Recently, there have been reports that the rise in LCD prices is expected to continue due to the adjustment of production lines and terminal demand of related manufacturers. At the same time, the domestic high-generation LCD production line was gradually completed and put into production, and the new production line of OLED was started. We believe that the improvement of the layout of China's panel manufacturing industry will drive the development of the entire industry chain. This paper analyzes the layout of the flat panel display industry and the main links of the industry chain, and explores the investment opportunities of related companies in China.
Report highlights
Capacity adjustment, LCD panel prices bottomed out
Since April 2016, LCD TV panel prices have bottomed out. With the adjustment of the production line of major manufacturers in Korea and the product structure at the demand side, we expect this price recovery to continue until the first half of 2017 and remain relatively stable during 2017. At the same time, changes in the business strategy of relevant LCD panel suppliers will also affect the supply and demand situation of the industry chain. Many domestic high-generation LCD production lines have been gradually put into operation, and we believe that Chinese LCD companies will benefit from the upstream industry cycle and drive the development of the entire industry chain.
OLED layout unfolds, breaking the monopoly of foreign manufacturers In 2017, the introduction of new iPhones to OLED screens has driven Samsung, LGD's OLED capacity expansion, while other panel makers are gradually starting to build new OLED production lines. As supply increases, production yields increase and production costs decrease, we expect smartphone OLED penetration to reach 45% in 2018, and it is expected to replace LCDs in 2020, with penetration rates up to 65% and being used for many more. Terminal products. We believe that the domestic OLED production line will release capacity in 2018, supply 30% of the global OLED consumption, and gradually realize the domestic replacement of OLED screen.
The domestic panel production line layout drives the upstream and downstream demand of the industrial chain
At present, there are 4 high-generation TFT-LCD production lines and 4 OLED production lines under construction in China, with a total investment of 200 billion yuan. As the new production line is completed and put into production, we believe that panel production equipment suppliers will benefit first. After the release of the domestic panel supplier's production capacity, the demand gap of the large-size panel of the terminal will be filled, and the price increase and the local advantage will increase the price and increase the revenue growth. At the same time, the global panel manufacturing industry has a clear trend of shifting to the domestic market, and many planned production lines are expected to continue to drive industry demand.
National policies continue to support, advanced display development can be expected
Since 2005, the Chinese government has actively promoted the construction of the panel industry. From the policy, the funds face the industrial layout of the Chinese industry. Recently, the State Council’s latest “13th Five-Year National Strategic Emerging Industry Plan†re-emphasizes “realization of active matrix organic light-emitting diode (AMOLED), ultra-high definition (4k/8k) quantum dot liquid crystal display, flexible display and other technologies. Breakthrough and scale application." At the same time, we have seen that the panel industry supporting parks have gradually formed in various regions of the country, and the integration of upstream and downstream of the industrial chain has highlighted the domestic advantages.
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