Under the influence of the new crown epidemic, the overall shipment of smartphones this year is expected to be greatly reduced. At present, the global OLED supplier pattern has basically taken shape, South Korea is in a relatively dominant position, and domestic companies are catching up. It is estimated that by 2020, China’s OLED production capacity will account for about 28% of global production capacity, becoming the second level of global OLED supply. The output of OLED mobile phone displays will surpass that of LCD in 2020 and will reach 65% of the market share by 2025.
According to Omdia (formerly IHS) data, due to the impact of the epidemic on consumer demand and supply chain supply, global smartphone shipments are expected to drop by 13% in 2020. However, AMOLED panels used in smartphones can overcome the crisis. Omdia expects its shipments to surge from 471 million in 2019 to 513 million. The penetration rate of AMOLED mobile phone panels will increase against the trend.
The reason why AMOLED panel shipments can grow against the trend is largely related to the release of OLED production capacity by Chinese panel manufacturers. In recent years, manufacturers such as Huawei, Xiaomi, and OPPO have installed domestic AMOLED screens on their flagship products, which has greatly increased the shipments of domestic screens and the market share has also steadily increased. However, with the release of OLED production capacity of various manufacturers, there will be a situation of oversupply of OLED panels, and various manufacturers may start a “price war” in order to seize market share.
Enter the flagship products of first-line brands
In recent years, with the improvement of domestic panel manufacturers’ OLED technology and the release of production capacity, domestic OLED panels have gradually been applied to the flagship phones of terminal brands.
As a leading Chinese Display panel company, BOE currently has the largest domestic flexible AMOLED panel layout. It is also the first to announce the mass production of the G6 flexible AMOLED production line. Its flexible AMOLED applications have been ahead of other domestic manufacturers.
In the beginning, BOE flexible AMOLED can only be applied to some low-end models. However, since 2018, Huawei has equipped BOE’s flexible screen on the flagship P2O pro for the first time, opening the journey of domestic flexible screens to the first-line flagship. After that, Huawei’s P30 and Mate series have successively adopted BOE’s flexible AMOLED screens. In addition, the industry has also recently reported that mobile phone brands such as Samsung Electronics and Apple want to cooperate with BOE and require BOE to supply flexible screens for their flagship products.
Another TCL Huaxing also quickly entered the AMOLED market. Previously, the folding screen produced by TCL Huaxing has been supplied for Motorola Razr mobile phones, and Xiaomi’s recently released Xiaomi 10 also announced the use of TCL Huaxing’s customized AMOLED curved screen. In addition, it is reported that due to the association between TCL Huaxing and SDI in the field of LCD panels, the company may enter the Samsung supply chain in the future. In this regard, Li Dongsheng, chairman of TCL Technology, said that with the ramping up of production capacity and the development of new customers, TCL Huaxing is expected to increase the volume of flexible OLEDs faster in 2020.
Visionox’s previous focus was on PMOLED products. With the upgrading of market demand, its product focus has gradually shifted to AMOLED. Since then, its AMOLED penetration can be described as rapid. Since entering the Wolf Warriors AGM X2 in 2017, Visionox has successively supplied flexible AMOLED screens for terminal products such as the Nut Pro 2S and Nubia Red Magic 5G gaming phones, and entered Huawei’s supply this year. Chain, supplying flexible AMOLED screens for Honor 30 series and other products.
At the same time, Hehui Optoelectronics AMOLED also has a good performance. As the manufacturer with the largest hard-screen production capacity in the existing domestic production capacity plans at this stage, it will continue to make efforts in the hard-screen field in the future, and strive to provide hard-screen products to more brand customers. Its G4.5 is operating well, and the G6 production line has been Mass production and shipment started in March.
In addition, Shen Tianma, which has been working on small and medium-sized mobile phone panels, actually has a great advantage in the smartphone market. However, due to the fact that it has been supplying more LCD products in the past, the AMOLED layout seems to be a little slower than the other companies. At present, it mainly focuses on hard screens. In the future, it will deepen the development of flexible products. At this stage, its customers are mainly Lenovo, Asus, and HTC. .
Regarding the reason why domestic OLED can quickly enter the first-line brands, Wu Shuyuan, a senior analyst at Sigmaintell, told Jiwei.com that due to the impact of international trade frictions, supply chain security has become the focus of attention, and brand manufacturers are aware of strategic training and self-improvement. The importance of the supply chain, the screen is the core component of the mobile phone industry chain. At present, Huawei, Xiaomi, OPPO, ZTE and other brands have cooperated in the research and development of new technologies, strategic supply of high-end models, and gradually formed collaborative innovation centered on enterprises. system.
Market share continues to increase
As more and more terminal brands adopt domestic AMOLED screens, the AMOLED shipments of domestic panel manufacturers have also continued to increase, and their market share has also continued to increase.
