Analysis of Ten Development Trends in China's Display Panel Industry
Currently, the global new display industry is maintaining stable growth, driven by the trend of large-sized screens. AMOLED's penetration rate in the small and medium-sized product market is rapidly increasing, and LCD displays still maintain a mainstream position in the large-sized product market. The overall strength of China's panel display industry continues to strengthen, and its global market share is steadily expanding. Leading enterprises are accelerating the adjustment of their industrial structure, accelerating their layout in ultra large size, AMOLED, and industrial chain construction. The industry as a whole has entered a healthy development track. To correctly grasp the development laws of the industry, understand industry trends, and provide reference for the sustainable and healthy development of the industry, let's talk about the top ten development trends of the panel display industry.
1. China's panel production capacity continues to maintain rapid growth
In 2017, there were a total of 4 11th generation panel lines under construction in mainland China, and multiple 8.5 generation lines entered the mass production stage. It is expected that the annual sales revenue will exceed 220 billion yuan, and the panel shipment area will exceed 60 million square meters, accounting for over 40% of the global market. The panel production capacity will continue to maintain high-speed growth. The mainland has become the region with the most high generation lines in the world, while providing a major market for new display devices and raw materials worldwide. Under the multiple effects of multiple production lines and a large downstream market, the mainland plays a crucial role in the development of the global new display panel industry, and the industry as a whole will continue to maintain high-speed growth. It is expected to grow rapidly at a rate of around 15% in 2017, higher than the global average of 5%.



2. OLED panels are experiencing explosive growth points
Since 2016, the LCD display market has become increasingly mature and homogeneous competition has become increasingly fierce. With the deepening application of OLED panels in smartphones, the OLED market has achieved rapid breakthroughs in sales and applications. Mobile display devices and new wearable smart device manufacturers have a high demand for OLED screens, exacerbating the shortage of OLED panels. In 2017, Apple will adopt OLED screens on its flagship smartphones, driving demand from other smartphone brands and further enhancing the demand for OLED screens in the mobile phone market; Meanwhile, the launch of Sony's PSVR has ignited the global VR device market, and OLED screens have become a bottleneck for multiple VR manufacturers to ship. LGD will continue to showcase larger differentiated products and increase production capacity to ensure the production of 2 million OLED TV panels by 2017. At the same time, more and more manufacturers are joining the OLED camp, and the OLED market is gradually forming a complete industrial chain. Philips from the Netherlands, Metz from Germany, Bang&Olufsen from Denmark, and foreign home appliance giants such as Panasonic and Sony from Japan have also developed and launched OLED TV products. In the domestic market, domestic color TV manufacturers such as Skyworth, Changhong, Konka, etc. have also launched multiple OLED TVs. With the advancement of technology, increased production capacity, and demand, the industrialization speed of OLED will further accelerate, which will have an impact on the display industry system dominated by LCD. Industry research institutions predict that by the end of 2020, the market size of AMOLED panels will reach 67 billion US dollars, with an annual compound growth rate of over 40%. The explosive growth of the industry will also bring significant development opportunities for industry chain companies.
3. TV panel size continues to grow
The trend of large-sized TV panels will become increasingly apparent. The high resolution configuration of large-sized TV panels has become a significant trend in 2017. Research shows that the average screen size of the television market has been increasing at a rate of 1 inch per year in the past decade, and the global average TV panel size is expected to increase by 1.8 inches year-on-year in 2016, reaching 42.4 inches. In terms of size segmentation, the retail sales of 65 inch televisions increased by 2.4% year-on-year, and the market share of 49, 55, and 65 inch and above televisions increased by 2.0%, 2.9%, and 3.4% year-on-year. It is expected that the television industry will continue to maintain a trend of large-sized growth in 2017. In 2017, the production line of next-generation LCD panels will gradually become popular among panel manufacturers in China. At present, the mainstream large-size panel production line in China is Generation 8.5. In 2016, there were 8 Generation 8.5 LCD panel production lines in Chinese Mainland (including foreign-funded enterprises). In order to seize the competitive high ground and proactively lay out large-scale production lines, panel giants have successively laid out production lines of more than 10 generations. BOE, Huaxing Optoelectronics, LGD, and Foxconn have announced line construction plans and entered actual construction, with a total investment of over 200 billion yuan.



