How Will China's Addition Of LCD And LED Display Panels To The Counterlist Affect Panel Makers Such As BOE?

- Jan 17, 2020-

Facing the US government ’s 25% tariff on China ’s 200 billion U.S. dollars, the Chinese government responded on May 13th, Beijing time. The Office of the Tariff Commission of the State Council formally decided to impose tariffs on 60 billion U.S. dollars of goods exported to China from China. The quota is 25% and it will be implemented from June 1st, Beijing time.

From the US $ 60 billion tax list listed by the Chinese government, non-Internet reporters saw an item called “display panel equipped with liquid crystal device (LCD) or light-emitting diode (LED)”. This measure will affect BOE and other domestic panels. What impact does the manufacturer bring?

From: List of 25% tariffs imposed on the United States (partial interception)

At present, there are 6 strong players in global panels, Samsung, LG in South Korea, AUO and Innolux in Taiwan, BOE and Huaxing Optoelectronics in mainland China.

BOE is the largest panel manufacturer in China and has already deployed four 6th generation OLED flexible screens. In June 2016, BOE established the first domestic 6th generation AM-OLED foldable flexible panel production line in the Chengdu Hi-tech Zone; in October 2016, in Mianyang builds a 6th-generation OLED factory, producing 45,000 substrates per month, which is about 90 million smartphone OLED screens. In October 2017, a 6th-generation flexible OLED display factory was built in Chengdu B7, with output similar to that of Mianyang; In May, BOE plans to build a 6th generation OLED factory in Chongqing.

In addition to OLED, in December 2017, the first domestic first-generation 10.5-generation liquid crystal (TFT-LED) established by BOE in Hefei was put into production, marking that China's display screen has entered the world stage. In April 2018, BOE's second 10.5 generation liquid crystal (TFT-LED) production line in Wuhan was officially opened, and it is expected to be completed by the end of 2019. Not only BOE, but also China Huaxing Optoelectronics and Huike have started to plan or build 10.5 generation production lines.

The opening of many domestic LCD and LED factories means that the output of LCDs and LEDs will continue to increase, prices will continue to fall, and end-user costs will further decline. This time, the Chinese government levied tariffs on LCD screens with LCD and LED. Although the United States does not have a strong panel manufacturer, industry insiders have analyzed that the Chinese government has levied taxes on entering tablet products. If Chinese terminal products enter the United States, Continued tax increases are even more detrimental to the United States, because it means higher costs for American consumers.