Overseas giants hit China's panel industry for five years

Editor's note:

The global panel industry has never been as tragic as this year. The top six giants suffered huge losses in all quarters. But behind this, people suspect that this is a blow to the Japanese and South Korean giants who have suffered a loss of 800 since they were pressured by China’s tussles. In fact, over the past five years, China has been repeatedly suppressed by two rounds: First, Julong Optoelectronics; once a three-in-one operation between Shanghai Radio and Television NEC, BOE, and Dragon.

A few years later, I wonder if China's LCD panel industry will reproduce the rise and fall of the original CRT. The latter is currently beginning to have some room. As the industry is at a low ebb, panel giants in South Korea, Japan, and Taiwan have begun to shrink their investment, while the two most expensive projects in mainland China have been mass-produced.

"For Huaxing Optoelectronics and BOE two domestic high-generation projects, the current market environment is the most difficult." Gu Zhihua, director of the Flat Panel Display Engineering Research Center of Fudan Advanced Materials Laboratory, gave the opposite judgment.

He said that there are indeed external reasons for industrial business difficulties, but as far as the mainland is concerned, the strategy of panel giants from Japan, South Korea and Taiwan is hitting harder than ever. For more than a year, the Chinese government and enterprises have decided to gain the right to discourse in the panel industry, which has triggered a new suppression.

This does not seem to be a conspiracy theory. Overseas giants blocked the layout of China’s TV upstream. The “First Financial Daily” has reported many times in the past. It almost caused the Chinese panel industry to fall behind by 5 years, and even missed the first wave of golden growth in the LCD TV market.

5 years

Gu Zhihua said that the mainland has to do panel, it is necessary to get the right to speak in the industry, and it is difficult to give up again. This is China's "last fight."

Right now, panel makers in Japan, South Korea, and Taiwan are continuing to create an atmosphere of operational difficulties and price reductions. The goal is to shock the mainland companies entering the mass production period, especially South Korea’s Samsung, and the losses will not hurt the bones at all.

According to statistics published by the public in the past six years, Samsung's panel should be "business" in addition to this year's performance, has been a big profit, accumulated net profit of about 8.3 billion US dollars, an average of more than 1 billion US dollars; over the same period, LGD in addition to the loss of 933 million in 2006 Outside the U.S. dollar, the net profit reached 4.932 billion U.S. dollars, with an annual average of 800 million U.S. dollars.

Japan's Sharp panel ranks only fifth in the world, much smaller than its male counterparts in Korea. However, its net profit for the same period totaled approximately US$2.4 billion, and its net profit rate was even better.

Taiwan’s Chi Mei and AUO, ranked third in the world and fourth in the world, are also very moist in the past. In the same period, AUO's cumulative net profit reached US$3.844 billion, and Chi Mei’s cumulative net profit reached US$1.374 billion.

Statistics show that from 2007 to 2008, the top five giants earned the most. Samsung’s net profit for the same period was US$4.13 billion, LGD was US$3.36 billion, AUO was US$3.02 billion, Chimei was US$1.74 billion, and Sharp was US$1.3 billion.

During the same period, mainland Chinese companies were deeply stuck. A few days ago, TCL Group Chairman and President Li Dongsheng chatted with friends and inadvertently referred to the Shenzhen Julong project five years ago and the four-year-long marathon negotiations with Sharp.

In 2006, Shen Chao Company, directly subordinated to the Shenzhen State-owned Assets Supervision and Administration Commission, established Julong Optoelectronics with four color TV companies, including TCL and Skyworth, and plans to build a 6th-generation line. As all parties raise funds and plan in different directions, the project will eventually be fruitless. end.

“At the time, the technology supplier of Julong Optoelectronics Project was Sharp.” According to a person from the TCL Group, after the withdrawal of other participants, the Shenzhen Municipal Government and TCL continued discussions with Sharp on the introduction of the 8.5-generation panel project.

I did not expect to talk about it for 3 years. In mid-2009, both parties fell through due to patent fees. The person said that Sharp has a lot of "overlord terms" and the TCL side simply cannot afford it.

Another delayed cooperation case was the “triple play” project of BOE, SVA NEC and Longteng Optoelectronics. At the end of 2006, the three parties had signed an agreement to integrate and expand their respective businesses and achieve the goal by the end of June of the following year. However, it was soon defeated by Samsung and Xiagen LGD, which together with the industrial warming, finally failed.

Three years later, Shanghai Radio and TV NEC went bankrupt, and Longteng ran counter to ST Taiguang. BOE has struggled and repeatedly issued additional projects to implement the Hefei and Beijing projects. However, the pressure on the depreciation has not been truly profitable.

Over the past six years, the Chinese market has become a feast of overseas giants. Even the “Home Appliances Going to the Countryside” policy, which stimulates domestic demand, has almost no oil for local panel companies.

