Since entering 2022, the color TV market and IT market at home and abroad have not been "beautiful". This puts the manufacturer of LCD panels under particular pressure. In addition to price reductions, some companies have opened the production reduction mode. This background will be a potential pressure for LCD panel companies that are still "expanding production". Especially as this year's LCD panel new factory investment plan more TCL Huaxing is even more so.
Two pieces of data look at the future of the display panel
According to jibang's WitsView panel quotation in late April announced on March 20, all TV panels of all sizes fell due to the weak demand. In particular, the size of the previous decline, which had narrowed, fell further sharply. Among them, the 65-inch single-month decline of $12, a decline of 8.28%; the 32-inch TV panel that has been flat for two consecutive months, the price of $38 in late April, down $2 from the end of last month, a decline of about 5%; the IT LCD panel, also affected by the cooling of demand, maintained a downward trend, falling by 5-7%, of which the laptop panel fell slightly higher than the display panel.
In this regard, Fan Boyu, deputy general manager of research at the Jibang Display Research Office, pointed out that it is speculated that some size panels may have fallen below the cash cost price. Industry analysis also believes that LCD panel manufacturer brands have the impetus to further reduce production. The withdrawal process of the LCD line of Korean enterprises will also be accelerated.
Unlike the downturn in the LCD panel market, the OLED panel industry is now on the "outlet": the market research institute DSCC recently raised its OLED market forecast, believing that from 2021 to 2026, the market will grow at a compound annual growth rate of 9%, and the market revenue will reach $65 billion by 2026. Among them, the display panel will grow at a compound annual growth rate (revenue) of 70%, the compound annual growth rate of notebook panels is 52%, and the compound annual growth rate of tablet panels is 52% - medium-sized and IT panels will be the core and focus of OLED panel growth in the coming period.
In this regard, since last year, Samsung, LG, BOE, visionary have thrown out plans to build RGB-OLED 8.5/8.6 generation line. As a result, the penetration of OLED panels in the IT industry is enhanced, and the growth space of future "non-backlit, self-illuminating, thinner and lighter, and even flexible medium-sized and IT display panels" will be seized. The 6th generation line project, including the 6th generation OLED plant (A4-2) (expected to be put into operation in the third quarter of this year), which is remodeled by Samsung's LCD factory (L7-2) that will close in early 2021, will also provide more capacity for IT OLED panels in 2022.
Chen Hui, general manager of the industry research institute Aowei Ruiwo, once said that according to the industry conditions, the OLED 8.5/8.6 generation line to achieve the best economy is 60,000 pieces / month. According to the 8.5th generation (2200mm×2500mm) glass substrate can cut 96 13.3-inch panels, such a line can provide 60 million 13.3-inch panels per year - even if only a few companies build a few 8.5/8.6 generation OLED IT panel lines, its impact on the global supply of IT panels will be huge.
On the 8.5/8.6 generation line, the success of OLED will inevitably squeeze out the existing share of LCD products, which in turn will push the overall production capacity of the LCD market to further "excess", resulting in greater market pressure. Therefore, the direction of industry investment is further upgraded to OLED, rather than sticking to the traditional LCD technology, which is the consensus of many panel companies.
The two kinds of investment in the panel industry are different understandings of the future
At present, the "correctness" of the display panel industry's investment in OLED is beyond doubt, and it has also become the focus of future disputes between industry enterprises. According to media reports, since December 2021, LG has begun evaluating evaporation equipment for the 8.5th generation OLED production line for IT at its partner Sunic System's Paju plant in Gyeonggi Province. Samsung Display began evaluating the 8.5th generation OLED deposition process earlier and is working with Japanese manufacturer Ulvac to test the 8.5 generation full cut/vertical deposition equipment.
According to the research of Qunzhi Consulting, the pace of global panel manufacturers' investment in LCD new lines has slowed down significantly, and the investment in OLED still maintains a positive attitude. Moreover, the direction of OLED investment is upgrading from the 6-generation line to the 8.5-generation line; it is expected that there will be three 8.5-generation OLED IT production lines in 2025 to usher in mass production. At the same time, w-oled and QD-oled for TV will continue to expand production capacity. These changes may lead to the production capacity growth of "OLED" in the next few years, which will become the biggest "competitive variable" in the panel industry.
