BOE CEO Expects Consolidation in the Display Industry
June 4, 2018
As reported at DisplayWeek, the crystal cycle appears to be alive and well and one of the results of reaching the period of excess capacity is lower ASPs and in the most sever situations, consolidation, which is expected to take place in the global FPD industry as the number of major players is likely to be reduced to less than five, according to BOE chairman Wang Dongsheng. Wang made the remarks at the company's annual shareholders meeting held in Beijing recently, claimed that BOE is currently the world's top panel supplier for smartphone, tablet, notebook and monitor applications thanks to its continued capacity ramps in recent years.
BOE leaped one step further to outrace LG Display and Samsung Display to become the largest TV panel vendor globally in the first quarter of 2018, with its TV panel shipments reaching 12.5 million units. BOE also ushered in the 10.5G era for the global FPD industry by kicking off commercial production of the world's first 10.5G line in March 2018. More 10.5G lines will come online every year from 2018-2020, Wang indicated. Wang continued that he believes after the current round of consolidation that fabs smaller than 7.5G lines will be phased out by the market. While acknowledging that flat panel plants, particularly those that are still using a-Si technology, will face the threat of being shut down, some sources from Taiwan's FPD industry believe that the below 7.5G lines may not be completely retired within the next five years.
For example, Taiwan-based HannStar Display has only one 5.3G line. Although the company posted revenues of only NT$23.7 billion (US$793.95 million) in 2017 compared to BOE's CNY93.8 billion (US$14.62 billion), its gross margin for the year reached 36.4%, which was higher than those for most of its rivals. China-based Infovision Optoelectronics was profitable in 2017, utilizing its single 5G fab to roll out small- and medium-size panels exclusively for notebook applications. Chunghwa Picture Tubes (CPT) still managed to kick off volume production of a new 6G fab in China in 2017 although the company has been operating in red for nine consecutive years. In line with the advent of a new technology era to be built on the 5G, AI and IoT industries, small-scale panel makers are advised to develop niche-market products leveraging their own expertise, technology and capacities, as display products will remain the primary human-machine interfaces in the new era, commented the sources.