According to Omdia data, in 2019, Chinese panel manufacturers shipped 105 million OLED panels, a significant increase from 32 million in 2018. Among them, a total of 53.8 million smart watch panels were shipped, and 52 million smart phone panels were shipped.
Among them, in the flexible OLED panel market, BOE’s flexible displays reached 17 million units, a year-on-year increase of more than 4 times; Visionox followed closely, with a total of 2.6 million panels shipped last year; Tianma and Rouyu were also in 2019. Entered the flexible OLED panel market in 2009, and each company shipped approximately 10,000 panels. In terms of rigid OLED displays, Hehui Optoelectronics shipped 26.7 million units, ranking first in China, while BOE followed closely with its shipments of 22.1 million units, a year-on-year increase of 12 times.
Although the market share of domestic OLED panels continues to increase, in terms of technical strength and production level, domestic manufacturers such as BOE, TCL Huaxing, Visionox, Tianma still have a big gap with Samsung. Sigmaintell senior analyst Wu Shuyuan told Jiwei.com, “Compared with major international Display panel manufacturers, domestic AMOLED panels need to be improved in terms of yield, display performance, and product reliability. For example, Samsung’s flexible screen is good. The rate can reach 80-90%, the domestic panel factory’s hard screen yield rate is 70-80%, and BOE’s publicly announced flexible screen yield rate is 70-80%.”
The Secretary of the Board of Shenzhen Tianma also stated frankly on the investor interaction platform, “AMOLED technology has a high threshold, and the development of flexible displays has brought many technical challenges. China’s domestic panel manufacturers AMOLED new technology and AMOLED industry chain are still in the growth stage, with production capacity and yield rate. The stable release of the drug will take time to cultivate.”
Centralized production capacity release OLED prices continue to fall
With the acceleration of the domestic OLED industry layout, the production capacity of various manufacturers is gradually released. BOE said that in 2020, with the release of the company’s production capacity, the company’s customers and product structure will also be further enriched. In April, the company’s monthly shipments of flexible AMOLED products exceeded 3 million, and the follow-up will continue to increase.
In addition to BOE, other panel manufacturers are also accelerating the layout of OLED panels. According to incomplete statistics from Jiwei, there are already 21 OLED production lines built and under construction in China, of which 15 are 6-generation lines, and the total production capacity will exceed 500K/month after full production. At present, 14 production lines have achieved mass production or full production. Among them, 7 are 6-generation lines with a production capacity of more than 250K/month.
According to industry analysis, as the yield rate of OLED panels from panel makers in mainland China increases, shipments will increase, and OLED panel prices will fall.
“The OLED price war has already begun.” An industry insider said that the domestic OLED technology was not strong before. Even if it wants to fight a price war, there is no way. However, since 2018, the mainland has been in the yield rate of OLED production and other aspects. Improvement, especially in the field of mobile phone panel applications. With the release of domestic panel makers’ production capacity, OLED panels may become oversupply this year.
In terms of product prices, OLED panel prices have also continued to decline this year. According to data from CINNO Research, the price of 6.4-inch flexible AMOLED panels has dropped from US$55 in February to US$53 in April, an average drop of US$1 per month, while 6.4-inch rigid AMOLED panels have also fallen from US$26 in February to April. To 24.5 US dollars, an average decrease of 0.75 US dollars per month.
Regarding the decline in the price of OLED panels, Visionox said that the OLED industry is still in a rapid development stage, especially flexible OLED-related products, which are rapidly iterating in terms of form and integrated functions. For the same product, the price during its life cycle will be a downward trend.
Qunzhi Consulting also predicts that under the sluggish overall demand, the price of smart phone panels will show a downward trend in May; among them, in terms of OLED products, flexible supply and demand will continue to shrink, and a variety of panel forms will present stepped prices.
For the price reduction of flexible OLED, Visionox believes that it mainly lies in three aspects. The first is the increase in the bargaining power of upstream raw material purchases brought about by the increase in production capacity; the second is that the scale benefits are obvious after the increase in production capacity, and the cost allocation is more reasonable; the third is the further improvement of the yield rate.
Visionox also stated that at the stage of rapid development of OLED technology and products, panel manufacturers can only maintain competitiveness by continuously launching new products that meet market demand through technological innovation.
However, many people in the industry said, “Competition tests the overall strength. The biggest advantage of domestic companies is that prices can be lower.” As market competition pressure increases, Apple and Samsung also want to incorporate BOE into the supply chain. Stimulate pricing competition among component suppliers, improve product bargaining power, reduce production costs, and obtain maximum benefits. For BOE, if it can be included in the supply system of international top-tier brands such as Apple and Samsung, its market share will also increase rapidly.