Under China's tens of billions of dollars to build a factory to produce large-size liquid crystal display (LCD) TV screens, under the impact of the industry, BenQ materials decided to reduce their dependence on LCD revenue, and slowly turned to the electric vehicle parts market.
With the rise of new technologies such as OLEDs (organic light-emitting diodes), LCDs are under pressure. With the large-scale production of LCD panels, China’s oversupply has led to a sharp fall in LCD prices. Chen Jianzhi, chairman and chief executive of BenQ Materials, said in an interview with Bloomberg that "change is painful", but "I don't see much room for growth in this business."
At present, 9% of BenQ materials are from polarizers. Chen Jianzhi hopes that the initial decline can be reduced to 70%, and then gradually reduced. Polarizers are important parts of LCDs. Chen Jianzhi intends to slowly move into the electric vehicle market. He said that BenQ materials have contacted a Japanese auto parts manufacturer to discuss the supply of parts for rechargeable batteries.
The timing of BenQ’s adoption of this move is at a time when the decline in LCD prices has hit the industry. According to the research institute Witsview Technology, the price of the 55-inch ultra-high-definition LCD screen fell by 4.8% on the 5th, much higher than the average drop of 2% in the previous six months. This is because Chinese companies have built tens of billions of dollars to build large-size LCD TV panels.
South Korea's LG Display shares have fallen 32% this year, expected to hit the worst annual decline since 2011. Market analysts estimate that LG Display’s operating loss this year will reach 476 billion won (about NT$13.1 billion).
BenQ materials have also been affected. BenQ's share price, which rose 34% last year, fell 5.3%. From this point of view, the decision to fade out of the panel market is not so surprising. Chen Jianzhi said, "In the absence of technological advantages, the price decline will be very heavy." He refers to the panel and polarizer. "We must move to other areas."