construction of multiple high-generation lines, China's display panel production capacity continued to expand. At the same time, in 2016, Japanese and Korean manufacturers began to adjust their production capacity structure and closed down multiple low-end production lines. Around 2016, Japan took the lead in withdrawing from the field of large-size LCD panels; in 2020, Samsung and LG have also made clear their schedules for closing large-size LCD panel production lines, that is, by the end of 2020, SDC and LGD will close all their LCD TVs in South Korea For the panel production line, after Samsung sold the Suzhou production line, the only Korean companies in mainland China are LGD’s “Single Seed” factory in Guangzhou.
On the one hand, the production capacity of Korean factories withdrew, and on the other hand, the rapid expansion of Chinese mainland manufacturers in recent years has led to a huge change in the global LCD display panel production capacity pattern. According to data from Sigmaintell, from the perspective of LCD TV panel production capacity, from 2020, mainland Chinese manufacturers will account for more than 50%, and will account for nearly 70% in the future. The production capacity is highly concentrated; while the proportion of Korean manufacturers is rapidly shrinking to Within 20%, shrink even further to within 5%.
From the perspective of manufacturers, LCD TV panel production capacity is highly concentrated in BOE and TCL CSOT, and the industry will form a new "double giant" competition pattern. According to data from Qunzhi Consulting, BOE and TCL CSOT will account for more than 35% of global LCD TV panel production capacity in 2020. In the future, with the mass production of the new G10.5 line and the continued expansion of production capacity through mergers and acquisitions, the two leaders The market share of enterprises will exceed 50%, and the competition pattern of "two superpowers and many strong" will gradually take shape.
At the same time as panel industry mergers and reorganizations, panel prices are gradually coming out of the trough, which also allows leading panel manufacturers to taste the long-lost sweetness.
According to the 2020 semi-annual report of TCL Technology, based on the same caliber after the reorganization, TCL Technology achieved operating income of 29.33 billion yuan in the first half of the year, a year-on-year increase of 12.3%. It is worth noting that TCL Technology has a one-time gain of 1.15 billion yuan in the first half of last year due to the divestiture of its terminal business due to restructuring. If the asset restructuring gains are excluded, the net profit attributable to shareholders of listed companies in the first half of this year will increase by 7.6% year-on-year. Profits in the second quarter increased significantly, achieving a net profit attributable to shareholders of listed companies of 800 million yuan, an increase of 96% from the first quarter.
According to the research data of Qunzhi Consulting, due to the short supply, the mainstream size in July increased by different degrees compared with June, the highest reached 15%. In August, the stocking demand of downstream TV manufacturers was strong, the overall supply of large-size LCD panel production capacity was still tight, and panel prices maintained an upward trend. The corresponding prices of mainstream 32-inch, 55-inch, and 65-inch panels have reached US$44, US$132, and US$187 respectively, and the price increase has exceeded 10% again.
It is worth noting that although Samsung and LGD have or are preparing to shut down LCD production lines, Korean panel makers are actively deploying next-generation display technologies, choosing a new track and starting again, leading the technological direction of the global TV market.
Home appliance analyst Xu Yiqiang said that although LCD technology will continue to be dominated for a long time in the future, the continued profitability problem facing LCD TV is very prominent. Chinese panel makers should continue to increase investment in technology research and development, on the one hand, improve the image quality of LCD and narrow the gap with OLED products; on the other hand, increase research and reserves of OLED technology in the large-size field.
It is understood that in the field of printed OLED, BOE is investing in large-size printed RGB OLED. In the next-generation display technology fields such as Mini-LED, Micro-LED, printed flexible OLED, QLED and other new display technologies, materials and processes, TCL CSOT is actively occupying key strategic control links and values through cooperation, self-research, mergers and acquisitions. Node and establish a global leading advantage based on a complete ecological layout.
“China’s display technology is currently at the same starting line as Japan and South Korea. On the one hand, we will expand the scale of our existing business, and on the other hand, we will actively deploy new and next-generation display technologies, hoping to truly achieve a two-power structure. It will continue to give full play to its leading advantages in cost efficiency and product technology, and achieve better competitiveness and profitability." Zhao Jun said.
