The largest acquisition in the history of the domestic LCD panel industry will land! A few days ago, BOE issued an announcement stating that it intends to acquire 80.831% of the Nanjing CLP Panda’s 8.5-generation line for no less than 5.591 billion yuan, and at the same time, it plans to spend no less than 6.526 billion yuan. Acquired a 51% stake in the Chengdu 8.6 generation line. This acquisition is another move by panel companies following the acquisition of the Shanghai Broadcasting and Television 5th generation line by AVIC (Shentianma's parent company) in 2009, and the acquisition of Samsung Display Suzhou's 8.5th generation line by TCL Technology in August this year. It has a profound impact on the industry.
In the past two years, due to the accelerated expansion of LCD panel production capacity, industry competition has become fierce, which has accelerated the industry reshuffle. South Korean panel factories have successively shut down LCD production lines, which has increased the concentration of the industry, which is mainly reflected in the concentration of market share in mainland China. According to data from Qunzhi Consulting, in the first half of 2020, in the global TV panel market share, mainland Chinese panel manufacturers have reached 55.5%, an increase of 9 percentage points from the same period last year. Previously, the industry has made many analysis and predictions on the results of this acquisition. The possible influence factors include the purchase price, the positioning of the purchaser's production line, whether the purchaser believes the target to be acquired can complement its own competitiveness, and the purchaser's product Evaluation of complementarity of technology and customer resources, etc.
The announcement shows that the Nanjing G8.5 generation line and the Chengdu G8.6 generation line have mature technology, complete configuration, stable technology, great development potential, and certain acquisition value. This acquisition is in line with BOE's goal of becoming a leader in the semiconductor display field and can bring certain economic and social benefits to BOE. After the completion of this acquisition, the market share of the LCD industry will further gather to head manufacturers. Qunzhi Consulting predicts that after BOE has acquired the CEC Panda G8.5 and G8.6 LCD production lines, coupled with its own capacity expansion, by 2022, its share of the global large-size LCD market will reach 28.9%. At the same time, the market share of small and medium-sized panel makers will be further squeezed. It is estimated that by 2022, the overall market share of the global Top6 panel makers will be close to 85%.
The Nanjing 8.5 generation line of CLP Panda mainly produces TV, IT and mobile phone products, while the Chengdu 8.6 generation line mainly produces large-size TV products. Li Yaqin, general manager of Qunzhi Consulting, said in an interview with a reporter from China Electronics News that the acquisition will have a significant impact on the competitive landscape of the TV and IT panel market. At present, BOE has become the largest supplier in the global TV market. After the acquisition of CLP Panda, its scale and competitive advantages have become more prominent. CLP Panda TV products are mainly produced by the G8.6 generation line in Chengdu, with IGZO and VA technology as the main focus, focusing on large sizes, such as 50 inches, 58 inches and 70 inches, and closely cooperates with domestic and international brands.
In terms of technology, after acquiring the Hydis team and technology, BOE has continued to expand IPS production capacity and technical strength, but VA technology has little layout. The TV capacity of CLP Panda is all VA capacity. Therefore, the acquisition of the CLP Panda production line can form a complementary effect with the existing technology, and take into account the technical demands of downstream customers for IPS and VA, which will help improve product layout and increase customer stickiness. At the same time, CEC Panda has many patents of VA and IGZO, which can also strengthen BOE's patent layout in this area and further feed back its TV and IT business. In the past two years, CEC Panda has continued to increase its IT market share by leveraging on the technological advantages of IPS and IGZO. It not only cooperates closely with TPV Group in the display panel field, but also cooperates closely with notebook industry chain enterprises such as ASUS, ACER, and Xiaomi.
Based on this, this acquisition will help BOE strengthen its IPS market position in the display market. BOE is currently the largest supplier in the display IPS camp, but its performance in the consumer e-sports market has been sluggish in the past. If the oxide production capacity of CEC Panda can be effectively used and combined with its own technical capabilities, it can further consolidate the e-sports product line The competitiveness of China and the improvement of its supply capacity will lay a solid foundation for its development in the main market segment of e-sports. BOE ranks first in the global notebook panel market, with a market share of 28%, and has strong competitiveness. CEC Panda’s notebook computer panel product line based on IPS+Oxide, especially in the gaming computer panel product line, has a strong cost-effective advantage. After the acquisition, the differentiated competitiveness of this market segment will be enhanced.
This acquisition is in line with BOE’s development goal of becoming a global leader in the semiconductor display field. It can give full play to the company’s comprehensive capabilities and experience advantages in the market, technology, and operation, turn industry downturns into development opportunities, improve the company’s technical reserves, and enhance manufacturing capabilities. , Enrich the product portfolio, strengthen customer cooperation, expand the high-end product market, and continue to consolidate the leading position in the industry.
Li Yaqin said that the acquisition will bring both opportunities and risks to BOE. The opportunity is not only to increase BOE’s overall production capacity and market share, but also to a certain degree of complementarity between the production capacity and technology of the two parties. If the integration effect is achieved, it will effectively support BOE’s further enhancement of the competitiveness of the global display industry. However, this will also expose BOE to two levels of risks: First, as the production capacity becomes larger, if it hopes to achieve the effect of 1+1>2, it will test the integration and management capabilities of both parties; second, the greater the production capacity, the stable output The more important the goods. With such a large scale, in the face of complex and changeable market demands, it is necessary to find a balance between stable operation and flexibility and efficiency.
In this regard, BOE pointed out in the announcement that the company will strengthen market insights, adjust product mix, control costs, improve efficiency, rapidly improve production line competitiveness, and give full play to its technological advantages to provide customers with more and better quality products. In the future, the integration of the liquid crystal industry will be able to develop towards more optimized industrial resource allocation, less irrational price competition, and a more benign industrial chain. Hu Chunming, executive deputy secretary-general of the LCD branch of China Optics and Optoelectronics Industry Association, previously emphasized in an interview with a reporter from China Electronics News that mainland Chinese manufacturers have initially formed a comparative advantage in the field of LCD, but they are mainly reflected in production capacity, shipments and output value. However, it is still at a disadvantage in terms of product added value. In the future, we still need to work hard to accelerate the pace of technological iteration and upgrade, and focus on benefit competition.
