LCD module makes money China shows that the industry will remain unchanged in the next three to five years

- Nov 22, 2018-

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Driven by the mobile phone industry, China not only has LCD panel companies with a market value of nearly 100 billion, but also many LCD module companies and touch screen module companies with market capitalization of over 10 billion, and even touches with a market value of over 50 billion. Display accessories cover glass processing enterprises.

With the news that Samsung will provide AMOLED displays for Apple's mobile phones in the next year, China's LCD display industry practitioners are creating unnecessary anxiety, resulting in insufficient confidence of LCD module manufacturers and backlight manufacturers in the market outlook. The investment community has also begun to withdraw from relevant capital and chase the relevant OLED targets.

At the same time, in the fourth quarter of last year, the mobile phone industry chain clear inventory market, the price of mobile phone LCD panels fell faster than the cost reduction speed, so that the production efficiency of mobile phone LCD panels is low. Since the first quarter of 2016, LCD panel manufacturers across the Taiwan Strait have lowered the proportion of mobile LCD panel shipments, and instead produced low-cost LCD TV panels with less losses or slower In\On-Cell prices. The embedded LCD touch display panel and the supply of the LCD panel of the mobile phone also have obvious gaps in some sizes.

Under the market adjustment of the LCD panel factory, some mobile phone LCD module factories either reduced the shipment of upstream panel resources or produced ultra-thin In\On-Cell embedded LCD touch after thinning. Display modules, production yield and efficiency are still climbing, and shipments have shrunk. Although the price decline of mobile phone LCD modules in the whole industry has slowed down, the market is slightly better than previous years, but the shipment of mobile phone LCD modules is significantly lower than in previous years. It is also an indisputable fact that the profit of mobile phone LCD module companies is seriously declining.

However, from the perspective of Samsung, the mobile phone panel business has become more attractive than the traditional low-cost TV panel business. Samsung recently said to the brokerages that the 2017 AMOLED mobile phone production capacity is still limited, unable to meet the needs of all models of Apple's mobile phones, and will continue to expand the production capacity of AMOLED to meet the needs of the mobile phone industry.

At the same time, Samsung will also choose to shut down the low-priced LCD panel line that originally supplied Internet TV, and seek to transfer or sell equipment to the Chinese or South Asian industry peers for the production line with better equipment operation status.

In addition, Samsung is only optimistic about AMOLED display technology in the mobile phone panel business. For the LCD mobile phone panel, after upgrading the a-Si process to the LTPS process in 2015, Samsung found that not only the related patents were restricted, but also the production technology lags behind the LTPSLCD mobile phone panel defined by Apple. In the case that the driver chip of Apple technology cannot be obtained, The LTPSLCD mobile phone panel is basically not competitive, so it also decided to no longer accept new orders in the case of completing the customer's original mobile phone IPSLCD panel order, and resolutely gave up the LTPSLCD mobile phone panel business.

Since Apple has changed the screen on the mobile phone, the entire LCD panel industry of the mobile phone has been led by Apple, and the resolution and quality of the image are improved at any cost. The figure defeats Apple in physical parameters and earns eyeballs. Unfortunately, the one-sided physical parameters of panel makers have not improved the LCD screen that is more comfortable than the Apple display. Instead, the higher the end of the parameter, the more serious the loss of the display.

However, in the lower panel industry driven by Apple, there has also been a positive side. In the process of pursuing high physical parameters, manufacturers of mobile LCD panel manufacturers have to adopt more advanced mass production technology and more optimized management mode to drive the entire panel industry. The level of automation is rapidly increasing, and the production efficiency is also rapidly increasing, so that the production of panels is slowly separated from the labor-intensive mode, and the professional technology model that wins the market by relying on investment scale and cost efficiency is entered.

Moreover, Apple has integrated more and more PC-side applications into smartphones, which has fundamentally changed the social life mode of modern people. Smartphones have also changed from electronic consumer products to necessities in the information society, and more and more Countries, regions and people continue to enter the information society era, and the user coverage of smartphones will continue to grow, driving the total consumption of smartphones to rise.

In the huge absolute market demand, the growth of mobile phone panel area is insignificant compared to TV panels, but the number of mobile phone panel shipments has reached an unprecedented level in the display industry, coupled with the rear panel of the mobile phone panel display. In the group processing industry, explosive growth has occurred in the past five years, which has benefited Chinese mainland manufacturers who have taken over the transfer of the mobile phone industry chain manufacturing industry.

Driven by the mobile phone industry, China not only has LCD panel companies with a market value of nearly 100 billion, but also many LCD module companies and touch screen module companies with market capitalization of over 10 billion, and even touches with a market value of over 50 billion. Display accessories cover glass processing enterprises. Benefiting from the development of the mobile phone industry, the development of the demon stocks in addition to earning eyeballs in the capital market, but also allows investors to obtain investment returns far beyond the industry level.

Although from the outbreak of the smartphone market, there are not many companies that actually make money from the touch display of related products, and even many companies have lost their original accumulation and closed down. However, it is undeniable that the total output value of the module manufacturers in the mobile phone touch display industry still reaches nearly 100 billion yuan, directly and indirectly together to support millions of employees in China, and the industry has earned a total of tens of billions of net each year. Profits are actually supporting the sustainable development and industrial innovation of China's electronics industry.

In the mobile phone panel factory, in order to develop LCD technology or develop OLED technology "fantasy fight" in the future, China's mobile phone display module manufacturers continue to maintain their strong combat effectiveness, and have not given up their ability to quickly gather skilled employees, absorb capital investment, Quickly organize the fine tradition of production.

In order to combat the impact of OLED technology, LCD backlight companies, in addition to improving the color gamut capability of LED light source manufacturers, add quantum dot devices to backlight devices to improve the image quality of LCD module products. The display device of OLED image quality level is also the direction of the mobile phone display module industry in recent years.

In addition to continuing to reduce the thickness of the top cover of the LCD display screen and reducing the optical interference of the top display of the LCD display screen on the display quality, the mobile phone display module manufacturer has developed a new phase structure, arrangement and drive mode together with the upstream supply chain. Efforts to reduce power consumption and improve picture refinement are continuing. Optimized display image rewriting algorithms along with downstream applications, improving image presentation and user perception experience have never stopped.

And before the full arrival of OLED panels from 2018 to 2020, mobile display module manufacturers' investment in upgrading equipment automation, introducing advanced processes and optimizing enterprise management is still increasing. The whole industry is deeply cultivating LCD modules to make money, and after the outbreak of OLED panels, the megatrend to fully prepare for the rear processing of OLED display modules is still the mainstream of China's touch display industry. China's display industry continues to expand in the next three to five years. The main melody will not change.