According to recent news, BOE has already reached a cooperation with Fuzhou to build a 6-generation AMOLED panel production line. This will be its fourth AMOLED panel production line. Its rapid expansion of production capacity will cause AMOLED panels to fall into price wars.
BOE accelerates expansion, or the AMOLED panel is in a price war
Global small and medium size AMOLED panels may have overcapacity
Samsung is the world's largest small and medium-sized AMOLED panel manufacturer, which accounts for more than 90% of the market. In 2017, after it received Apple's orders, it began to increase the capacity of AMOLED panels. However, Apple's iPhoneX sales did not work as expected last year. The AMOLED panel has overcapacity, and then chooses to open its supply to Chinese mobile phone companies (only Huawei has a major threat to it, it is difficult to obtain AMOLED panel supply), while significantly reducing the price.
As the biggest customer of Samsung AMOLED panel, Apple introduced three new iPhones this year. Among them, iPhoneXS and iPhoneXS MAX adopt Samsung's AMOLED panel, but the sales after the listing did not meet expectations. This is because the cost of AMOLED panel is too high, which caused Apple to have to The two iPhones are highly priced, with the highest-priced iPhoneXS MAX up to 12,799 yuan, known as the most expensive iPhone in history.
In order to reduce the cost of the iPhone, Apple also launched the iPhoneXR with TFT-LCD panel, hoping to gain more consumer recognition with this "cheap" iPhone. Although iPhoneXR's pricing is 2,200 yuan cheaper than the cheapest iPhoneXS, the iPhoneXR's appearance is too cheap, technical innovation is insufficient, and it is not recognized by the market.
Samsung's own mobile phone business is not as good as it was. It will drop 10% and 13.4% in the second and third quarters of this year. In addition, the sales of Apple's iPhoneXS and iPhoneXS MAX are not good, and the Chinese mobile phone company's comprehensive screen mobile phone takes into account the cost. The problem is also more use of TFT-LCD panels, resulting in a surplus of Samsung's AMOLED panel, which also led to Samsung's recent suspension of capacity expansion of AMOLED panels.
BOE's expansion of AMOLED panels may fall into price wars
BOE had the first AMOLED panel production line to be put into production last year. However, due to technical and capacity issues, Huawei did not adopt its AMOLED panel. It was not until the mate20 Pro released in October this year, and it is said that the mate20 Pro only has three points. One uses BOE's AMOLED panel, and the rest uses LG's panel, which shows that BOE's AMOLED panel may have problems in capacity and technology.
However, this did not delay BOE's determination to expand AMOLED panel production capacity. Last year, it opened a second AMOLED panel production line in Mianyang. In March this year, it signed a contract with Chongqing to build a third AMOLED panel production line. The agreement of the Fuzhou line, which means that it will have four AMOLED panel production lines in the future, such rapid capacity expansion may aggravate the current overcapacity of AMOLED panels.
Previously, in the TFT-LCD panel, BOE's 10.5-generation line was put into production at the end of last year, which aggravated the problem of overcapacity of TFT-LCD panels in the world, and the price of TFT-LCD panels dropped rapidly. In order to promote the sales of its own TFT-LCD panels, BOE even announced that it offered to offer up to 20% discount to TV and other terminal companies at the beginning of this year, which further aggravated the decline in global TFT-LCD panel prices. As can be seen from the TFT-LCD panel, BOE is willing to give more price concessions in order to increase its market share.
Compared with TFT-LCD panels, the current AMOLED panel is more profitable. The AMOLED panel business is Samsung's second largest source of profit. It is the AMOLED panel business and memory chip business that has driven Samsung's quarterly net profit since the fourth quarter of 2016. A new high, which means that AMOLED panels have more room for price cuts.
As a latecomer to the AMOLED panel market, BOE has a gap with Samsung in terms of technology and quality. If it wants to quickly break the advantage of Samsung in the AMOLED panel market, it can only use price as a weapon to attract more mobile phone companies. Adopt its AMOLED panel.
In summary, Bai Ying Technology believes that with the rapid increase in the production capacity of BOE's AMOLED panels in the future, Samsung will be in the era of making huge profits in AMOLED panels. BOE is expected to quickly gain more market share by virtue of its price advantage, just as it is in TFT- Like the LCD panel market, it has become the world's largest TFT-LCD panel company.