4. The development of small and medium-sized display panels faces diversification
As the growth rate of the smartphone, tablet, and laptop markets slows down, product market refinement has become a trend, and supporting display panels are also beginning to show a diversified trend. In 2017, the shipment volume of smartphone panels is expected to exceed 2.1 billion pieces, with a growth rate of over 20%. Due to the positive impact of Apple's adoption of OLED panels, OLED panels are expected to maintain a rapid growth trend, increasing from 370 million in 2016 to 600 million in 2017. The proportion of OLED panels in mobile phones will increase by more than 6 percentage points. LTPS has experienced significant growth in recent years, but due to the crowding out effect of OLED panels, it is expected that the shipment volume will slightly increase from 620 million pieces in 2016 to 730 million pieces in 2017, and the proportion in mobile phone panels will remain unchanged. In 2016, the sales revenue of amorphous silicon mobile phone panels was surpassed for the first time by OLED panels, but the shipment volume still ranked first. In 2017, the proportion of amorphous silicon mobile phone panels decreased from 810 million in 2016 to 790 million, and the overall proportion will continue to decline. In terms of tablet panels, due to the continuous decline in tablet shipment volume, tablet panel shipments have remained stable, with 7-inch tablet panels accounting for 60% of the overall shipment volume. In order to further increase the market share of OLED panels in small and medium-sized sizes, Samsung began gradually increasing the proportion of its own brand OLED panels in 2017. Under Samsung's strategy of expanding OLED applications, companies such as Apple, Microsoft, and Lenovo are expected to accelerate the adoption of OLED panels on tablets and laptops.



5. The increasing attention to quantum dot technology
Quantum dot technology is a technology that enhances the display effect of traditional LCD panels, and the integration of quantum dot display technology with consumer electronics has become an important trend. Since 2014, domestic and foreign companies such as Samsung, Sharp, LG, Sony, Hisense, Changhong, and TCL have successively launched televisions equipped with quantum dot technology. At the 2017 International Consumer Electronics Exhibition, Samsung officially released a new lineup of QLED TVs, all of which are equipped with the latest "cadmium free metal quantum dot" technology. TCL has launched the latest flagship product of the XESS X series, Quantum Dot TV. The flat quantum dot TV X2 and curved quantum dot TV X3 are equipped with the latest "optical film ultra-thin+body structure ultra-thin" technology, achieving ultra-thin designs with a curved surface of 6.9mm and a flat surface of 7.9mm. Apple is also actively investing in the research and development of patents related to quantum dot applications. Apple is researching the integration possibility of introducing quantum dot technology into 3C products, using quantum dot technology as a key technology to enhance display effects. The research and development of quantum dot wide color gamut technology products is increasingly valued, accelerating the development of materials and industry chains. Samsung has invested $70 million to acquire QDVision, an American quantum dot materials company. At the same time, Samsung is also a major investor in Nanosys, a German company with over 300 quantum dot technology patents. With the accelerated injection of capital, quantum dot technology will make greater progress in technologies such as backlight source mixing, backlight brightness control, and driving IC control of quantum dot displays, thereby accelerating the depth and breadth of quantum dot technology's application in consumer electronics products.
Top Ten Development Trends in China's Display Panel Industry



6. 8K panel will enter the fast growth channel
In 2017, 8K panel technology will further mature, and product prices will become more affordable, gradually entering the high-end electronic consumption field. Industry research results show that in 2016, the sales volume of 8K products was less than a thousand units. It is expected that by 2018, the sales of 8K TVs will reach over 300000 units, and in 2019, they will exceed one million units, entering a channel of rapid growth thereafter. Although 8K products still require long-term industrial development and accumulation to truly become mainstream in the market, panel manufacturers and TV brand manufacturers have shown positive performance in related products. For example, NHK in Japan collaborated with BOE to produce and broadcast 8K content in the Japanese market since 2015, and conducted some trial recordings and broadcasts for the 2016 Rio Summer Olympics. Due to the large number of pixels and high pixel density of 8K panels, small-sized applications will bring significant process difficulties. Therefore, large-sized panels over 65 inches have become the main application area of 8K technology. The future development of 8K products urgently needs to solve the problems of manufacturing technology and precision processing. Due to the fact that the number of pixels in an 8K panel is four times that of a 4K panel, and the pixel density in a TV panel is twice that of a 4K panel of the same size, the corresponding number of driver chips needs to be increased exponentially, which requires more demanding manufacturing processes and precision processing capabilities. For example, the 8K panel requires both the source driver and door driver electrodes to be made of copper. Currently, LGD has a relatively mature technology in this area, while Samsung began comprehensive technological improvement in 2016. Chinese companies such as Huaxing Optoelectronics and BOE have also invested in the 8K copper electrode process and made good progress. With the rapid popularization of 8K panel technology in fields such as healthcare, education, entertainment, and gaming, it will inevitably bring new growth points for information consumption.


