Display panel market in mainland China

Writer： admin Time：2024-03-20 11:08

1. Definition and classification
 
The display panel is the most critical part of the monitor. It is composed of a series of small pixels. Each pixel can emit light or change color to form the entire image. It is the main tool for the monitor to provide image information to the outside world. At present, display panels are mainly divided into two categories. One type refers to non-self-luminous, mainly including LCD (liquid crystal display); the other type refers to self-luminous, including PDP (plasma display), FED (field emission display), OLED ( organic light-emitting diode display), LED.
 
2. Industry policies
 
Competent departments and regulatory system
 
The competent departments for display panels are the National Development and Reform Commission, the Ministry of Industry and Information Technology, etc. Among them, the National Development and Reform Commission is mainly responsible for formulating and organizing the implementation of national economic and social development strategies, medium- and long-term plans, and annual plans. Take the lead in organizing the construction of a unified planning system. Responsible for the overall coordination and connection of national-level special planning, regional planning, spatial planning and national development planning. Draft relevant laws and regulations on national economic and social development, economic system reform and opening to the outside world, and formulate departmental regulations, etc. The Ministry of Industry and Information Technology is responsible for formulating and organizing the implementation of industrial industry plans, industrial policies and standards; monitoring the daily operations of the industrial industry; promoting the development of major technical equipment and independent innovation; managing the communications industry, guiding and promoting informatization construction; coordinating and maintaining national information security, etc. .
 
The China Electronics Enterprises Association is a self-regulatory industry organization in the industry. It is mainly responsible for providing advice to government authorities in formulating industrial reform and adjustment plans, development strategies, industrial policies and regulations; organizing electronics companies to carry out international economic and technological exchange activities; organizing training for electronics companies, etc. .
 
Industry-related policies
 
In recent years, the country has successively introduced a series of incentive policies to vigorously promote the development of the display panel industry. For example, in August 2023, the "Electronic Information Manufacturing Industry 2023-2024 Stable Growth Action Plan" issued by the Ministry of Industry and Information Technology and the Ministry of Finance clearly pointed out that it is oriented to new intelligent terminals, culture, tourism, landscape, commercial display and other fields. Promote the expansion of applications of AMOLED, Micro-LED, 3D display, laser display, etc., and support the accelerated paperless alternative applications of LCD panels, electronic paper, etc. In December 2023, the National Development and Reform Commission issued the "Industrial Structural Adjustment Guidance Catalog (2024 Edition)", which clearly pointed out that it is necessary to actively promote the development of display component manufacturing and production-specific equipment, such as thin film field effect transistor LCD (TFT- LCD), organic light-emitting diode (OLED), Mini-LED/Micro-LED display, electronic paper display, laser display, 3D display and other new flat-panel display devices, glass substrates for the LCD panel industry, cover glass for the electronics and information industry, etc. Key components and key materials.
 
 
Development process
 
From the perspective of development history, the display panel industry can be traced back to the 1950s. From 1950 to 1972, display panels were in their first stage, and Radio Corporation of America (RCA) released the first LCD flat-panel TV model, DSM-LCD, in 1968. In 1972, Japan's Sharp bought the LCD technology that RCA was not optimistic about at the time. The following year, it launched the world's first TN-LCD calculator EL-805, marking the second stage of display panels. During this stage of the rise of LCD technology, many Japanese companies followed suit and devoted themselves to TFT-LCD research and development. From 1992 to 1994 alone, Japan's TFT-LCD panel production capacity accounted for 90%-94% of global production capacity, maintaining a monopoly. In 1995, the display panel industry fell into its second recession cycle, and the industry entered the third stage. In 2003, CRT sales were surpassed by LCD for the first time, and LCDs began to be used in desktop monitors and TVs in batches. In 2009, with the support of the government, BOE, which was still losing money, invested a massive 28 billion yuan in financing to build the 8.5-generation line in Yizhuang, Beijing. It was officially mass-produced in 2011, breaking the technology blockade and price monopoly of foreign LCD manufacturers in one fell swoop. In 2015, BOE opened a Gen 10.5 line in Hefei, and the following year, CSOT started construction of a Gen 11 line. The establishment of two of the world's highest generation lines, coupled with the mass production of multiple domestic 8.5-generation lines, has made my country's LCD panel production capacity the leader in the field of LCD panels. As of 2022, China's panel shipment area accounts for nearly 60% of the world's total, accounting for half of the global display panel market.
 
 
 Industry Barriers
 
1. Technical barriers
 
The display panel industry is a technology-intensive industry that involves complex production processes, including thin film deposition processes, etching processes, cutting processes, laminating processes, semiconductor processes, etc.; it also combines multi-disciplinary scientific research results, including liquid crystal, semiconductor, microelectronics, Optoelectronics, etc., are complex high-tech industries with interdisciplinary disciplines. Its technology is highly integrated and difficult to develop. Companies need long-term accumulation and cultivation to deeply understand and master display panel technology. Therefore, the display panel industry has high technical barriers.
 
