The rapid rise of "OLED & LCD" emerging technology display panel market

At present, mainstream global manufacturers are accelerating the R&D and production of OLEDs. Samsung is the absolute leader in this field, and the most competitive domestic company is BOE. As far as the current mainstream display market is concerned, common display technologies include LCD (liquid crystal display), organic light-emitting diode display (OLED), electrophoretic display, and the emerging Micro LED (micro light-emitting diode) display technology. It has unique characteristics and application fields. Among them, LCD and OLED are currently the most widely used technologies, electrophoretic displays are mainly used in the field of reading, and micro-light-emitting diode display technology still has many problems that have not been resolved.

LCD, that is, liquid crystal display, the mainstream technology is TFT-LCD, which is composed of two parallel glass substrates and liquid crystal cells between the upper and lower plates. The upper substrate of the LCD is provided with color filters, and the lower substrate is provided with thin-film transistors ( TFT). OLED, that is, organic light-emitting diode, the OLED display can be divided into active (AMOLED) and passive (PMOLED) according to the driving mode. The main type of AMOLED used in display screens is the active-matrix organic light-emitting diode. The difference between AMOLED and LCD is that AMOLED can realize self-luminescence, so no additional backlight module is required.

Among the many downstream applications, the main application areas of LCD and OLED are quite different. The application area with the largest proportion of TFT-LCD is TV, accounting for 67%, followed by monitors, accounting for 13%, and mobile phones, commercial liquid crystal displays, computers and vehicles accounting for 3%, 5%, 4%, and 1% respectively. The current average size of OLED is relatively small, and the largest application area is smartphones, accounting for 69%, followed by wearable devices and household appliances and TVs, accounting for 10% and 8% respectively.

The status quo and development trend of the industry chain

The LCD panel industry chain is divided into upstream materials, such as glass substrates, color filters, driver ICs, polarizers, liquid crystals, etc.; midstream assembly is power management, control integrated circuits, and liquid crystal panels (arrays, boxes, modules); Downstream are user-oriented terminal products such as TVs, smart phones, and notebooks. We will focus our discussion on midstream manufacturers.

The upstream field of the semiconductor display industry has relatively high technical barriers and industry concentration, and some products rely on foreign suppliers. At present, the major global manufacturers that can provide glass substrates on a large scale are Corning, a Japanese company, Asahi Glass, Electric Glass, and Anhanshite. my country’s domestic glass substrates are in short supply and still need a large number of imports. The supply of color filters, polarizers, liquid crystal materials, driver ICs, and organic light-emitting materials is also mainly concentrated in a few foreign manufacturers.

According to Qunzhi Consulting's research, my country's display device upstream material localization matching rate is 55%, and the upstream equipment localization matching rate remains at about 15%. In 2019, the global display industry output value was approximately 197.2 billion U.S. dollars, of which China’s display device (panel) output value accounted for approximately 37% of the global output, while the global share of upstream materials was only 15%, and the global share of upstream equipment was only 6 %.

Midstream manufacturers are the most important part of the display panel industry. At present, panel manufacturers mainly come from China, Taiwan, Japan, and South Korea. In addition to the traditionally powerful Japanese and South Korean companies and the earlier Chinese Taiwanese companies, mainland Chinese companies are also catching up. At present, there are two very obvious trends in the industry.  First, manufacturers are gradually increasing the production capacity of large-size TFT-LCDs, and the already surplus small and medium-size production capacity is gradually reduced. Secondly, as OLED display technology is used in mobile phones and high-end TVs, With the increasing penetration rate, major manufacturers are actively expanding their OLED panel production capacity, among which mainland Chinese manufacturers such as BOE, China Star Optoelectronics, Shenzhen Tianma, and Visionox have expanded their production significantly. According to estimates by IHS Markit, by 2022, South Korean panel manufacturers’ share of global AMOLED production capacity will drop from 93% in 2017 to 71%, while Chinese manufacturers’ market share will drop from 2017’s 5% will increase to 26% in 2022.

With the continuous popularization and development of smartphones, the market dividend of OLED is obvious. The market share of OLED in smart phone touch panels is expected to reach 37.7% in 2020. As the third-generation display technology, OLED is in a period of rapid growth, and its application market is mainly to replace LCD. The penetration rate of OLED is directly related to its cost, and its cost is directly related to production yield. If the price of components and materials is reasonable and the production yield rate exceeds 80%, the cost of OLED will be lower than that of LCD. If this situation becomes a reality, OLED will replace LCD on a large scale with its performance advantages. In addition, in terms of TV panels, OLED has become synonymous with high-end TV products.

