The development prospect of panel industry is promising to enter a period of stable profit

- Aug 04, 2018-

Panel belongs to intensive investment industry, industrial scale determines the right to speak.

Domestic panel industry has experienced from scratch, from the technology had been to the independent research and development of large-scale cross, now about a third of global panel capacity is concentrated in mainland China, domestic manufacturers have preliminary with the industry leading enterprises to compete with global panel's strength, and behind this without the support of national policy and constant input.


Global panel production capacity distribution


In 2008, the global financial crisis broke out, and the industry experienced a global recession. When manufacturers in Japan, South Korea and Taiwan slowed down or stopped building factories, Chinese mainland manufacturers invested in the market against the market.

The 5th generation lines were constructed at this time one after another and produced in a smooth quantity.

It is estimated that in the first half of 2018, the sales revenue of China's display industry will reach 135.6 billion yuan, an increase of 65% year-on-year.

Domestic panel shipping area reached 3.182 million square meters, accounting for 33% of the global market.

Flat-panel display technology is an indispensable part of modern life and application field is very wide, the main downstream areas including smartphones, tablets, laptops, TV, display, etc., and possibly the future in the automotive electronics, industrial control, electronic tags, wisdom, health and other emerging field play an important role.

With the popularization of the Internet and the continuous advancement of the intelligence trend, the information flow impact brought by 5G application in the future will be impacted. As the interface of human-computer interaction, the display screen is expanding in market scale with the increase of the number of terminal devices such as smart phones, and the demand for panels and the area of delivery will increase year by year.

Affected by the continuous growth of global consumer electronics, the global flat-panel display market has maintained growth, and the global panel and module production capacity has increased year by year. Currently, it is concentrated in Korea, Japan, Taiwan and mainland China.

In terms of product structure, the overall market size of LCD remains stable, and OLED will enjoy high growth.

According to the data of the panel industry production and marketing demand and investment forecast analysis report released by the forward-looking industry research institute, the overall market size of LCD in the world was stable between $110 billion and $120 billion from 2014 to 2019, while OLED is expected to maintain high growth, with a compound growth rate of 17 percent from 2014 to 2019.2%.

LCD, as the mainstream technology in the field of flat panel display, occupies the majority of the market share in the field of display

Reviewing the industry transfer process of LCD, the United States took the lead in developing LCD technology, Japanese manufacturers successfully industrialized the technology, while Korean and Chinese Taiwan manufacturers put their efforts into the LCD panel industry at a low ebb, and then took the lead from Japanese manufacturers in the LCD industry.

For a long time, the LCD panel market has been dominated by Korean, Taiwanese and Japanese manufacturers, while Chinese LCD panel manufacturers have a weak voice.

Since 2010, with the gradual rise of domestic terminal brands, Chinese manufacturers have begun to speed up their efforts. Global LCD panel production capacity has been shifting from Japan, South Korea and Taiwan to mainland China, and the proportion of mainland manufacturers' production capacity continues to rise.

From the application field of liquid crystal panel, TV panel is the biggest application field of LCD, most of the LCD panel demand is from TV.

The supply and demand structure of TV panel plays an important role in the balance of the whole LCD market.

In summary, at the present point of time, considering the withdrawal of the production capacity of large international factories, the increase of industry concentration, the net increase of LCD production capacity is very limited, while the overall demand for panels has warmed up. Therefore, it is believed that the supply and demand relationship of the panel industry has been gradually improved and entered the late stage of the reshuffle.

There is still much room for mainland China to increase its share of the global panel market

Because Korean panel factories are in an advantageous position in technology, capital and supply system, and their panel prices are relatively strong, Korean manufacturers still hold about 40% of the global panel sales market share by 2016, among which LG accounts for 34% and samsung accounts for 15%.

Chinese panel manufacturers still have a considerable proportion of middle and low-end production capacity, so their sales share in the global panel market is less than that of panel production capacity. In 2016, Beijing Oriental's market share is about 10%, and China star optoelectronics's market share is about 4%.

With the release of high generation LCD and OLED panel production capacity in mainland China, the global market share of mainland panel factories is expected to increase steadily.

Panel price goes up

Since the middle of 2016, panel prices have risen sharply across the board. For example, the price of 55-inch LCD panels has increased by 25%, while the price of 32-inch LCD panels has increased by 40%.

The price rise has directly brought huge profits to panel enterprises, which has kept the panel industry in a high degree of prosperity for nearly a year.

The increase in panel price is mainly due to the fact that the new production line in the mainland has not been put into production yet, while some liquid crystal production lines of samsung and LGD in South Korea have been converted to produce OLED panels, and there is a gap in the supply of LCD panels for tutors.

Panel prices remained high in the first half of this year, which is expected to enable panel companies to continue to reap better profits.

For the panel industry in the future period, we believe that there are different development logic for medium and large sizes.

Small and medium sizes will fully benefit from the overall screen price increase.

The global panel industry has gradually emerged from the frequent price competition and violent fluctuation profit cycle between multiple regions and manufacturers. In the future, with the improvement of the industry competition pattern, the industry is expected to enter a stable profit period for a relatively long period of time.