7. Small pitch LED accelerates to seize the large-sized market
Due to its advantages such as lightweight and easy installation, wide applicability, fast production speed, and long service life, small pitch LED display screens are very popular in the display large screen market, and have begun to quickly seize market share in digital light processing projection technology (DLP) and large screen LCD. From a technical perspective, compared to DLP, small pitch LEDs have advantages such as small seam size, high brightness and color saturation, and flexible application, while DLP has advantages such as delicate images and lower costs. Therefore, these two technologies will compete in the indoor large screen market. Compared to large screen LCDs, small pitch LEDs have a wider range of dimensions, while large screen LCDs have limited dimensions; From the perspective of display effect, large screen LCD is superior in terms of image clarity. Therefore, these two technologies have certain complementarity in application. From a market perspective, small pitch LED has great development prospects in large screen splicing, indoor large screen monitoring, and high-end civilian markets. Currently, it has been widely used in video conferences, exhibitions, advertising, command and dispatch, virtual reality, monitoring centers, and other scenarios. China's leading LED screen companies, such as Liyade and Zhouming Technology, have good technical reserves in this regard. At the same time, security companies such as Hikvision and Dahua Group have also begun to enter the market, expanding the application range of small pitch LEDs. With the continuous increase of joining enterprises, the production cost of small pitch LEDs will be further reduced, and the market size will continue to expand. The small pitch market size is expected to reach 30 billion yuan by 2020, and its share in the large screen display market will continue to increase.
8. Panel prices have shown a long-term downward trend
The price of LCD panel products is affected by three factors. Firstly, the increase in panel supply due to the opening of new production capacity has led to a price decline. On the one hand, market changes affect the inventory of end-users, thereby affecting the demand for panel procurement; On the other hand, advanced enterprises take the initiative to lower prices in order to maintain market share. The second is that the decline in demand in the terminal market has put pressure on panel prices. Thirdly, the upgrading of new technologies affects panel prices and production capacity. Panel manufacturers ensure profit margins by guiding large-sized demand and introducing new technologies to increase product added value, and the new process has a significant impact on production capacity. As multiple higher generation lines gradually enter mass production, the demand for panels will gradually show an oversupply situation in the coming years, and panel prices will further decrease. Panel companies in Japan, South Korea, and other regions will continue to lower panel prices by leveraging the cost advantages brought about by depreciation of production lines and a complete industrial chain, in order to ensure market share and enterprise cash flow. At the same time, they will launch new high-value display products to ensure high profit margins. Due to the recent production of advanced panel production lines in China, the depreciation pressure on production lines is high, and panel prices directly affect the operational status of enterprises.



9. Increased risk of intellectual property disputes in upstream industries
In recent years, the independent innovation capability of China's new display industry has been continuously improving, and the number of domestic patent applications has grown rapidly. According to statistics, the cumulative number of patents in the field of new displays in China has exceeded 10000. However, due to the later development of the new display industry in China compared to foreign countries, there is still a significant gap between China and the world's advanced level in terms of basic patent reserves. The patent of China's new display industry is still in its early stages, and compared to the rapidly growing industry scale, the construction of an intellectual property attack and defense system is urgent. Improving the conversion rate of patents in China's new display industry, flexibly applying the rules and techniques of the adversarial game in the intellectual property attack and defense war, valuing independent research and development, and accumulating core patent achievements will become new tasks in the construction of intellectual property in China's new display industry.
10. The competition for professional talent resources will become increasingly fierce
In recent years, it has been reported that mainland panel companies are continuously introducing talents with high salaries from foreign companies. The main reason is that the speed of industrial investment in Chinese Mainland can not keep up with the speed of talent training, which must be solved by means of "foreign aid". In 2017, multiple LCD advanced generation lines and OLED production lines entered the mass production stage, and the procurement amount of materials and equipment for related production lines in China reached 100 billion yuan. Mature and high-level talent resources are still valuable resources that major enterprises are competing to seize. The competition for talent resources will also become increasingly fierce, especially in the field of OLED. OLED is a rapidly developing emerging technology, and there is a problem of insufficient talent accumulation worldwide. It is still difficult for the LCD industry to fundamentally solve the problem of talent shortage through the introduction of talents. The talent training mechanism of South Korea, Samsung, and other companies is worth learning from. On the one hand, Samsung strengthens exchanges with personnel from advanced foreign enterprises, and on the other hand, it attaches great importance to cooperation with universities and research institutes on research topics, actively providing student internship positions. However, the current situation in mainland China is that talent training institutions such as universities and research institutes are seriously disconnected from the production direction of enterprises, and there is a lack of corresponding guidance and foresight in curriculum design, ability development, research direction, and other aspects. There is still a significant gap from theory to practice. At present, the recruitment channels for enterprise talents in China are mainly based on "poaching". In order to save time and cost, they tend to recruit experienced personnel, while neglecting the establishment of talent training mechanisms and team building, resulting in a continuous increase in labor costs. However, the fundamental problem of talent shortage has not been solved. So, how to accelerate talent cultivation in the future also requires serious consideration from major panel companies. [Consultation hotline: 400-6013-681]
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