'Lack of core and less screen' has always been the collective pain point of China's electronic information industry. In the panel industry, especially the production of OLED panels representing a new generation of display technology, Samsung, LG and other Korean companies have been monopolized.
In recent years, domestic panel makers represented by TCL and BOE have invested heavily in OLED panel production lines. On May 22nd, TCL announced that it invested nearly RMB 42.7 billion in Shenzhen to launch the second 11th generation line to seize the commanding height of oversized panels. At the same time, the layout of large-scale printing OLED panels. So, with the large number of Chinese OLED production capacity released in the next two or three years, whether it can break the current monopoly status?
150 billion yuan to the panel
On May 22nd, TCL Group announced that it plans to invest in the construction of a 11th-generation ultra-high-definition new display device production line (t7 project) in Shenzhen, which will produce and sell 65', 70', and 75' 8K ultra-high-definition displays. And 65'OLED, 75'OLED display and so on.
It is reported that the total investment of the project is about 42.683 billion yuan, which was jointly invested by TCL Corporation, China Star Optoelectronics and Shenzhen Major Industrial Development Fund. It plans to officially mass production in March 2021.
According to Li Dongsheng, chairman of TCL Group, at present, Huaxing Optoelectronics has built two 8.5-generation lines in Shenzhen. The t6 project is Huaxing's first 11-generation line factory. The project will complete the capping of the main plant in 12 months and realize the main equipment in 18 months. Moving in, created a new speed in Shenzhen. Huaxing is confident that the t6 project can be completed and put into operation in advance, becoming the most efficient project on the hillside of 11 generations.
According to public information, China Star Optoelectronics is the operating entity of the semiconductor display business of TCL Group. TCL Group directly holds 85.7135% of equity of China Star Optoelectronics, and China Development Fund and Guangdong Yuecai Trust hold 11.0024% and 3.2841%, respectively. Fixed income, TCL Group will buy back in accordance with the investment agreement).
According to TCL sources, the T6 project currently under construction by TCL is scheduled to be mass-produced in early 2019. The re-investment and construction of the 11-generation panel production line will mainly favor large-scale, ultra-high-definition panel industry development prospects.
In recent years, TCL Group has invested heavily in Huaxing Optoelectronics Panel business. According to reports, currently there are five production lines under construction and under construction by China Star Optoelectronics, with a total investment of nearly RMB 150 billion. Among them, TV panel lines are built on Shenzhen, including two 8.5-generation lines (t1 and t2) and one 11-generation line (t6); small and medium-sized panel lines are all built in Wuhan, including a 6-generation LTPS-LCD line (t3) and an AMOLED line ( T4)
Industry analysts pointed out that with the upgrading of consumption and the drive of new display technologies, the TV panel market is shifting to large-scale, ultra-high-definition displays. The market demand for high-end color TVs of 65 inches and above is growing rapidly. It is expected that 8K products will enter high-speed development after 2018. Period. 'TCL chose to invest in the second 11th generation line project at this time, apparently intended to preemptively strategically layout the large-size ultra-high-definition panel market to meet the market demand for the growing 8K products in the next few years. 'The source said.
Breaking the monopoly of OLED Korea?
OLED technology is recognized as the next generation of display technology. In recent years, domestic color TV companies have launched new OLED TVs. Market research company IHS Markit pointed out that in 2017, in the high-end TV market of over $2,500, the OLED TV market accounted for 51.3% of the total. For the first time, it surpassed the LCD market share. In 2018, the proportion of OLED TVs in the high-end TV market of US$2,500 will rise to 70.7%, making it a mainstream product in the high-end market.
However, for domestic color TV manufacturers, they have to face the embarrassing situation that large-size OLED panels are heavily dependent on imports. At present, Samsung Display and LG Display, two major panel makers in South Korea, have monopoly positions in small and medium size and large-size OLED panels. It is also difficult to shake within.
While announcing the construction of the t7 project, the TCL Group issued an announcement that the t7 project planned for the production capacity of some OLEDs at the same time in order to achieve breakthroughs in domestic large-size OLED products and to guide the industry's new technology trends.
Regarding this, industry sources have pointed out that as the only panel maker with a clear OLED production capacity in the 10.5/11 line construction, this means that TCL may want to use OLED technology to achieve 'overtaking' of large-size panel technology.
Currently, in addition to TCL, other panel companies such as BOE are also accelerating investment in OLED production lines. According to public information, BOE’s Chengdu OLED production line has been put into production. The Mianyang production line was also capped at the end of 2017, and subsequently announced in early 2018. The investment plan for the Chongqing production line.
The industry believes that under the heavy investment of domestic panel companies such as TCL and BOE, the monopolistic status of Korean companies on OLED panels will loosen.
IHS expects that by 2022, the proportion of Korean panel makers in global OLED production will fall from 93% in 2017 to 71%, and the market share of Chinese panel makers will increase from 5% in 2017 To 26% in 2022.
Huaxing Optoelectronics and BOE Who Make More Money
At present, China Star Optoelectronics is the main source of profit for TCL Group.
According to the 2017 annual report issued by the TCL Corporation, it achieved revenue of 111.58 billion yuan in 2017, net profit of 3.54 billion yuan, of which net profit attributable to the mother was 2.66 billion yuan, an increase of 66.3% year-on-year. Among which Huaxing Optoelectronics has improved its production capacity and maintained full-scale sales. The sales income was 30.48 billion yuan, an increase of 17.6% year-on-year, and the profit before tax, depreciation, amortization was 11.49 billion yuan, an increase of 111.1% year-on-year.
According to data provided by TCL, in 2017, the sales revenue and profit of China Star Opto-electronics reached a record high, and the number of LCD TV panel shipments was the fifth in the world. Among them, 32-inch TV panel products accounted for the second largest market share in the world. The market share of size products is the highest in the country.
It is reported that with the completion of the Huaxing Opto-electronics t6 project and the t7 project, the market share of China Star Optoelectronics in large-size products will rise to the top three in the world (the area of production capacity will reach 14%, second only to LGD and BOE).
According to IHS statistics, in the domestic TV panel market in 2017, China Star Optoelectronics and BOE shipped a similar area, which was 16.71 million square meters and 16.74 million square meters, respectively.
However, in terms of profitability, the net profit margin of Huaxing Optoelectronics continued to be higher than that of BOE in volume production of the first production line in 2012. From 2017 data alone, BOE achieved 93.8 billion revenues in the year with a net profit margin of 8%. , And China Star Optoelectronics revenue of about 30.48 billion, net profit rate of up to 16%.
It is worth noting that in the industry's low boom, in the first quarter of this year, China Star still achieved sales revenue of 6.46 billion yuan, and EBITDA of 2.76 billion yuan, an increase of 9.86% year-on-year. Its performance outperforms its peers.
In this regard, industry analysts believe that China Star Optoelectronics mainly supplies first-line brand customers, and its brand customers including TCL, Samsung, Hisense, Skyworth, Changhong, and Konka accounted for more than 80% of shipments. The excellent customer structure keeps Huaxing Optoelectronics relatively Low sales costs, while continuing to maintain full-scale sales.
'TCL Multimedia, as an important exporter of China Star Optoelectronics, accounts for 40% of Huaxing Optoelectronics' TV panel shipments. The advantages of TLC Multimedia and China Star Optoelectronics' vertical industry integration are becoming more and more significant. Industrial synergy advantages also make Huaxing Optoelectronics more resilient. The ability of industry cycles to fluctuate. 'The source said.