Industry chain

DisplaySearch data shows that over the past two years, the growth rate of the LCD TV market has rapidly declined from the initial 90% to 20% to 30%. The data of the Yikang data is similar.

It is predicted by the outside world that the growth of global shipments in 2011 will be limited, and that the Chinese market, which is singing loudly, will even suffer negative growth. In the past quarter, the giants listed weakness in the Chinese market as the reason for the decline in performance.

In 2009, high-level TV manufacturers had declared that China's LCD TV market will enter gold for 10 years, and now it may seem to be a slogan. A TCL Group executive said that if the 2006 or 2007 project is negotiated, or determined to do it himself, it should not miss the growth period.

It seems that the 8.5-generation lines of BOE and Huaxing Optoelectronics, which have just been put into production, have not caught up with the rhythm. The panel price has continued to decline for 16 months. The giant has said that the price has been reached, and even lower than the cost in mid-year.

The two major domestic projects are currently in production rampage. In the first half of next year, BOE’s 8.5th-generation line will be fully produced. But next year's panel and LCD TV market is uncertain.

One is equipment depreciation. Li Yaqin, research director of Group Intelligence Consulting, said that the larger the panel size, the higher the depreciation amount of the equipment, and the general depreciation cost accounts for 15% of the total panel cost. The depreciation period of equipment is generally 7 years. Sharp and Sharp, Samsung and other giants invest early and will complete depreciation faster, which means that they will increase their profit margin by 15% and they can flexibly adjust prices.

The depreciation of LGD, Samsung, and AUO's generation lines will end in 2014-2015, and the depreciation of Huaxing Optoelectronics and BOE will be completed in 2017.

Shen Chaohou, chairman of Shen Chao Optoelectronics, told this newspaper last year that Huaxing Optoelectronics' investment was 2-3 years later than that of Samsung. If they are late, the giants will cut their prices, and they will lose money once they are put into operation.

The weak industrial chain is another risk. Li Yaqin said that the upstream materials of the panel are glass substrates, polarizers, color filters, and liquid crystal molecules, and the cost accounts for about 80% of the total panel cost. And they are mainly in the hands of overseas companies such as Samsung and Corning joint venture companies and LG Chemicals. Even if China's panel production is mature, it cannot be fundamentally cost-competitive. Currently, local companies such as Rainbow, Dongxu and Shengbo are also in the upper reaches of the layout, but they are far from autonomous.

However, Li Dongsheng said that LG Chemical and Asahi Glass have actively supported Huaxing Optoelectronics and setting up a factory in China would transfer some of the technology. Through product launches and the flow of technicians, advanced technologies will be spread to Chinese companies and localization of upstream materials will be promoted.

Gu Zhihua said that the difficulty of high-generation projects in China is a necessary process. CRT TVs have not yet been delisted, and LCD flat panel industry has at least 20 years of development. If we have the right to speak, China will become a major city in terms of manufacturing and R&D.

As for OLED, he thinks that it is the giant's ecstasy and aims to shake the confidence of the mainland's panel industry. Otherwise, they will not undergo major adjustments in the past two years. As for the material part, once the scale of Chinese panel manufacturing is established, overseas companies must rush to support it.

An industry analyst pointed out that the localization of CRT kinescopes in the year created the pattern of China's color TV giants and stabilized the Chinese market. Today's LCD panels can not only stabilize the Chinese market, but also can grab the emerging markets that were dominated by international giants in the past. In the past CRT technology era, the Chinese industry was ten years behind and the LCD panel was only five years behind. However, with the LCD panel localization industry chain, perhaps in the next generation of display technology, China will only be a year or two behind, even with the international giants. starting line.

Crisis plasma?

Global tablet giants are undergoing adjustments and have yet to see new moves by Chinese flat panel display companies.

Peng Yi, director of research and development of Zhongkang, said that the panel pricing right is being transferred from the upstream panel manufacturers to the downstream terminal manufacturers. In the future, it is not who has the large capacity, but who has a more stable and reliable whole machine to the sea.

The problem is that the global color TV market supply chain system is relatively stable, how to compete for new outlets?

Plasma crisis

The first is still the Changhong plasma project with an investment of more than 4 billion yuan. The outside world was pinched by Panasonic because of the suspension of production of two plasma factories.

Changhong spokesperson Liu Haizhong told the First Financial Daily that the Japanese economy and Japanese home appliance companies are in turmoil and cannot misjudge the future of Changhong plasma projects because of Japanese companies' adjustments. Moreover, Panasonic just adjusts and does not exit the plasma field. In fact, Samsung and LG are still doing plasma, and Hong Europe plasma is also supplying to domestic manufacturers.

