Prospects of the Flat Panel Display Industry in Mainland China (Liu Ruilin)
Release date:
2018-01-10
The flat panel display industry, represented by TFT-LCD, is characterized by mature technology, with product sizes ranging from 0.2" to 108" (108" was exhibited by Sharp at CES in the US in 2007). Product performance includes a viewing angle of 180° (IPS), resolution of 367PPI (exhibited by TMD at SID2011), and response time of <3ms (Sony). Overall, the flat panel display industry, represented by TFT-LCD, has almost covered all size requirements, and products
TFT-LCD Characteristics of the flat panel display industry represented by TFT-LCD
Mature technology
p Product size
0.2"-108" (108" exhibited by Sharp at CES in 2007) At the American CES Exhibition
p Product performance
Viewing angle: 180 ° (IPS )
Resolution: 367PPI (Exhibited by TMD at SID2011 在SID2011 Exhibition)
Response time: <3ms (Sony )
p Overall, the flat panel display industry represented by TFT-LCD has almost covered all size requirements, product performance has basically met human needs, and the technology is quite mature. Currently, IPS 、3D and LED backlights are improvements on TFT-LCD technology, not revolutionary innovations. 技术上进行的改善，并非革命性创新。
Profit reduction
p Overall, the flat panel display industry represented by TFT-LCD The net profit margin of the flat panel display industry is declining.
Intense market competition
p In the second half of the year, BOE and Huaxing Optoelectronics in China put into production two 8.5 generation lines, and it is expected that one 7.5 generation line and two 8.5 generation lines will still be built; Samsung, LG 、AU Optronics and Chimei are also seizing opportunities to expand their local 8 generation line capacity, and the overall overcapacity pressure is still very high. It is expected that the industry will have a supply exceeding demand in the next few years, market competition will be fierce, and prices will be easy to fall but difficult to rise. 代线产能，整体产能过剩压力仍然很大。预计未来几年行业供大于求，市场竞争激烈，价格易跌难涨。
Market demand is approaching saturation
p 2010 In the year, the revenue scale of the flat panel display industry reached 1,152.54 US dollars, an increase of 25% . Display Search predicts that in 2011 the industry's revenue growth rate will be only 4% . In the next few years, the market capacity will be about 1,400 US dollars, and the growth space is not large.
Uncertainty in potential demand decreases
p 20 Since the 1990s, the rapid growth of the terminal demand for the flat panel display industry represented by TFT-LCD is largely due to the replacement of other display technologies and the development of new application fields. For example, liquid crystal displays, from initially being used in laptops, to being used in mobile phones, to large-scale use in LCD monitors, and then to large-scale use in televisions, the industry demand has shown a phased explosive growth trend.
p At present, the terminal application fields of the flat panel display industry have almost included all sizes and covered all performance requirements of consumer categories and professional display fields such as industry, medical, automotive, and aviation.
p In recent years, Internet TV, LED backlit TVs, 3D TVs, 3G smartphones, tablet computers and other new technologies and products have been launched, all at the expense of replacing existing products, and have little impact on the overall demand of the industry. Overall, the possibility of a significant increase in demand for the flat panel display industry represented by TFT-LCD is reduced, and explosive growth is difficult, and the uncertainty of potential demand is reduced.
p TFT-LCD The flat panel display industry represented by TFT-LCD has entered a mature stage!
The competitive position of China's mainland flat panel display industry in the world
Technological foundation
p From the perspective of new technologies such as high resolution, wide viewing angle, low power consumption, and narrow bezel, the representative products are not provided by mainland Chinese companies. It can be seen that the mainland Chinese flat panel display industry is still in the catching-up stage in terms of technology.
Patent protection
p At present, international companies in the flat panel display industry have formed a complex cross-licensing relationship in terms of patents, but there are no mainland Chinese companies among them.
p In addition, judging from the patent lawsuits between Samsung and Sharp, Chimei and Sony, Sharp and AU Optronics, AU Optronics and Samsung in recent years, the patents of the flat panel display industry have been strictly protected.
p The development of the mainland Chinese flat panel display industry is currently greatly restricted in terms of patents.
Talent team
p Mainland China started developing the flat panel display industry represented by TFT-LCD in 2004 年开始发展以TFT-LCD Compared with Japan, South Korea, and Taiwan, the start is relatively late, and there is a lack of talent, especially high-tech talent. Although mainland China has introduced many high-tech talents and senior management talents in the industry in recent years, overall, the imperfection of the talent team will still affect the further development of the mainland Chinese flat panel display industry for some time.
Management ability
p Judging from the total asset turnover rate and inventory turnover rate, mainland Chinese enterprises are lower than large enterprises in Taiwan, China. It can be seen that mainland Chinese flat panel display enterprises still need to further strengthen their management capabilities.
