Samsung'S U.S. Plant Shutdown Causes Global Core Shortage Chain Reaction, Domestic OLED Industry Faces The Risk Of Power Failure

Global core shortage is spreading from automobile industry to mobile phone, PC and other industries.

The latest report shows that Apple will also be affected by the core shortage crisis, and even the iPhone product line may face a shutdown crisis.

According to the report, the global core shortage has greatly affected the supply of Samsung's OLED display panels, while Samsung's Texas chip manufacturing plant has been shut down due to Blizzard and power failure last month. The factory was also responsible for the production of OLED display chips for the iPhone, which will directly lead to a setback in the supply of iPhone screens.

At present, affected by the global chip shortage, more and more mobile phone brands begin to face the situation of insufficient production capacity. Millet President Lu Weibing is more direct, "this year's chip is too short, not lack, is extremely short."

At present, there are a lot of OLED panel production capacity in mainland China. What impact will global core shortage have on domestic OLED panel production? As the "last mile" of commercialization, what is the domestic rate of OLED panel driver chips? Which downstream industries will be affected? 21st century economic reporter focuses on the OLED panel driver chip industry and tries to answer the above questions.

Lack of core wave affects panel industry

According to the previous report, Samsung's closed U.S. factories account for 5% of global smartphone and PC chip supply, from which Apple needs to purchase chips for OLED displays on a large scale every year. As a result, the closure of Samsung's factories in the United States has affected Samsung's supply of Apple's screens.

Due to the tight supply of Samsung's display chips, Samsung has raised the price of OLED panels. According to reports, Samsung has increased the price of OLED screens by 5% - 8%.

"The shortage of drive chip production capacity has affected the OLED and LCD industries, causing the price of panel industry to continue to rise. Samsung's rigid OLED price has increased, and the price of LCD panel may rise by 30% - 40% in the next two months." Lin Zhi, chief analyst of witdisplay, said in an interview with 21st century economic reporter on March 23.

The lack of core also affects the domestic panel industry.

On March 23, in the face of a question about whether it is affected by the industry's core shortage and whether the screen driver chips are out of stock, shentianma replied, "the supply and demand of raw materials is a dynamic process, and the relatively tight driving IC is a situation faced by the whole industry. The company has established friendly cooperative relations with thousands of suppliers around the world, maintains and seeks long-term deep cooperation, and constantly promotes the security, localization and diversified procurement of the supply chain. At present, the company's products related to the supply of raw materials to maintain a good state. "

Although shentianma said that the current supply is stable, whether from the perspective of capacity release of OLED panel industry or the degree of autonomy of core technology, the problem of core shortage may be more serious than expected.

In recent years, with the rise of domestic panel manufacturers, domestic LCD panel has occupied half of the whole LCD panel market. In the field of OLED panel, Korean panel manufacturers led by LG and Samsung occupy an absolute dominant position, accounting for more than 80% of the OLED market share. Domestic manufacturers are striving to catch up in the OLED field.

Just at the beginning of this year, BOE issued a 20 billion yuan fixed increase plan, of which 6 billion yuan was used to increase capital and build Chongqing's sixth generation AMOLED production line. The construction period is from the end of 2018 to the end of 2022, and the design capacity is 48000 pieces / month. Vicino focuses on AMOLED panel business and invests in 3 AMOLED panel production lines and 2 supporting module production lines. Last year, Hehui optoelectronics rushed to the science and technology innovation board, and planned to raise 10 billion yuan to invest in the sixth generation AMOLED production line for capacity expansion. At present, the production capacity of the 4th.5th generation AMOLED production line is 15K / month, and the planned capacity of the 6th generation AMOLED production line is 30K / month.

In addition, Shenzhen Tianma and TCL technologies have the sixth generation AMOLED production lines under construction or production.

"With the continuous release of OLED production capacity in mainland China, the gap between China's OLED industry and South Korea will continue to narrow, and gradually build a leading edge. The OLED sector will probably become the next" sniper's mouth ", which should be highly valued." SaidI think tank pointed out.

Where to start sniping? In the display module, not only the OLED panel is very important, but also its driver chip is very important.

It should be noted that the domestic rate of domestic OLED panel driver chips is not high. In the case of tight supply of Samsung display chips, will the impact of core shortage on domestic OLED panels be further intensified?

The localization rate of OLED chip is low

From the demand side, China has become the world's largest buyer of OLED panels for smart phones. According to the agency's estimation, the market size of China's OLED industry is about 15 billion US dollars, but the global shipment only accounts for about 9%. It is estimated that with the implementation of AMOLED projects under construction / to be built in China, the market share of flexible screens produced in China will increase to about 25%.

However, as the core technology of the panel, the degree of localization of the driver chip is not high.