He said that plasma has obvious technological advantages in terms of large-screen and 3D. Not to mention the fact that China is about to open a 3D TV channel, and that next year's Olympics broadcast has required the provision of 3D channels, which are all good news for the plasma TV market.

According to reports, in November 2007, Changhong began to strengthen the layout of raw materials, devices, and equipment technology. Currently, there are 23 companies in the nine major areas of glass powder, fluorescent powder and other areas to carry out substantive cooperation, which accounted for 90% of the cost of plasma panels.

A mid-level company from Shanghai Panasonic Plasma Display Company revealed that since Changhong began to invest in plasma, he realized that the upstream industry chain is too single and must lay out material links.

At present, Changhong plasma part of the upstream material has been achieved domestically. The middle level pointed out that even if the supply of foreign plasma upstream part of the fracture, Changhong can rely on the local community can do, but short-term fluctuations in yield may occur.

However, the global market is not optimistic. Although the 3D concept drove the shipment of plasma TVs in 2010, the price of LCD TVs dropped even more, causing plasma TVs to fall again this year. DisplaySearch expects to ship only 17 million units worldwide this year, a decrease of 9% year-on-year, and then drop about 5% to 6% each year.

An industry person familiar with the Changhong plasma project pointed out that the Changhong plasma project is missing. At first, Changhong engaged in plasma to solve its own lack of screen, and second, it hoped to create its own unique competitive advantage. As a result, external cooperation was affected, resulting in a narrow downstream outlet.

Peng Yu pointed out that the Changhong plasma project was not profitable, but Changhong Plasma TV made money. Because the market competition is not fierce, domestic manufacturers can use this to create differentiation. If the domestic color TV manufacturers on the amount, there is still great potential to be excavated.

According to data from Zhongkang, in the first three quarters of this year, domestic plasma TV sales reached 1.6 million units, an increase of 48% year-on-year, of which Changhong’s share was as high as 45% and Panasonic's share was also 37%.

Competing for the sea

Changhong Plasma's first-phase engineering design capacity is 2.16 million pieces. According to the current sales volume, the production capacity is idle.

“Downstream outlets can also be solved through capital cooperation.” Peng Yu said that currently the Changhong plasma project is solely funded. If the company can introduce multiple capitals and fade away the image of Changhong, the market can look forward to it. For example, the reason why the TCL8.5 line is named Huaxing Optoelectronics is to introduce multiple investors.

However, capital cooperation is still only a unilateral idea in the industry or manufacturers. For the 8.5-generation panel line of BOE and Huaxing Optoelectronics that have already been put into production, the issue of expanding the downstream outlets is imminent.

Controlled by real estate and the exit of home appliances to the countryside, the Chinese TV market is likely to see zero growth next year. The newspaper learned from TV manufacturers such as Skyworth, TCL, Hisense, and Changhong that not only is the panel giant looking for a stable downstream outlet, domestic TV manufacturers are also looking for the next market growth point, while Southeast Asia, South Asia, the Middle East, South America Emerging markets, such as China, are the center of attention for Chinese TV manufacturers.

The top management of Skyworth and TCL have recently pointed out clearly that overseas emerging markets have a high share of Japanese brands. However, the European debt crisis has hit the strength of Japanese manufacturers, coupled with the appreciation of the yen, etc. Chinese TV brands have begun to have room for substitution. In addition, 10 countries in China and ASEAN have achieved “zero tariff”, which has brought great opportunities for the export of self-owned brands of home appliance companies in China.

“The growth momentum of global flat-panel TVs in 2012 will mainly come from emerging markets.” Li Yaqin, research director at Quzhi Group, said that the performance of domestic color TV brands in emerging markets is quite eye-catching. With the gradual strengthening of domestic panel resource advantages, China’s TV is expected to be in 2012. There will be a 30% increase in brand shipments, and the share of Chinese TV brands in the global market will also increase from 21% in 2011 to the highest level in 24%.

For BOE and China Star Optoelectronics, whether or not they can grasp the needs of mainstream domestic color TV manufacturers will also become the key to the success of China's flat panel industry. Compared to BOE, Huaxing Optoelectronics is relatively optimistic. Huaxing Optoelectronics is still in the ramp-up stage of production and it is still not enough to satisfy TCL's own needs. Through this time, it can seek cooperation from domestic color TV manufacturers.

In spite of this, BOE and Huaxing Optoelectronics are in a very difficult situation in the current situation where panel prices continue to decline. Gu Zhihua, director of the Flat Panel Display Engineering Research Center of Advanced Materials Laboratory of Fudan University, pointed out that the short-term losses of China Star Optoelectronics and BOE 8.5 are inevitable, but the country will definitely support taxation and tariffs.

The newspaper learned from several TV manufacturers that although major TV manufacturers have different opinions on increasing import tariffs on panels, it is basically a foregone conclusion to increase panel import tariffs, and will be announced as soon as possible. The only change may be the rate of tariff increase. .

