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HKC’s Gen 8.6 LCD Fab Ahead of Schedule
April 22, 2019 HKCopened their 2nd Gen 8.6 LCD fab in Chuzhou, China, based on a-Si substrates, producing the same size panels as HKC’s other Gen 8.6 fab in Chongqing, but will be over 2x larger when fully built out. The Chuzhou fab will have a total capacity of 150,000 sheets/month (two phases) and the Chongqing fab to have a total capacity of 70,000 sheets, which is an increase of 40,000 sheets/month (at completion) from our original estimates. The pull-in and increased capacity increase HKC’s Gen 8.6 capacity by ~100% by the end of 2020, and while HKC lags behind major panel producers as to Gen 8+ LCD capacity, they have grown such capacity more quickly than expected (240% last year/126% this year) and have generated corresponding panel revenue. They generate ~$254 in revenue for every Gen 8 square meter of capacity, which could generate a theoretical run rate of $154m in panel sales by the end of 2022. However, the Gen 8.6 fabs are at a significant disadvantage in terms of glass utilization efficiency for 65” panels, when compared to the output of CSoT and BOE’s Gen 10.5 fabs which will have more capacity and lower costs. HKC had planned to build a Gen 10.5 but cancelled the project due to lack of support from the Chinese government, given the excess capacity existing in China. From: SCMR, LLC |
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Barry Young
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