Industry chain supporting
p LCD The industrial chain is long, involving numerous fields, and the entire industrial chain has formed a huge industrial cluster. Industrial supporting facilities are very important, and the level of localization rate has become an important factor affecting the production costs of mid- and downstream enterprises.
p Left figure Display Search , Natrust statistical data analysis shows that, 2009 the localization rate of Japan's industry reached 176% in , South Korea was 82 % , Taiwan region was 85 % , while the localization rate in mainland China was only 11 % ; The table on the right showing the mastery of key material technologies indicates that China's mainland flat panel display industry is still in the catch-up stage regarding key material technologies. The severe lack of industrial support and the need to import most components are important reasons for the high production costs and low profitability of related enterprises in the mainland Chinese industrial chain.
Capital Cost
p From bank 1 -year loan interest rates, mainland China has the highest loan interest rates, followed by South Korea, Taiwan, and Japan having the lowest. In terms of capital cost, this is particularly unfavorable for the development of mainland China's flat panel display industry.
Taxes, Fees, and Logistics Costs
p From the perspective of tax policy comparison, mainland China's tax policies have no advantage compared to those of South Korea, Japan, and Taiwan.
p In terms of utility costs, industrial electricity fees in mainland China are approximately 0.54 yuan/ kWh, and water fees are approximately 3.0 yuan/ cubic meters, which are relatively high.
p Due to repeated oil price increases, underdeveloped logistics systems, and strict fines for speeding and overloading, transportation costs in mainland China are generally high, with a basic rate reaching 0.09 per ton-kilometer. yuan/ton.
p In summary, mainland China's flat panel display industry has no competitive advantage over South Korea, Japan, and Taiwan in terms of taxes, fees, and logistics costs.
Labor Cost
p Entering the 20th century, international TFT-LCD manufacturers have successively invested in and set up factories in mainland China, gradually shifting product backend production to China, which has completely nullified the previous labor cost advantage of flat panel display enterprises in mainland China.
From the perspectives of technological foundation, patent protection, talent pool, management capability, industrial chain supporting capacity, as well as capital costs, taxes, logistics costs, and labor costs, mainland China's flat panel display industry is at a disadvantage, occupying an unfavorable position in the global competitive landscape.
Competitive Advantages and Prospects of Mainland China's Flat Panel Display Industry
Competitive Advantages
I. Abundant capital, limited investment options.
p Huge foreign exchange reserves: What you want to buy, others don't allow you to buy; what you bought often results in more losses than gains.
p Excessive domestic capital liquidity: We don't know if the highly profitable real estate market has a bubble, but it is strictly controlled by the government.
p Industrial Investment: IC ? FPD ？ No one is doing much better than anyone else. Solar energy?
II. Economic transformation is a basic national policy:
p Rapid growth in government fiscal revenue and strong financial resources: The Ministry of Finance's released national public fiscal revenue final accounts show that in 2009 and 2010, the year-on-year growth rates of national fiscal revenue were 11.7 % and 21.3 % , and the 2011 budget increased by 8 % compared to 2010. 。
p The flat panel display industry is one of the pillar industries of the information industry and receives strong national support: The "Twelfth Five-Year Plan for National Economic and Social Development" clearly states: accelerate the formation of leading and pillar industries, effectively enhance industrial core competitiveness and economic efficiency. Give full play to the leading and supporting role of major national science and technology projects, implement industrial innovation and development projects, strengthen fiscal and financial policy support, and promote the growth and strengthening of high-tech industries.
p The Chinese government can prioritize long-term development, lowering expectations for short-term returns, and has a stronger tolerance than Wall Street or other capital markets.
III. Human Resource Advantage
Although China's labor advantage no longer exists, its human resource advantage is enormous. However, this advantage does not manifest itself naturally.
p The Ministry of Education announced that in 2010, the number of national college graduates was 6.3 million people, with graduates in just one year accounting for 0.46 % of the national total population. 。
p There is still a significant gap between the salaries of technical and managerial personnel in China and those in developed countries and regions.
p Chinese technical and managerial personnel require excellent conditions and a conducive governance environment to fully realize their potential.
IV. Advantages of a huge market and being the world's factory
p China is a huge market: in the WOT era, the Chinese market is not just for local Chinese enterprises, but Chinese enterprises should better understand the needs of Chinese consumers. Chinese manufacturers, being close to Chinese consumers, should have the advantage of faster response to this market.
p China is the world's factory: Although the localization of raw materials and basic components is insufficient, the industrial chain for backend assembly and finished products is highly complete and developed. Chinese panel manufacturing enterprises have the advantage of being easily integrated.
Countermeasures and Prospects
p Fully utilize government resources and optimize fundraising and financing models.
p Make full use of preferential policies and actively lobby the government to formulate policies conducive to industrial development.
p Prepare for a "protracted battle":
Actively develop while fully considering risk prevention;
Actively embrace future technologies and leverage the strengths of China's technical personnel;
Focus on market differentiation and personalized needs;
Utilize the service advantages of China's marketing and support personnel;
Embrace change and fully unleash the potential of company employees.
Simply building factories won't solve any problems; it may even create more!
p Ultimately, some mainland Chinese companies will surely succeed.
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