The increase in tariffs will also ease the market competition pressure of domestic panel makers to a certain extent, giving BOE and China Star Optoelectronics time to compete for downstream customers. After all, the Samsung 7.5-generation panel line began construction at the end of May this year and the time of completion has been August 2012.

Coping with changes in the Chinese market, Japanese and South Korean giants to expand OLED TVs

It seems that everything comes from China's development of high-generation panel industry. In the tragic reality of continuous decline in the panel market price, the giants of Japan and South Korea, led by Samsung and LGD, began to blew OLED style.

"OLED TV will enter the market in 2012, and it is basically a foregone conclusion." Li Yaqin, director of research group of flat panel research institutions, revealed to "First Financial Daily" yesterday that Samsung, LGD and Sharp have made it very clear that they will be ready for next January. The CES show will display its own OLED TV products, and LGD also made it clear that it will start production of OLED TVs in the fourth quarter of next year. "All signs show that 2012 will be the first year of OLED TVs."

It is reported that the OLED panel is the third generation of display technology following the LCD panel. Compared with LCD, plasma and other second-generation display technologies, OLED technology is the biggest advantage of ultra-thin size, the thinnest to 0.005 centimeters, can be folded on the flexibility of the substrate curl, color and other display effect should be significantly higher In the LCD panel, Samsung, Sony and other Japanese and Korean consumer electronics giants regard it as a new technology to replace LCD.

In June of this year, Samsung Mobile announced that the 8th generation AM-OLED panel test line will be put into use in May next year. It can cut 46-inch, 55-inch and other large-size OLED panels. Samsung plans to use the OLED panel from smartphones and tablets. The computer extends to television and other fields. In August, LGD also said that it will invest US$2.83 billion to build its eighth-generation OLED panel project.

However, at the time of the news, the production time of Samsung and LGD8 generation OLED panel was in 2014. Why in the short space of several months, the OLED TV winds of Japan and South Korea’s panel giants are accelerating?

"If there is no domestic panel high generation production line, the giants of Japan and South Korea will not suddenly accelerate OLED TVs." Peng Ye, research director of China-Korea, said that the equipment depreciation of the panel line of Japan-Korea panel giant is not over yet, let alone Samsung. Just invested in the 7.5 generation line in Suzhou. From this point of view, the Japanese and South Korean panel giants are not pushing a profitable OLED TV, and its purpose is nothing more than to control the leading right of the flat panel display technology and to create the pressure of the domestic high-generation panel project.

But Samsung and LDG's strategy on OLED TV is being implemented. According to news from the Japanese media, South Korean manufacturers represented by Samsung have invested in OLED panels, and the number of orders received by the top eight semiconductor and LCD manufacturing equipment manufacturers in Japan in the fourth quarter was close to 290 billion yen, a 30% increase from the third quarter. .

“Samsung and LGD have vented their OLED TVs, but they are trying to hold the nose of Chinese manufacturers and fundamentally grasp the right to speak on the flat panel display.” Gu Zhihua, director of the Flat Panel Display Engineering Research Center of Fudan Advanced Materials Laboratory, pointed out that Samsung and LGD have vented OLED TVs. Actually, it is a guilty squad whose purpose is to disrupt the high school panel project of China.

A number of high-level TV manufacturers and LED industry technical experts all expressed to this newspaper that OLED TVs and OLED lighting are currently in the stage of technological development and are far from industrialization. Because, at present, large-size OLED panel technology still has many technical bottlenecks—the increase in yield, the costly processing of the substrate, the need to increase the service life, and so on. Currently, the OLED yield rate is less than 50%.

Public information also shows that LGD mass production of OLED time is the second half of 2014, and before the mass production, will launch a small amount of OLED TV panel in 2012, for LG's 55-inch TV products.

DisplaySearch analysts pointed out that, according to the current OLED development forecast, OLED TV will enter the market in late 2012, adding to the market competition of 40-inch models. However, due to the high prices and the limited number, by 2015 there will be only 2.5% market share of 40 inches and above. It is conservatively estimated that the price of new OLED TVs will be 2 to 3 times higher than that of high-end LED LCD TVs.

All news and opinions do not seem to determine the exact time point for the popularity of OLED TVs. Because OLED technology is still in development, whether it will change rapidly due to other technologies and market reasons is actually unknown. The results of the game between plasma TV and LCD TV technology also showed that leading technology won't necessarily win.

To win the market, it is certainly a concentrated expression of the strength of the flat panel display industry chain, but today the power of the flat panel display industry chain in China is growing rapidly. Whether to follow or not depends on the final strength and the outcome of the market game. After all, China's flat panel display industry chain game has just reached the middle plate stage.