Of course, in this context, some companies are still optimistic about the "expansion" of the LCD product line: for example, on the evening of December 2, 2021, TCL Technology announced that it intends to invest 15 billion yuan to expand a 6th-generation LTPS LCD display panel production line (t5) with a monthly processing of 45,000 glass panels, mainly for small and medium-sized high-end display products, with a planned investment period of 48 months. TCL Huaxing's 8.6th generation oxide semiconductor new display device project (t9 project), which has progressed smoothly since the start of construction in March 2021, has entered the equipment procurement and installation stage. The 35 billion yuan LCD project plans to have a production capacity of 99,000 substrates per month in the first phase and 81,000 substrates per month in the second phase – almost one of the world's largest 8.6-generation LCD projects, with the main targets being high-end demand in the IT, automotive and specialty fields.
In addition, the recent deep Pegasus (000050. SZ) announced that it will invest 33 billion yuan to build an 8.6-generation a-Si and IGZO LCD panel line in Xiamen (processing 120,000 glass substrates per month), and also target products for display applications such as automotive, IT displays (including flat panels, laptops, displays, etc.), industrial products, etc.
"The main target markets are around the medium-sized, IT market, but some people choose LCD, some people choose OLED - the existence of industry investment divergence will inevitably make the future different 'benefits' of enterprises with different technology choices." Industry insiders pointed out that unlike LG, Samsung, Visionox, and BOE's enthusiasm for the 8.5/8.6 generation OLED, companies represented by TCL will invest huge amounts of money in LCD online, constituting a dispute between "next-generation technology and mature technology".
In this regard, there is a view that the expansion of automotive, commercial display and other applications and the large size of the display panel unit specifications are enough to consume the new LCD LCD panel production capacity, and there is no need to "worry" about the expansion of IT-oriented LCD production capacity. However, there are also some views that the future of new LCD panel lines and capacity expansion is actually not in their own hands: if OLED encounters technical setbacks in expansion, these LCD lines will naturally be "profitable"; but if OLED expands smoothly in the high-generation line, then the LCD panel line capacity may accelerate excess and elimination, especially lcd new lines facing pressure such as equipment depreciation, and the competitiveness will be "worrying".
For the latter, a case for reference is that the yield of Samsung's QD-OLED product has climbed rapidly: Samsung's internal announcement said that the yield of the QD-OLED panel has reached 75%, and it will soon achieve a yield of more than 90%; Samsung has also begun the research and development work of the next stage of QD-OLED technology upgrade. Although the technical structure of QD-OLED and the 8.5/8.6 generation RGB-oled for IT is obvious, the increasing maturity of OLED display technology is beyond doubt. In particular, the evaporation of IT's 8.5th generation OLED production line adopts a half-width method, which will greatly reduce the "technical risk" and improve the speed of production line construction.
More importantly, the display panel from the liquid crystal backlight display products, to OLED and other new self-luminescent products upgrade, is the industry trend. Companies that invest in LCDs now cannot bypass the "trend" that will still need to invest in new technologies such as OLED in the future. Just as Samsung and LG will now stop production, demolition and sale of many LCD panel factories, and the plant and some facilities are used to build OLED panel factories; the technological upgrading of the display industry will not stop - investing in OLED surface lines, investing in OLED high-generation lines, although there are technical risks, but there are more strategic benefits in the future trend.
In such an industry background, whether the LCD line for IT and other newly invested by enterprises such as TCL will become the "pressure bearer" in the era of accelerated expansion of OLED, and even face the question and competition of "product technology advancement", it will be a question that must be considered. Broadly speaking, the current display industry pattern, especially since the second half of 2021 LCD panel prices continue to decline, the era of relative overcapacity, whether it is necessary to expand the production of LCD panel products on a large scale, it is particularly necessary to "think twice".
In the history of flat panel display, there were also some companies around 2008 who "insisted on expanding plasma PDP production capacity", and became "backward" representatives in the rise of LCD panels after that, and many other investment failure cases of wrong teams on technical routes can be used as a reference. Now, the display panel industry, LCD and OLED technology competition has reached a critical tipping point, the new LCD line, whether it will hit the OLED ceiling, we wait and see.