Growing number of Chinese smartphone makers are raising investments in OLED panels, including BOE Technology Group and six other major local players have constructed new factories and invested in total more than 2 trillion Japanese Yen (US $9 billion), reported Nikkei Asian Review.
Chinese enterprises often receive large financial support from local governments and invest large funds in OLED panels. Chinese enterprises swarming the OLED sector is ushering in new developments that could allow the technology to replace TFT-LCD panels in the near future.
The report noted Japanese manufacturers were once in the lead in smartphone and TV display technologies, whether it is mainstream TFT-LCDs or next generation OLED screens. After the turn of the millennium, Korean manufacturers have led the mass production of LCD screens, Samsung Electronics, for example, monopolized the market of OLED panels for smartphone applications.
Meanwhile, Chinese LCD manufacturers scaled up investments, and is projected to overtake Korean manufacturers’ top global position by 2018. Moreover, Chinese manufacturers are expanding their business in OLED panels, which outlines Chinese manufacturers’ clear market strategies in advanced electronic component industry.
China’s largest panel maker BOE Technology Group is constructing an OLED panel factory in Chengdu, Sichuan, China. The fab has a monthly production and supply capacity of 10 million smartphone OLED panels, and invested more than 500 billion Japanese Yen. The factory entered production through different phases, and will start mass production as early as 2019. Huaxing Photoelectric Technology constructed a factory of considerable size in Wuhan, Hubei.
Apple told clients that it intends to use OLED screens in certain iPhone models in 2017, which according to industry sources spurred BOE Technology Group and CSOT to pump massive funds into related projects. The above two Chinese manufacturers analyzed Chinese smartphone manufacturers, such as Huawei, will also start using OLED, which would in turn spur demands.
Compared to TFT-LCD, OLED has better color saturation performance and is flexible. Hence, the design offers more form freedom, and smartphone manufacturers start the R&D process for next generation products to gradually adopt OLED, while panel manufacturers are accelerating supplies.\
Tianma Micro-electronics also deployed its OLED market strategies, converting a TFT-LCD plant in Wuhan into an OLED factory. Hehui Photoelectric, Viosionox and other companies also built new factories.
Even Chinese start-ups such as Royole relied on government financial support to complete an investment of 300 billion Japanese Yen.
If Chinese companies plan to initiate production in the future, global smartphone shipment volume will reach more than 30% of market demands. However, OLED production has a higher entry level even leading supplier Samsung which delivers 300 million smartphone OLED panels is still concerned with raising yield rates.
Surging OLED production could trigger an avalanche in pricing, additionally yield rate issues will lead to escalating costs. All these will aggravate Chinese manufacturers’ management operation risks.
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