2. Talent barriers
 
From a technical perspective, the display panel industry covers cutting-edge technologies in multiple disciplines such as optics, semiconductors, electrical machinery, chemicals, and materials, and puts forward high comprehensive quality requirements for industry talents. At the same time, the technology of the display panel industry continues to innovate, requiring enterprises to follow the pace of market development and continue to develop and innovate. Only professionals with rich industry experience and strong innovation capabilities can lead enterprises to complete technological innovation and upgrades. Therefore, the display panel industry has high talent barriers.
 
3. Customer resource barriers
 
Stable customer resources are the foundation and guarantee for the healthy development of an enterprise. At the same time, high-quality customer resources are also one of the core competitiveness of an enterprise. The terminal applications of display panels are different, the corresponding customer groups are also different, and the requirements are also different. From early promotion to verification and then to smooth mass production and delivery of products, it is a complex and time-consuming process. It is also a process of establishing trust and cooperation between supply and demand parties. Therefore, it is crucial for display panel manufacturers to obtain and maintain long-term and stable high-quality customer resources.
 
 
Industrial chain
 
1. Industry chain analysis
 
From the perspective of the display panel industry chain, the upstream mainly includes raw materials and production equipment such as organic light-emitting materials, glass substrates, and polarizers; the midstream refers to display panel production; the downstream refers to the main application areas of the display panel industry, including mobile phones, VR/ AR, wearable devices, vehicle display devices, tablets/computers, laser projection equipment, etc.
2. Analysis of industry leading companies
 
(1) BOE Technology Group Co., Ltd.
 
BOE Technology Group Co., Ltd. was founded in April 1993. It is an Internet of Things company that provides smart port products and professional services for information interaction and human health. It has formed a semiconductor display business as the core, sensors and solutions, MLED, IoT A business system for the integrated development of network innovation and smart medical industry. After thirty years of hard work, the company has developed into a global leader in the semiconductor display field and a global innovative enterprise in the Internet of Things field. At present, the company has multiple manufacturing bases in Beijing, Hefei, Chengdu and other places, with subsidiaries located in the United States, Germany, Japan and other countries and regions, and its service system covers major global regions such as Europe, the United States, Asia and Africa. Judging from the company's operating performance, in the first three quarters of 2023, affected by the complex and volatile global macroeconomic situation and sluggish terminal consumer demand, the company's operating income fell by 4.69% year-on-year, reaching 126.515 billion yuan; net profit attributable to shareholders fell by 80.68% year-on-year. Reaching 1.022 billion yuan. In the future, while consolidating its position in the industry, the company will be committed to promoting the improvement of the industry structure and promoting the development of operations.
(2) TCL Technology Group Co., Ltd.
 
TCL Technology Group Co., Ltd. was established in March 1982 and is mainly engaged in semiconductors, electronic products and communication equipment, new optoelectronics, liquid crystal display devices and other businesses. TCL is a globally competitive smart technology industry group. After more than 40 years of continuous change, innovation, transformation and upgrading, it has formed three core industries: smart terminals, semiconductor displays, new energy photovoltaics and semiconductor materials. Among them, smart display terminals, liquid crystal displays, photovoltaic monocrystals and silicon wafers have reached the world's leading level. The monocrystalline and silicon wafer materials for integrated circuits are domestically leading, and they have begun to actively deploy the integrated circuit business. As a holding subsidiary of TCL Group, TCL China Star Optoelectronics Technology Co., Ltd. is an innovative technology enterprise focusing on the field of semiconductor display. It is actively deploying new display technologies such as next-generation MiniLED, MicroLED, flexible OLED, and printed OLED. Its products cover large, medium and small size panels and High-end display application fields such as touch modules, electronic whiteboards, video walls, vehicles, and e-sports have established core competitiveness in the global panel industry. In the first three quarters of 2023, TCL Technology's operating income increased by 5.21% year-on-year, reaching 133.166 billion yuan; net profit attributable to the parent company increased by 474.14% year-on-year, reaching 1.611 billion yuan.
Industry status quo
 
my country's display panel industry started late, but benefiting from the support of national policies, strong demand from the domestic market and the trend of global display panel production capacity being transferred domestically, my country's display panel industry has achieved steady growth in recent years, and the localization rate of display panels has gradually improve. According to statistics, the display panel market size in mainland China increased from 30.6 million square meters to 91.1 million square meters from 2015 to 2020. It is estimated that the display panel market size in mainland China will reach 112 million square meters in 2023, a year-on-year increase of 5.07%.
 Development factors
 
1. Opportunity
 
(1) The upstream and downstream industrial chains are constantly improving
 
The display panel industry chain is highly supportive, motivating and interdependent among the upstream, midstream and downstream industries. After long-term experience accumulation, the localization level of key raw materials and equipment of display panel companies has generally shown a steady upward trend, which is conducive to reducing raw material costs and equipment costs, improving product competitiveness, and playing a positive role in expanding market share. In addition, the market size and brand influence of downstream display terminal applications in mainland China, such as mobile phones, computers, and televisions, are also gradually increasing. Overall, the increase in the localization ratio of key raw materials and equipment and the increase in the production capacity of the downstream market will be a strong guarantee for the healthy development of my country's display panel industry in the future.
 
