BOE Chairman Wang Dongsheng: Law Of Survival In LCD Industry

BOE has entered the liquid crystal display industry for nearly ten years. We experienced a brutal industry cycle baptism and grew up step by step.

However, we are sober aware that BOE has a long way to go from the vision of "showing the world's leading enterprises".

Over the past few years, we have been exploring how to get rid of the influence of "roller coaster cycle" in the LCD industry through the cultivation and construction of our core competencies, and establish a "value creation driven" development mode to achieve long-term and stable profits.

After years of research and exploration, we found a rule of LCD industry: every three years, the price of LCD panels will drop by 50%. If we want to survive, the product performance and effective technology must be more than doubled.

We call it "

This law needs to explain several concepts as follows:

Product performance refers to the sum of product function and quality.

The performance of LCD products in the future will advance towards the more beautiful, lighter, more energy saving, more environmental friendly, more convenient and more humane direction.

Product performance improvement can be measured by product performance index.

The product performance index is a measurement tool for product cost innovation and value innovation. It can be used to calculate the marginal revenue of a product at a certain time point.

Effective technology retention refers to the technological capacity that supports product performance improvement, cost reduction and production line efficiency enhancement. In short, it refers to the technological capability that supports product competitiveness and profitability.

Production line efficiency refers to production rhythm, production flexibility, yield guarantee and operation stability.

Check curve

Since the industrialization of TFT-LCD LCD panel in Japan in 1991, the LCD industry has gone through nearly 20 years.

Especially in the past ten years, the development context clearly reflects this rule.

Enterprise innovation

We propose this law with only one aim: in the enterprise, we should unify our thinking, implement our strategy, accelerate innovation, and form a "value creation driven" development mechanism.

In the environment of rapid technological progress and fast changing market, only by continuously accelerating innovation can enterprises survive.

BOE has always attached importance to enterprise innovation. Our innovation system is divided into three aspects: mutual premise and interaction promotion.

Technology and product innovation: the goal of product innovation is to evolve from responding to the market to leading the market, and rapidly and continuously introducing new products with good performance, good quality and low cost.

Technological innovation should provide fast and effective technical support for product innovation and production line efficiency improvement.

Technology and product innovation are the core link of enterprise innovation.

Business process innovation: BOE has achieved remarkable results in promoting enterprise informatization in recent years.

With the expansion of the scale of enterprises and the increasingly rich product lines, business processes need to be optimized synchronously, so as to maximize the value creation efficiency of the I T system and achieve the ultimate and ultimate business links.

Management mechanism innovation: adhere to the people-oriented, continuously develop human potential, fully mobilize the enthusiasm, initiative and creativity, target oriented, achieve the unity of people and goals of independent active management mechanism.

It must also be pointed out that in the LCD industry, moderate scale is the key element.

It is possible to establish a competitive supply chain system with a certain scale. Only when it has a certain scale can it digest the huge technology development cost and have a certain scale to form a rich product line and enough technology guarantee.

The formation of moderate scale depends on technology, management, talents and capital. We must rely on the innovation of opportunity and quick layout and the development mode.

"The law of survival in LCD industry" is a summary of our practice and a crystallization of wisdom that our colleagues have explored together for 20 years.

Whether this "survival law" can universality and foreshadowed the future still needs us to continue to practice together.