The Growth Of The Panel Industry Will See A Reshuffle Next Year In The LCD Market.

The black swan landed and the domestic panel industry was challenged by the supply chain in the first quarter of this year. When the domestic situation eased in the two quarter, the spread of epidemics abroad brought uncertainty. But for the panel factory, compared with the delay of the raw material supply side, the greater impact comes from the drop in demand side. The main products such as TV and mobile phone are expected to decline in 2020.

Therefore, in the short term, the panel manufacturers are still under pressure, but the industry is generally optimistic about the long-term trend. Large scale panels have bottomed out in 2019, and are about to move out of the cyclical downturn. In 2021, there will be a resumption of growth in terminal products, as well as demand in emerging areas such as business and display.

At the same time, Korean manufacturers are strategically withdrawing from the LCD (liquid crystal) market, and domestic manufacturers will have more verbal power in the LCD field. This also indicates that the panel industry will start a new round of shuffling, and the epidemic will bring pressure to some manufacturers. Li Dongsheng, chairman of TCL Technology group, expects that there will be M & A opportunities next.

"Generally, there are more opportunities for mergers and acquisitions during the difficult period of entry into the industry. We expect that there will be more opportunities for mergers and acquisitions in the semiconductor display industry this year and next year. In addition, China's new capacity and the number of enterprises in this industry are relatively large, and some enterprises are not very large in scale, so we will actively seek valuable acquisitions targets for the future growth of the company. Li Dongsheng said.

Short term pressure to resume growth next year

From the information disclosed by two leading enterprises in the country, sales will continue to grow in the first quarter of 2020.

At the recent financial report meeting, Li Dongsheng told the media including the twenty-first Century economic report: "TCL China Star's sales growth in the first quarter will exceed 20%. In the second quarter, we are confident that we can continue to achieve growth. We can not control the market changes, but we are confident that we can achieve full production by enhancing our competitiveness, optimizing the structure of our products and increasing our capacity. "

In a recent interview, the chairman of BOE A expects that the industrial output value of BOE in the first quarter will probably exceed 30 billion yuan.

For the next trend of the panel industry, Zhao Jun, vice president of TCL group and senior vice president of TCL Huaxing optoelectronics, told reporters: "in 2020, the overall demand will decline to a certain extent by the impact of the epidemic, and there will be a certain degree of decline in the two quarter. But we expect a resumption of growth in 2021, and growth will continue in 2022 -2023. "

From a large point of view, in addition to the slow rise of panel prices, Zhao Jun said that the growth space of large-size panels was largely derived from the new application areas. According to the survey of market organizations, large screen display and office promoted the large growth of interactive whiteboard demand, and at the same time, due to the promotion of new retail and competition events, signboards and electric display devices were displayed. The growth is very large. In addition, there are structural growth, such as 8K products and high-end Mini -LED TV. At the same time, with the exit of Han factory, the market share of domestic manufacturers will further improve.

In the small and medium size panels, with the continuous introduction of 5G phones, it will also drive the demand for replacement. Domestic LTPS panels are growing rapidly and folding screens are also in mass production. In addition to mobile phones, vehicle screens and notebook computers have become the layout direction of panel makers.

For the challenges of the future industry chain of the panel industry, Li Dongsheng said: "the impact on the global industrial chain layout, I think more is not due to the impact of the epidemic, but because of a longer cycle of industrial market supply and demand relationship. At present, China's industry has become the most competitive country in the big screen display, so I believe in the development of China in the next few years. The industry will dominate the large scale semiconductor display industry, including TV, including CID and large commercial display. LTPS will also become one of the leading industries in China, because shipments will be in China for the first two years, and this advantage will continue in the next few years. However, in terms of OLED, Korean enterprises have already established stronger competitive barriers, and Samsung's advantages are more obvious, so Chinese enterprises are facing greater pressure.

Samsung plans to quit LCD market shuffle merger and acquisition

Next, an important factor affecting the supply and demand market is that the Korean panel giant SDC (SamSung monitor) should strategically withdraw from the LCD market. In fact, Korean manufacturers, including SDC and LGD (LG display), have been gradually reducing LCD capacity in recent years, and turning to QLED and OLED. Recently, it has been reported that SDC will stop production of LCD by 2020.

Cui Jilong, general manager of Beijing Di Xian, told reporters on twenty-first Century economic report that the exit of SDC is foreseeable, mainly for three reasons. "One is the loss is too great. In 2019, it was a huge loss year for the TV panel industry. The price of the panel fell below the cost line, and the loss rate of the TV panel business reached 35%-40%. In the throes of industry, the product structure determines the profitability of the whole business. The structure of SDC's LCD business is unbalanced. The share of TV panels in LCD business is as high as 73%, while AUO/INX/LGD is around 40%, which determines that the proportion of SDC's loss is at a higher level among several competitors, making it easier for them to withdraw from the business.

Second, SDC can choose another way to develop QLED. SDC's technology reserves and strong financial strength make it unnecessary for them to carry on a continuous loss business.

Third, SDC began its strategic retreat in 2019, reducing the 120K capacity from the second half of 2019 to the planned reduction of 90K this year, and stepped back from the war. The panel market that warmed up earlier this year also gave this strategy a glimmer of hope. Since the new crown pneumonia ravaged the world, seriously affected the demand for global television at the same time to curb the rise in the price of the panel, the second quarter of the panel price fell again, completely dispelled the hope of profitability recovery, so that SDC decided to completely withdraw from the battlefield.

With the rising market share of Chinese enterprises in the field of LCD, Korean manufacturers are abandoning the burden of losses and accelerating structural transformation to high-end products to gain more profits. For Samsung, the AMOLED of small and medium sized screens also has a steady moat. In the future folding screen, Samsung has spared no effort to build up momentum, and advance the card position to stabilize the core position of the industrial chain.

However, the withdrawal of SDC will still have an impact on supply and demand in the LCD market. It will also usher in a new round of shuffling when each company takes advantage of its share. According to DISCIEN of the Research Institute, SDC's withdrawal from the LCD industry will significantly affect the supply of 55 inches and more in the 3-4 quarter; SEC and TCL will increase the proportion of CSOT, while SONY may rely more on BOE; the capacity of the exit and entry capacity decreases slightly, once the demand recovers, it may lead to the third quarter or the fourth quarter of the panel. Ask.

Zhao Jun said: "we can foresee that in the future, the upgrading of large-size panels will be transformed from global competition to the competition pattern of domestic panel factories. Based on the existing planning, we expect that by 2023, the market share of TCL Huaxing will reach second in the global market. But TCL Hua Xing also does not rule out in the whole process of industry mergers and acquisitions, restructuring, industry shuffling process, we will look for the right opportunity to further expand the capacity and enhance our market share through the opportunity of mergers and reorganization.

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