(2) Popularization of 5G networks drives demand for smart terminals in multiple fields
 
The 5G network has the characteristics of high speed, large bandwidth, and low latency. It transforms communication between people into the Internet of Everything and is an important cornerstone of the digital transformation of the entire society. Once the 5G network is fully commercialized, many emerging industries will take advantage of the trend and drive economic development. In terms of small size, end users and consumers are increasingly looking forward to new technologies and multi-form products, which will drive the penetration rate of flexible OLED to a certain extent. In medium and large sizes, the expansion of 5G broadband and the improvement of transmission rates can promote the development of the gaming industry, and the demand for e-sports display panels will accelerate in the future. In terms of large size, "5G+8K" is applied to intelligent scenarios in a variety of ways. It is an integrated application of new generation information technologies that empower and support each other.
 
(3) Strong support from national industrial policies
 
In recent years, China's display panel industry has received great attention from governments at all levels, and a series of policies have been introduced to promote the development of the display panel industry. In August 2023, the "New Industry Standardization Pilot Project Implementation Plan (2023-2035)" proposed the development of key technical standards such as Micro-LED displays, laser displays, and printed displays, as well as key products such as new generation display materials, special equipment, and process devices. Standards, as well as application standards for smart cities, smart homes, smart terminals and other scenarios. The release of this policy will help standardize the development of the display panel industry and make an important contribution to the improvement of the industry's technical level and the expansion of its application scope.
 
2. Challenge
 
(1) Macroeconomic and industry fluctuations
 
Display panels are mainly used in downstream consumer terminal electronic products and professional display fields. There is a certain correlation between industry prosperity and the macroeconomic cycle. When the macroeconomic situation is improving, consumption and investment activities increase, and the market demand for consumer terminal electronic products and professional display fields increases, driving the production and sales of display panel companies to increase; when the macroeconomic situation is downturn, consumer purchasing power declines, and investment activities The market demand for consumer terminal electronic products and professional displays has decreased, resulting in a corresponding decrease in the production and sales of panel companies. Therefore, display panel companies should be wary of macroeconomic fluctuation risks.
 
(2) Dependence on the supply of key upstream equipment and raw materials
 
Manufacturers in the display panel industry are highly dependent on upstream key equipment and raw materials. Although domestic upstream manufacturers have achieved localization of some equipment and raw materials, key equipment and raw materials in the array engineering and organic evaporation engineering segments are still mainly provided by manufacturers in Japan, South Korea, Taiwan and other regions. In the context of global trade frictions, the dependence on the supply of key upstream equipment and raw materials may affect the production capacity construction planning and mass production progress of domestic display panel manufacturers to a certain extent, and limit the bargaining power of domestic display panel manufacturers.
 
(3) The market competition in downstream application fields is fierce
 
The market competition for consumer terminal electronic products such as smart wearables, smartphones, tablets/laptops, etc. is relatively fierce. An important way for brand manufacturers to participate in market competition is to continuously carry out technological innovation and product innovation based on accurate research and judgment of market demand, and to carry out differentiated competition. With the advancement of the R&D, design, mass production and launch of downstream terminal products. Manufacturers in the display panel industry need to follow up on research and development and switch production lines to respond to customers' customized and diverse needs in a timely manner. In the process of competition in the terminal product market, in order to seize market share, the number and frequency of new product launches by downstream manufacturers will increase, which will put upstream display panel industry manufacturers under greater pressure, which may have a greater impact on their capacity utilization and product yield rates. Many challenges.
Competitive Landscape
 
my country's display panel industry is relatively concentrated and market competition is fierce. At present, the main participants in my country's display panel market include BOE, CSOT, Huike, CEC Panda and other companies. They can be divided into three echelons according to their market positions. Companies in the first echelon of competition include BOE, China Star Optoelectronics, Shenzhen Tianma, etc. These companies are deeply involved in the display panel industry and have leading technology and product advantages in high-end panels and large-size panels. The gradually released production capacity promotes product market share. The rate has increased rapidly, and at the same time it has strong brand influence and a certain consumer group. The second echelon includes companies such as Huike, CEC Panda, and CEC Rainbow. These companies entered the business late and are mainly deployed in the field of mid- to low-end LCD panels with relatively mature domestic technology. Through long-term operation and development, they have a certain degree of success. sales network and manufacturer production lines. Other mid-to-low-end screen suppliers are in the third echelon, starting late and their product technology has not yet been perfected.
Development Trend
 
In the future, driven by national policies, China's display panel industry will further develop. On the one hand, the application areas and sizes of display panels continue to grow. Due to the development of emerging display applications such as commercial displays, industrial displays, and vehicle-mounted displays, the application fields of display panels have been further broadened. At the same time, the sizes of mainstream TVs and monitors continue to grow, and the trend of large screens is becoming more and more prominent. This has further promoted the growth of the new display industry, and the prosperity of the display panel industry has also increased. On the other hand, my country's technology continues to improve in terms of display effects, display size, and display energy efficiency, which has injected new vitality into display panels and accelerated the development of the industry in the future.
 
Development trends of China's display panel industry
Application areas and size growth
The speed of technology iteration continues to accelerate