China Needs To Contend With The Development Of OLED Panel Industry

Due to the poor sales of Apple's iPhone X, which caused its supplier Samsung's OLED panel overcapacity, and even the phenomenon of falling prices, in this environment, the author believes that Chinese panel companies should continue to expand the OLED panel production capacity.

The market for small and medium sized OLED panels in the world is dominated by Samsung, which occupies a share of more than 90%, followed by LGD, which has a share of approximately 5%. The share of Chinese OLED panel companies is relatively limited. Last year, Apple's iPhone was the first to use the OLED panel to launch the iPhoneX to give the panel industry excitement. They believe that the development opportunity of the OLED panel industry will come. Under the influence of the Apple iPhone, the OLED panel will quickly become popular in the smartphone industry.

However, Apple's iPhoneX sales are far less than expected. According to the data released by the market regulatory agency SA, the sales volume of iPhoneX is currently around 50 million units, while Apple originally ordered 80 million OLED panels for the iPhoneX, which shows that its sales volume is much lower than expected. Due to this factor, Apple is not confident that the follow-up iPhoneX models that will be introduced this year with OLED panels will be insufficient. Analysts pointed out that Apple's orders for OLED panels were only 50 million to 55 million, lower than last year's orders for OLED panels.

Affected by the poor sales of iPhoneX, Samsung’s OLED panel production capacity is in surplus, and LGD has slowed the production capacity of small and medium sized OLED panels. (LGD is a large-size OLED panel manufacturer for TVs. It is affected by the rapid growth of OLED TV sales. It is in Guangzhou, China. Invested 30 billion yuan to build 8.5 generation OLED panel production line. LGD actively put into production of small and medium sized OLED panels was originally intended to compete for Apple's orders for OLED panels. Now it has also slowed this plan due to Apple's declining demand for OLED panels.

Under such circumstances, it is precisely for the Chinese panel companies that it is exactly the opportunity to develop the OLED panel industry in a contrarian direction, and should not be affected by the slowdown in the production of small and medium sized OLED panels by South Korea's two giants Samsung and LGD.

Chinese panel companies such as BOE and Tianma have already put into production OLED panels. However, they currently have low yields and limited production capacity. Even if they originally claimed to start supplying OLED panels to Huawei, recently Huawei's P20Pro handsets use OLED panels supplied by LGD. This shows that BOE's OLED panel may not meet Huawei's requirements.

One of the reasons that China's panel makers are making slow progress in yield improvement and capacity expansion is the limited production capacity of Tokki vapor deposition equipment in the small-to-medium sized OLED panel evaporation process. The Tokki vapor deposition machine was previously produced. Cannon gave this equipment to South Korean companies as a priority. In particular, Samsung had even purchased the equipment in the previous two years, making it extremely difficult for Chinese panel companies to purchase Tokki vapor deposition machines.

BOE is the first panel company among Chinese panel companies to get the Tokki vapor deposition machine. This is one of the reasons why it can be the first large-scale production of small and medium sized OLED panels by domestic panel companies. Today, due to the overcapacity of Samsung OLED panels and the impact of LGD slowing down the expansion of small and medium sized OLED panels, Tokki's evaporators are in surplus, and Cannon, which manufactures such devices, is actively marketing to Chinese panel companies. In addition to such equipment, in addition to the production of other key equipment and materials for small and medium sized OLED panels, related companies are also prioritizing the supply of Korean panel companies. Today, the declining demand for key equipment in Korean companies is precisely the opportunity for China to obtain such equipment. This will help China's panel makers rapidly expand the production capacity of small and medium size OLED panels.

China's manufacturing industry needs OLED panels. China's smart phone companies actually have a huge demand for OLED panels. Among the top four domestic mobile phones, OPPO and vivo are relying on Samsung OLED panels and occupying over 70% of the market share of OLED screen handsets in China. However, OPPO and vivo have paid a high price for this. Other domestic mobile phone brands have difficulty obtaining the supply of Samsung's OLED panels. If Chinese OLED panel companies' OLED panels catch up with South Korean panel companies in terms of technology and quality, Chinese mobile phone companies can hope to digest these. The OLED panel production capacity promotes the development of China's OLED panel industry.

In the LCD panel industry, Chinese panel companies have achieved the status of the world’s second largest LCD panel production site through continuous continuation of investment. Now China is expected to expand in contradiction to the OLED panel considered as an alternative technology to LCD panels. The opportunity quickly catches up with Korean companies, which helps China's manufacturing industry to get rid of dependence on foreign advanced technology industries.