Samsung Display will completely end LCD panel production in June. The saga between Samsung Display (SDC) and the LCD industry seems to be coming to an end.
In April 2020, Samsung Display officially announced its plan to completely exit the LCD panel market and stop all LCD production by the end of 2020. That’s because the global market for large-size LCD panels has declined over the past few years, leading to significant losses in Samsung’s LCD business.
Industry insiders say Samsung display’s complete withdrawal from LCD is a “strategic retreat”, which means that the Chinese mainland will dominate the LCD market, and also puts forward new requirements for Chinese panel manufacturers in the layout of next-generation display technology.
In May 2021, Choi Joo-sun, Samsung Display’s vice chairman at that time, said to employees in an email that the company was considering extending production of large-size LCD panels until the end of 2022. But it looks like that this plan will be completed ahead of schedule in June.
After withdrawing from the LCD market, Samsung Display will shift its focus to QD-OLED. In October 2019, Samsung Display announced an investment of 13.2 trillion won (about 70.4 billion RMB) to build a QD-OLED production line to accelerate the transformation of large-size panels. Currently, QD-OLED panels have been mass-produced, and Samsung Display will continue to increase investment in new technologies.
It’s know that Samsung Display shut down a 7th-generation production line for large-size LCD panels in 2016 and 2021 respectively. The first plant has been converted to the 6th generation OLED panel production line, while the second plant is undergoing similar conversion. In addition, Samsung Display sold its 8.5-generation LCD production line in East China to CSOT in the first half of 2021, leaving L8-1 and L8-2 as its only LCD panel factories. At present, Samsung Display has converted L8-1 into QD-OLED production line. Although the use of the L8-2 has yet to be decided, it is likely to be transformed into an 8th-generation OLED panel production line.
It is understood that at present, the capacity of the panel manufacturers in mainland China such as BOE, CSOT and HKC is still expanding, so the reduced capacity shown by Samsung can be filled by these enterprises. According to the latest documents released by Samsung Electronics on Monday, the top three panel suppliers for its consumer electronics business unit in 2021 will be BOE, CSOT and AU Optronics respectively, with BOE joining the list of major suppliers for the first time.
Nowadays, from TV, mobile phone, computer, to the car display and other terminals are inseparable from the screen, among which LCD is still the most extensive choice.
Korean enterprises shut down LCD actually have their own plans. On the one hand, the cyclical characteristics of LCD lead to unstable profits of manufacturers. In 2019, the continuous downward cycle caused LCD business losses of Samsung, LGD and other panel companies. On the other hand, the continuous investment of domestic manufacturers in the LCD high-generation production line has resulted in the small residual dividend of the first-mover advantage of Korean enterprises. Korean companies will not give up on display panels, but invest in technologies such as OLED, which have a clear advantage.
While, CSOT and BOE continue to invest in new plants to fill the gap caused by South Korea’s Samsung, LGD capacity reduction. Currently, LCD TV market is still growing overall, so the overall LCD production capacity is not too much.
When the LCD market pattern gradually tends to stabilize, the new war in the display panel industry has begun. OLED has entered the competition period, and new display technologies such as Mini LED have also entered the right track.
In 2020, LGD and Samsung display announced that they would stop LCD panel production and focus on OLED production. The move by two South Korean panel makers has intensified calls for OLED to replace LCDs.
OLED is considered to be the biggest rival of LCD because it does not need a backlight to display. But the onslaught of OLED has not made the expected impact on the panel industry. Take the large size panel as an example, the data shows that about 210 million televisions would be shipped globally in 2021. And the global OLED TV market would ship 6.5 million units in 2021. And it predicts OLED TVS will account for 12.7% of the total TV market by 2022.
Although OLED is superior to LCD in terms of display level, the essential attribute of flexible DISPLAY of OLED has not been fully developed so far. “Overall, OLED product form is still lack of significant changes, and the visual difference with LED is not obvious. On the other hand, the display quality of LCD TV is also improving, and the difference between LCD TV and OLED TV is narrowing rather than widening, which may easily cause consumers’ perception of difference between OLED and LCD is not obvious” Liu buchen said.
Since the OLED production becomes more difficult as the size increases and there are too few upstream companies making large OLED panels, LGD dominates the market at present. This has also led to a lack of competition in OLED large-size panels, which has led to high prices for TV sets accordingly. Omdia estimated that the difference between 55-inch 4K LCD panels and OLED TV panels would be 2.9 times in 2021.
The manufacturing technology of large-size OLED panel is also not mature. Currently, the manufacturing technology of large-size OLED is mainly divided into evaporation and printing. LGD uses the evaporation OLED manufacturing process, but evaporation panel manufacturing has a very big weakness and low yield. When the yield of evaporation manufacturing process can not be improved, domestic manufacturers are actively developing printing.
Li Dongsheng, chairman of TCL Technology, revealed in an interview that the ink-jet printing process technology, which is directly printed on the substrate, has advantages such as high material utilization rate, large area, low cost and flexibility, is an important development direction for the future display.
Compared with the home appliance makers who are cautious about OLED screens, mobile phone makers are more positive about OLED screens. OLED’s flexibility is also more evident in smartphones, such as the much-discussed foldable phones.
Among OLED’s many downstream handset manufacturers, Apple is a big customer that cannot be ignored. In 2017, Apple introduced an OLED screen for its flagship iPhone X model for the first time, and there has been reported that Apple will purchase more OLED panels.
According to reports, BOE set up a factory dedicated to manufacturing apple components in order to secure orders for the iPhone13. According to BOE’s 2021 performance report, its flexible OLED shipments in December exceeded 10 million for the first time.
BOE was able to enter the Apple chain with painstaking efforts, while Samsung Display is already apple’s OLED screen supplier. South Korea’s Samsung Display is making high-end OLED mobile phone screens, while domestic OLED mobile phone screens are inferior in terms of functions and technical stability.
However, more and more mobile phone brands are opting for domestic OLED panels. Huawei, Xiaomi, OPPO, Honor and others have all started to choose domestic OLED as their high-end products suppliers.
Post time: Apr-09-2022