In 2017, color TV manufacturers are mixed. On the one hand, traditional LCD TVs show a declining trend in the high-end market, whereas OLED TVs have a sharper performance. At the same time, people’s total demand for color TVs is also declining, which also makes the market more competitive; however, the average price of color TVs has increased, so that the overall sales of color TV market has also increased, which also brought new TV manufacturers hope.
Under the background of changes in the market structure, the high-end color TV market represented by OLED is increasingly being taken seriously by major manufacturers and it has become a hotly contested place for military strategists.
OLED grabs half of the high-end market
"The television industry is currently saturated, but OLED TVs have brought new value to the market and will become a breakthrough in the display industry."
The speech of Liu Weizhi, CEO of Skyworth Group, on a public occasion is the epitome of the current TV market. In the situation where overall demand has reached "saturation", TV manufacturers can only seek new value and develop high-end markets if they do not want to fall into the trap of price war, thus achieving new breakthroughs.
When it comes to high-end markets, the performance of OLED has to be mentioned. According to IHS data, in 2017, in the high-end TV market of more than $2,500, OLED TVs accounted for 51.3% of the world's total, occupying half of the country's total, surpassing LCD TVs for the first time. This figure was only 15.5% in 2015 and 35% in 2016. IHS expects that in the high-end market, OLED TVs will continue to maintain rapid growth. In 2018, OLED TVs will climb to 70.7% of the 2,500 US dollars high-end TV market, becoming the absolute mainstream.
The growth of the high-end market, on the one hand, satisfies people's ever-increasing quality of life requirements. On the other hand, it also brings new profit growth points for TV manufacturers. For example, Skyworth's 2016/17 financial year report clearly stated that high-margin, large-size products can greatly reduce the impact of industry average selling price fluctuations on corporate profits, while OLED TV sales are a result of Skyworth’s sales of high-end product lines. The chief contributor to growth.
In a report on the “2018 Korea Display Forum” held in Seoul on March 21 this year, IHS mentioned that OLED TVs’ contribution to TV makers’ revenue is increasing, “it has gradually become the main revenue driver”. He pointed out that Sony's overall TV revenue in 2017 increased by 21% compared to 2016, of which OLED TV contribution rate reached 8%; LG Electronics' overall TV revenue in 2017 increased by 9% compared to 2016, of which OLED TV contribution rate was as high as 52%.
The high-end market led by OLED has become the key to the profitability of manufacturers. Therefore, even companies that have been hesitant before, have begun to invest in the OLED market. Since the end of 2017, OLED has expanded to include Philips, including Japanese manufacturers such as Sony and Panasonic, Korean manufacturers such as LG Electronics, and major Chinese manufacturers such as Skyworth, Changhong, and Konka, totaling 13 companies, covering almost all major TV companies worldwide.
OLED panel or supply in short supply China will become the main battlefield
"In March of this year, 30% of OLED TV panels already have insufficient supply and demand." South Korea KB Securities analysts said that increased demand may cause OLED panel prices to rise. The data provided by IHS analysts also confirmed this trend. He said that the scale of OLED TV panel market will increase substantially, and the demand volume in 2018 will soar to 2.9 million units from 1.7 million in 2017, and it is expected to reach 9 million by 2021.
The rapid growth of the market is undoubtedly a good news for LG Display, the only manufacturer with large-scale production of OLED TV panels. KB Securities expects that LG Display’s revenue contribution from OLED TV panels will reach 10% in 2019, and this figure will climb to 27% in 2020.
LG Display 88" 8K OLED
In the fast-growing OLED demand, the Chinese market has played an important role in promoting. IHS data shows that from the second quarter of 2018, the number of OLED TVs in China will enter a period of rapid growth. Among them, the second quarter of 2018 is expected to increase 118.8% year-on-year, and the third quarter of 2018 is expected to increase 120.4% year-on-year. It is worth mentioning that the forecasting figures of IHS also show that in 2019, China's OLED TVs will continue to maintain rapid growth, an increase of 115.5% compared with 2018. By then, China will also become the only region in the world where the growth rate of OLED TVs exceeds 100%. The second Japanese growth rate is expected to be 64.7%.
The rapid growth of OLED TV in China has benefited from the development of China's economy and the rising tide of consumption in China. As we all know, the concept of "a need for a better life" put forward at the 19th National Congress has profoundly affected China's consumer trends. As the purchasing power of Chinese consumers continues to rise, higher demands are placed on material and cultural life. In the field of audio and video, the requirements for audiovisual effects are getting higher and higher. Not only are the requirements for the size and display effect of television screens constantly increasing, but the appearance of televisions has also been continuously improved. Designs such as metal frames and “borderless” have been widely sought after. . This is also one of the reasons why high-end OLED TVs have a high level of design space because they do not need backlight modules.
With the rapid growth of China's OLED TVs and the overall demand shortage, meeting the needs of the Chinese market has become an important issue for the development of OLED TVs in the future. Therefore, LG Display, the main manufacturer of OLED TV panels, has also continued to invest in China. At the end of last year, LG Display confirmed that it will build a world-leading 8.5-generation OLED TV panel production line in Guangzhou, with a monthly production capacity of 60,000 units (based on glass substrates). Production is expected to be produced in the second half of 2019. This is the first overseas OLED panel production line after the Korean mainland. After the LG Display Guangzhou 8.5 generation OLED plant is completed, China will become the world's second OLED TV panel production base, which will also drive the OLED peripheral upstream and downstream industrial chains to take root in China, making China one of the core power sources for the future development of the OLED industry.
"LG Display will continue to work with local government and supplier partners in Guangzhou to bring together LG Display's outstanding technology and production experience to provide Chinese users with higher quality display products," said Yin Yusheng, president and vice president of LG Display China. LG Display will continue to advance the display market in China and globally through leading differentiated technologies.