The situation of overcapacity will continue to become a nightmare for BOE

2017 is undoubtedly a year of good harvest for BOE, but the happy hour passed too fast, and it ushered in a decline in net profit in the first quarter of this year. This is exactly the evil result of overcapacity, and currently due to the technology of the panel industry Upgrade, this situation of overcapacity will continue to become their nightmare.

The situation of overcapacity will continue to become a nightmare for BOE

Increase in LCD panel prices makes BOE and others profitable

Since 2016, global TV, mobile phone and other products have begun to develop into large-scale development and Samsung has converted the LCD panel production line to OLED panels. The supply of LCD panels has been tight, and the global LCD panel prices have continued to rise.

The performance of domestic LCD panel manufacturers such as BOE and Huaxing Optoelectronics has thus achieved good results. In the first quarter of 2017, BOE turned losses into profits, from a loss of 867.3 million in the first quarter of 2016 to 355.7 million in the first quarter of 2017. In 2017, its net profit tripled year-on-year to a historical peak of 7.568 billion yuan. Huaxing Optoelectronics, another domestic large-scale panel manufacturer, is also profitable. Due to the contribution of Huaxing Optoelectronics, TCL Group's net profit in 2017 increased by approximately 70% year-on-year.

OLED or replace LCD panel

The current TV is still based on the liquid crystal panel, but the technical aspects have begun to change. More advanced TV panel technologies such as OLED and QLED may replace the current liquid crystal panel technology. In the high-end TV market above $ 2,500, OLED TVs surpassed LCD TVs for the first time in 2017, accounting for more than 50%, which means that OLED TVs have become mainstream in the high-end market. Compared with LCD TVs, OLED TVs are lighter and thinner, with better display colors and lower power consumption.

In the global OLED TV panel market, LGD is the leader, and it occupies more than 90% of the market share. LGD is currently investing more than 30 billion in Guangzhou to build an 8.5-generation OLED panel production line. It is expected to be put into production next year, which will accelerate the OLED panel in the TV market. popular.

Samsung, the world ’s largest manufacturer of small and medium-sized OLED panels, occupies more than 90% of the market. Last year, it expanded its production of OLED panels in order to supply OLED panels to Apple. Finally, because of the poor sales of iPhoneX using OLED panels, it is facing a surplus situation. Other mobile phone companies are selling OLED panels, and it is expected that OLEDs will become more popular in the smartphone industry in the next few years; due to Samsung ’s surplus of small and medium-sized OLED panels, it seems that it intends to convert one of its OLED panel production lines to TV OLED panels, which will also help Promote the popularity of OLED in the TV market.

BOE's LCD panel capacity may be surplus

As early as a few years ago, Samsung, the world ’s largest panel manufacturer, began to realize the problem of overcapacity caused by the involvement of Chinese panel companies in LCD panel production, so it began to sell LCD panel production lines or converted to OLED panels. LGD replaced Samsung as the world ’s largest panel. manufacturer.

After making breakthroughs in LCD panel production technology in 2009, Chinese panel manufacturing companies began to rapidly expand their LCD panel production capacity. In 2009, BOE and Huaxing Optoelectronics began to build the 8.5 generation line. At present, these two panel manufacturing companies have put into production or are building the world ’s most The advanced 10.5 / 11 generation LCD panel production line and the rapidly expanding LCD panel production capacity have led to the current problem of global LCD panel overcapacity.

As OLED gradually begins to spread to the TV and smartphone markets and BOE and China Star Optoelectronics ’more advanced LCD panel production lines are gradually put into production, the problem of global LCD panel overcapacity will become a problem in the next few years. The surplus has caused the previous price increase trend to turn down from the second half of last year, which also caused BOE ’s net profit in the first quarter of this year to fall by 16% year-on-year.

For domestic panel manufacturers such as BOE and Huaxing Optoelectronics, it is now important to invest in more advanced panel technology research and development while ensuring revenue from the LCD panel business. BOE has put into production OLED panels last year, and Huaxing Optoelectronics is stepping up its construction OLED panel production line, but after they are put into production, they will also face problems such as yield improvement; and now panel manufacturers have begun to develop more advanced microLED panel technology. How can domestic panel manufacturers shorten their advanced panel technology with foreign panels The gap between production enterprises is a question worth considering.

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