Global Display Market Competition Intensified Samsung Hao Bet $11 Billion Bet On New Track

As one of the overlord of display panels, Samsung is now turning its attention to the new track.

On October 10th, Samsung reported that Samsung's Samsung Electronics Company announced plans to invest 13 trillion and 100 billion won (about 11 billion US dollars) in facilities and research in the next five years for large-scale QD-OLED production lines. This will also be the largest single investment in the display panel investment case.

According to a Samsung statement, Samsung will convert the L8 LCD production line in Asan to the QD-OLED production line, which will start operation in 2021. The initial monthly output of 65 inches or more is 30 thousand, and will continue to expand. The statement also mentioned that the construction of the production line will provide 81000 jobs.

"QD-OLED panel production line first needs to break through the challenges of production technology, such as the improvement of yield and production capacity after mass production." In an interview with the twenty-first Century business reporter, Kevin Chen, senior analyst at IDC global hardware integration, said. Around the commercialization of the technology direction, Kevin Chen believes that it is worth continuing attention in the supply chain of related industries.

Betting on new track

With Samsung's big investment, QD-OLED once again entered the industry's eye.

It is understood that the so-called QD-OLED panel refers to the use of OLED and quantum dot technology hybrid panel. The principle of the technology is to transform the blue light into red and green with the help of OLED blue light source, and then form the color.

"The shipment of QD-OLED panels will focus on the high-end TV market." Around the characteristics of the QD-OLED panel, Kevin Chen told the twenty-first Century business news reporter, "when the product is first launched, it will emphasize ultra-thin, ultra-high color gamut and ultra high contrast. If the technology bottleneck is broken through, the panel manufacturers will emphasize more on its folding."

Samsung's big bet on QD-OLED is not without clue. At the end of last year, Samsung announced that it would launch a brand new OLED TV. At that time, SamSung monitor company CEO Li Dongxun revealed that Samsung is studying large size quantum dot OLED display panels and is progressing smoothly.

In July this year, it was also reported that Samsung will stop the existing LCD panel production line in August and upgrade it to the QD-OLED production line. Today, Samsung shows that the curtain of "upgrading" will take the lead in Asan.

It should be noted that although QD-OLED combines OLED and quantum dot technology, it can not be understood as a simple superposition of OLED and quantum dot technology. "Although the technology is used in quantum dot technology, QD-OLED is still quite different from the latter." A domestic display panel business insider introduced to the twenty-first Century economic report reporter, "this technical term is raised by Samsung, at present, there is only one of them in the industry."

This means that although domestic enterprises, including BOE, already have certain QDs related technology reserves, it is still not a day's effort to QD-OLED.

Once the QD-OLED panel is truly commercialized, Samsung Electronics will be able to use this self luminous panel for high-end flagship TV products and compete with OLED TV. "It can be predicted that the commercialized QD-OLED panels in the future will lock in 20% of the high-end product market." Kevin Chen analysis said.

Beach high end market

Samsung's massive investment in QD-OLED has both the determination to take the initiative and the frustration it has to make.

According to China Merchants Bank Research Institute, in the field of semiconductor display, LCD is still the mainstream market in the world, with a market scale of 120 billion -1300 billion dollars. However, at present, the traditional LCD display panel has entered the stage of stock competition. Although the demand area keeps a single digit growth, the market growth space is small under the downward trend of panel price.

"From 2019 to 2021, LCD is expected to be in excess of supply. The key to the balance of supply and demand lies in the control of supply side capacity release." The semiconductor research team of China Merchants Bank pointed out.

In fact, the mainstream semiconductor companies have begun to move. In addition to Samsung's upgrading of LCD production line to QD-OLED production line, LGD also decided to close the Poland LCD module manufacturing plant in April of this year, and consider interrupting the partial production of the current P7 and P8 production lines in Korea and turning to OLED production line.

In addition to the impact of the market environment, competition from mainland Chinese manufacturers has forced Samsung and LG to adjust their strategy. According to the data from the China Merchants Bank Research Institute, from the perspective of the area, the LCD capacity of mainland Chinese manufacturers in the high generation (above 6 generation lines) accounted for only about 1% of the total capacity of the world in 2011, and by 2017, the capacity of the Chinese mainland's panel makers surpassed South Korea, accounting for more than 40% of the total capacity of the world.

"In the stock market competition situation, Chinese mainland enterprises take advantage of high generation capacity to seize large market share of panel, and cut the small size panels through the high generation production line to occupy the low generation market share of Korea, Taiwan and Japan." According to the analysis of semiconductor research team of China Merchants Bank Research Institute, it is estimated that from 2017 to 2024, the global share of G6 capacity in mainland China will increase from 46.4% to 68%, and Mainland China is expected to become the leader of LCD industry.

In recent years, in the hot OLED field, although Samsung and LGD dominate the main market, Chinese manufacturers are also eyeing, including BOE, Vignon, Tianma, and Hui and so on. The layout of enterprises is expected to be released after 2019.

According to data from China Merchants Bank Research Institute, as of September 6th, there were 21 OLED production lines (including built, built and planned middle line) in mainland China, of which 15 were G6 and above. South Korea has 17 OLED production lines, of which 13 are G6 and above.

The latest report of Display Supply Chain Consultants (DSCC), the world's display field information agency, predicts that the market share of Chinese enterprises will increase significantly from 2018 to 2022, while the share of South Korean enterprises will drop to 56% from 90%. By 2025, the share of Chinese enterprises will increase to 43%.

"China's display panel business is not only limited to LCD technology, but also continues to research and develop high-end display technology. In the long run, it has caused heavy competition pressure on other display panel enterprises." Kevin Chen commented.

This is why Samsung is eager to find a breakthrough in the new technology roadmap. However, Kevin Chen believes that even if QD-OLED is truly commercialized, it will also focus mainly on high-end products. "The low-end market will still be occupied by a liquid crystal display panel with a cost advantage."