Abstract: From the perspective of the domestic market, after 2016, with the gradual decline in smartphone shipments, the industry market is saturated, and the integration between industries is also gradually underway. At the same time, in order to enhance the competitiveness and selling points of products, the downstream industry has higher and higher requirements for glass cover products. In the fierce market competition, the glass cover industry has also begun to pay more attention to product research and development, the improvement of production processes and the expansion of product categories, and the industry has entered a period of stable development, and the market size of China's glass cover plate is about 74.421 billion yuan as of 2022. In the future, with the continuous development of 5G, Internet of Things and other technologies, the glass cover industry will usher in a broader space for development.
1. Definitions and Classification
Cover glass is a sheet made of clear glass material that is often used to protect the surface of items such as electronics, home appliances, and light fixtures. The cover glass has the characteristics of high transparency, strong abrasion resistance and easy cleaning. According to the classification of use, the glass cover can be divided into protective glass cover, environmental control glass cover, optical glass cover, according to the material classification, it can be divided into quartz glass cover, tempered glass cover, plastic glass cover, according to the shape and size classification, can be divided into square or rectangular glass cover, round glass cover, custom shape and size, according to the classification of characteristics, can be divided into anti-reflective coating, anti-fingerprint coating, anti-glare coating.
Second, industry policies
1. Competent authorities and regulatory system
The competent departments of the glass cover plate include the National Development and Reform Commission, the Ministry of Industry and Information Technology, etc., among which the National Development and Reform Commission is mainly responsible for formulating and organizing the implementation of the national economic and social development strategy, medium and long-term planning and annual plan. Take the lead in organizing the construction of a unified planning system. Responsible for the overall coordination of national special planning, regional planning, spatial planning and national development planning. Draft laws and regulations related to national economic and social development, economic structural reform, and opening up to the outside world, and formulate departmental rules. The Ministry of Industry and Information Technology is responsible for formulating and organizing the implementation of industrial plans, industrial policies and standards, monitoring the daily operation of industrial industries, promoting the development of major technical equipment and independent innovation, managing the communications industry, guiding and promoting the construction of informatization, and coordinating and maintaining national information security.
The purpose of the association is to abide by the Constitution, laws, regulations and relevant national policies, abide by social morality, serve the industry, play a role as a bridge and link between enterprises and the government, safeguard the legitimate rights and interests of members, assist the government to maintain the order of fair competition in the market, carry out industry management, and promote the healthy development of the industry.
2. Industry-related policies
In recent years, the state has successively introduced a series of encouraging policies to vigorously promote the development of the glass cover industry. For example, in February 2022, the "14th Five-Year Plan for the Development of New Materials Industry in Shaanxi Province" clearly pointed out that the R&D and production technology level of high-performance electronic glass such as high-performance electronic glass substrates and 6-generation cover glass above 8.5 and a series of electronic chemicals for flat panel displays will be further expanded, and the 8.6 generation LCD panel production line will be completed and mass-produced, providing material guarantee for the flat panel display industry chain in Shaanxi. In addition, the state is also actively promoting the development of terminal application fields to further expand the demand of the glass cover industry. In August 2023, the Ministry of Industry and Information Technology and the Ministry of Finance issued the "Action Plan for Steady Growth of the Electronic Information Manufacturing Industry from 2023 to 2024", which proposes to rely on technology and product form innovation to boost traditional electronic consumption such as mobile phones, computers, and TVs, and continuously release domestic market demand. Promote the high-end upgrading of mobile phone brands, cultivate and expand the folding screen mobile phone industry ecology, and promote the maturity of the folding screen mobile phone ecosystem from the perspectives of optimizing costs, improving technology, and increasing adaptation.
Third, the development process
From the perspective of development history, the glass cover industry is mainly divided into three stages: the first stage is soda-lime silicate glass, the second stage is high-aluminosilicate glass, and the third stage is lithium aluminosilicate glass. In 2005, China National Building Materials used float process to manufacture soda-lime cover glass, although it has good scratch resistance, but the drop resistance is poor. Until 2013, Kelishi Materials Co., Ltd. built a 4.5th generation high-alumina cover glass production line, using the overflow process to produce qualified products. In 2014, a wholly-owned subsidiary of Dongxu Group built the first high-alumina cover glass production line using float process in China, and a subsidiary of China CSG Group and China National Building Materials (Bengbu) Optoelectronic Materials Co., Ltd. produced qualified high-alumina cover glass in 2016 and 2017 respectively. Subsequently, some enterprises began to enter the high-end high-aluminum cover glass, and continuously strengthened the research and development and production of high-end products, and made great breakthroughs in recent years. After 2018, lithium-aluminosilicate glass began mass production, such as in 2018, Rainbow Group used overflow technology to achieve mass production of lithium-aluminum-silicon composite strengthened cover glass, and in 2019, Sichuan Xuhong Optoelectronics used float process to launch and achieve mass production of lithium-aluminosilicate glass that can be re-strengthened.
Fourth, industry barriers
1. Technical barriers
The production process of glass cover involves mechanical design, automation, optics, material science, electronic engineering, printing, control engineering, industrial design, management and other fields, and has strict requirements for product size, slot position, flatness, surface hardness, strength, light transmittance, thickness and shading of the printing layer, and there are many production processes and high technical thresholds. At present, many key technologies in the industry are mastered by a few major enterprises, with many years of technical experience accumulation, it is difficult for new entrants to fully grasp the technology involved in the industry in the short term, produce high-quality products, and the industry has a high technical threshold.
2. Scale barriers
Cover glass manufacturers must have a certain production scale and continuous supply capacity to meet the order needs of many customers for different types of products in a timely manner. At the same time, large-scale production enterprises can improve the bargaining power in cooperation with upstream suppliers, and can reduce the procurement cost of equipment and raw materials. In addition, the business activities of large-scale production enterprises are relatively stable, which can ensure the continuous progress of R&D and scientific and technological innovation, and continue to maintain the technical advantages of products. The scale effect of existing large-scale production enterprises makes new entrants face scale effect barriers.
3. Customer resource barriers
The global brand concentration of consumer electronics products such as mobile phones and tablets is relatively high, mainly concentrated in internationally renowned brand manufacturers. If the glass cover manufacturer wants to become the supplier of the internationally renowned brand manufacturer, it must first pass its strict supplier certification, which is difficult for the enterprise to pass the certification, and there are few enterprises in the industry that can become the supplier of the international well-known brand customer. At the same time, due to the high cost of supplier conversion, the partners of internationally renowned brand manufacturers are relatively fixed and generally will not be easily replaced. As a result, new entrants will face high barriers to customer resources.
Fifth, the industrial chain
1. Analysis of the industry chain
From the perspective of the industrial chain of the glass cover industry, the upstream mainly includes raw materials such as glass substrates and coating materials, polishing machines, coating machines and other processing equipment, the midstream refers to the glass cover industry, and the downstream refers to the terminal application fields. The company purchases raw glass from the upstream, customizes the production of glass covers for specific products according to the needs of downstream customers, and finally sells them to smart terminal manufacturers such as smart phones, wearable devices, tablet computers, vehicle display devices, digital products, and medical equipment. The industrial chain of the glass cover plate industry is shown in the following figure:
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