Zhang Zhihe, chief consultant of Shanghai transfer point information, said in an interview that "the domestic rate of driver chips of relevant domestic panel manufacturers is relatively low, mainly using chips imported from South Korea; in terms of LCD driver, the domestic rate is about 10%, and there is no real domestic manufacturer of OLED for mobile phones. What has done relatively well in China is OLED driver of yunyinggu and application of watches Such as this OLED market share is relatively high, technology requirements are not as high as mobile phones. "

Data released by omdia, a market research company, last year showed that the market share of OLED display drive IC (display drive IC) in the smart phone direction of Korean enterprises accounted for 90%, with Samsung Electronics ranking the first, accounting for 50%; and magana chip, the second, accounting for 33%, accounting for more than 80%.

Take panel giant BOE's data as an example. In 2017, in response to investors' questions, the company said that the suppliers of OLED driver chips currently used were mainly overseas companies. In 2018, BOE said in the face of the same problem, "the company's driving IC is partly imported, and part of it is domestic. The company will increase the introduction of domestic materials under the condition of domestic supply. The company has been actively training localization suppliers and striving to promote the development and improvement of domestic upstream industrial chain."

Although it has been promoting the introduction of domestic IC, by 2019, BOE has purchased more than 6 billion yuan of screen driver chips, of which domestic chips still account for less than 5%.

"First, the development of OLED driver chips needs to be driven by the OLED panel industry. Only 13% of mobile phone OLED panels were shipped in mainland China last year, and OLED driver chips lack good growth soil. Second, AMOLED driver chip has certain technical threshold. Different from LCD in driving mode and pixel layout, AMOLED needs special algorithm and circuit compensation to eliminate mura, and the cost of tape and production is high. Third, due to insufficient technology accumulation and low yield rate of OLED driver chip manufacturers in mainland China, downstream application manufacturers dare not import them in large quantities for the time being. " Linzhi said in analyzing the reasons for the low domestic rate of driver chips.

If the production capacity of OLED is affected, the risk of downstream industry will be further intensified. Firstly, all mobile phone manufacturers have the risk of core shortage; secondly, the lack of screen is mainly restricted by upstream materials, driving chips, polarizers, etc., which limits the panel capacity. Then, TV, tablet, computer, automobile industry will appear similar "lack of core and less screen".

Plan to break the situation

In the current predicament, the other side of the coin is the huge domestic replacement prospect of display driver chip.

In August last year, some media reported that Yu Chengdong of Huawei signed and issued a document called "notice on the establishment of display driver product field of terminal chip business department", which showed that Huawei would establish a department to make screen driver chips and enter the screen industry. At the end of that year, it was reported that Huawei's display driver chip had been taped, which was expected to be used in Huawei's own mobile phones and large screen products.

In addition, 21st century economic reporter learned that huiding technology, Jichuang north, Zhongying electronics, Shenghe microelectronics, gekewei, yunyinggu, gidith, xinxiangwei, Huawei Hisilicon, Xinying and easway have entered the chip driving link.

Among them, Zhongying electronics has been involved in panel driver chip research and development since 2009, AMOLED driver chip samples were produced in 2015, and mass production began in the third quarter of 2018; giddy mass produced rigid screen AMOLED chips in the second quarter of 2016, and formally produced 40 nm AMOLED driver chips jointly with SMIC International in September 2018; in the second half of 2019, easwey and yunyinggu began mass production of AMOLED driver chips; in 2020, the company began to produce AMOLED driver chips In June, 2009, the North headquarters and display driver chip design and advanced test base project was officially started.

According to the 2020 annual report released by Zhongying electronics, the company realized a business income of 101.225 million yuan, an increase of 21.35% over the same period of last year, and the net profit attributable to shareholders of listed companies was 209.6 million yuan, an increase of 10.71% over the same period of last year.

According to the annual report, the company's sales growth was mainly due to strong growth in customer demand in various fields, but was still limited by the insufficient capacity supply of upstream wafer plants. Sales increment from large to small are lithium battery management, home appliance master control, motor control, AMOLED display driver, computer peripheral, IOT and smart meter chip. Zhongying electronics once pointed out in the third quarter report of last year that "the market demand of AMOLED display driver chip products is booming, and the fast growth rate is also related to the lower base period."

Bigger challenges lie ahead.

Lin Zhi said, "the domestic OLED driver chip head manufacturers have exceeded one million pieces, but there is a huge gap with foreign manufacturers in terms of yield, stability, reliability and high PPI implementation. Chinese mainland OLED driver chip manufacturers still need technology precipitation to jointly overcome technical difficulties with panel manufacturers, so as to better meet the development opportunities of China's OLED industry 。”

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