According to HIS statistics, the penetration rate of OLED in Japan is as high as 59%, and that in North America and Europe is about 45%.

The current manufacturing cost of 55-inch UHD OLED is 2.5 times that of LCD panels. If the defect rate can be controlled below 10%, the price difference can be further reduced to 1.8 times. In other words, the current LCD panel still has more advantages in large-size TV applications. High-cost competitive advantage.

The lower reaches of the display panel industry chain are mainly global top-tier consumer electronics brands such as Huawei, HP, Dell, Samsung, Sony, LG, Lenovo, Hisense, etc. I won’t go into details here.

The survival status of domestic enterprises

According to the research of CINNO Research, in the global LCD panel production line, the proportion of the production area of Chinese panel factories will increase from 54% in 2019 to 63% in 2020, and the market share of Korean panel factories will fall below 20%.

For foreign competitors, Japanese companies Panasonic and Sharp did not perform well. The main competitors of domestic manufacturers are South Korean companies Samsung and LGD. While Samsung and LGD are gradually withdrawing from LCD production capacity, LCD panel revenues have declined in 2019. At the same time, BOE, China Star Optoelectronics, and Shenzhen Tianma's TFT-LCD operating revenues have maintained an upward trend. From the perspective of competition level, in terms of the layout of large-size TFT-LCD production lines, domestic BOE, Huaxing, and Huike are in a leading position.

In the field of OLED, Samsung is a global leader and a well-deserved leader. As the world's second-largest manufacturer of mobile phones, Samsung's self-sufficient panel supply still occupies a dominant market position. According to the 2019 global OLED panel shipment rankings released by Qunzhi Consulting, Samsung Display, BOE, and Hehui Optoelectronics display shipments ranked the top three in the world, and Samsung ranked first with a market share of 85.4%. In addition to BOE among domestic manufacturers, Hehui Optoelectronics, Visionox, and Shenzhen Tianma also performed relatively well.

Domestic companies are focusing on BOE, which shipped 39.1 million OLED panels in 2019. Among them, there are 22.1 million rigid displays and 17 million flexible displays. Compared with 2018, the company's rigid panel shipments have increased by 12 times, and flexible panel shipments have increased by more than 4 times. BOE is actively deploying high-generation production lines and has independently planned and built 15 semiconductor display device production lines in many places across the country. The products cover full-size TFT-LCD, and technology types such as AMOLED and Micro OLED. If we simply look at its competitive strength, BOE is gradually replacing the production capacity of Samsung and LG in TFT-LCD, and further achieving a leading position, while there is a gap between Samsung and South Korean company Samsung in OLED manufacturing. In addition, BOE has a global OLED The production line layout is still in a relatively leading position.

In addition, with the continuous expansion of domestic display panel production capacity, relevant local manufacturing equipment companies have also begun to rise. There are many local listed companies in the field of lasers, testing equipment, and assembly equipment that are forming their own technological advantages. In some high-end equipment fields, local companies still have obvious shortcomings. In the panel inspection link, Jingle Electronics has grown to be the leader in domestic panel inspection equipment. Its products cover LCD, OLED, and other flat panel display devices. However, it needs to be objectively recognized that the Array segment inspection equipment with the highest barriers is basically still used by foreign and Taiwanese manufacturers. monopoly. The high-end laser equipment in the domestic OLED production line is still dominated by Korean companies. Local laser equipment companies such as Han's Laser continue to invest in R&D. They have penetrated into the production lines of domestic panel manufacturers in the fields of laser cutting, laser repair, and laser stripping, but they have the highest technical content. In the field of ELA equipment, the market is basically occupied by three Korean companies, AP Systems, Tera Semicon, and Victron.

To sum up, the current mainstream global manufacturers are accelerating the development and production of OLED. Samsung is the absolute leader in this field. The most competitive domestic company is BOE. Small and medium-sized LCD panels are being replaced. The LCD of China participates in the market competition by virtue of its cost advantage, and local enterprises represented by BOE are not left behind in this field.

TFT Module