Chinese Display Businesses Are Rapidly Investing In Large LCD Fabrication Facilities

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While South Korean display businesses are being hesitant in new investments, Chinese display businesses are actively investing.

After BOE had announced about its establishment of world’s first Gen. 10.5 LCD production facilities, CSOT is also pushing to invest in Gen. 11 by increasing the size of glass boards.
Because Samsung and LG Display have not decided on constructing Gen. 10 LCD facilities, industries are pointing out that they can lose control of markets just like that and even lose number 1 position in the world.

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According to industries, CSOT has recently started examining construction of Gen. 11 LCD facilities and discussing with couple global equipment businesses about introducing relevant equipment. Just like any other Chinese display businesses, it is co-investing with Chinese central and local governments.
Along with BOE and Tianma, CSOT is a major Chinese businesses that is aggressively trying to expand out of displays. As it had constructed new Gen. 6 facilities in Wuhan region this year, it is a business that had invested the most in facilities out of all of Chinese display businesses. It has started operating Gen 8.5 lines at T2 facilities in Shenzhen starting from this year.

By constructing Gen. 11 facilities with world’s biggest boards, CSOT is trying to display its technical skills and keep BOE that has rapidly emerged as CSOT’s competitor in check. 8 65-inch cuts can be produced from one mother glass at Gen. 10 while only 3 65-inch cuts can be produced from Gen 8.5.

베이징 이좡단지에 있는 BOE의 8.5세대 라인

“As competitions between local governments become fiercer, financial help will be one of the most important supports. From a technology perspective, Gen. 11 has been considerably progressed as equipment businesses have been preparing for it for many years with next-generation technologies after Japan’s Sharp had operated Gen. 10.” said a person in this industry.

BOE, which is starting is construction of Gen. 10.5 Production Lines in December, is extending facilities again. Gen. 10.5 facilities are ‘B9’, and B10 facilities will be built in Huzhou as Gen. 8.5. Its Gen. 8.5 facility is the 4th Gen 8.5 facility after Chongqing, Hefei, and Beijing. CEC-Panda is also working on constructing Gen. 8.5 facilities in Nanjing, and announcement of 56 biddings related to investments in facilities had happened in just last 1 month.

Unlike Chinese display industries, South Korean industries are being passive in new investments. If Chinese businesses are operating new Gen. 10 facilities, which have high chamfer efficiency, one after the other, reduction in profitability will be inevitable due to oversupply of panels. South Korean display industries are considering whether to correspond against Chinese businesses by expanding their LCD production capabilities or to differentiate themselves by making new investments in OLED.

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Although Japan was controlling LC panel market earlier on, South Korean businesses began to take control starting from 2000 and have high market shares. However it is predicted that China will surpass Korea’s production capability in upcoming 2018 on area of a glass. Hana Financial Investment is predicting that Chinese panel businesses’ production capabilities will increase 15 to 17% more next year compared to this year.

“As Chinese panel businesses make follow-up investments one by one, South Korean display equipment businesses will greatly benefit from it.” said one person in this industry. “Strategic approach is needed so that they can continue their relationships with Chinese businesses rather than just delivering equipment to them temporarily.”

Staff Reporter Sung, Hyeonhee | [email protected]

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