LCD panel warms up mainland enterprises

After experiencing continuous losses in the past two years, the global TFT-LCD panel industry finally came back to the news in 2012. Recently, Korean and Chinese Taiwanese panel makers have expressed optimism that the panel market will turn a profit. Under the circumstances that the overall environment of the panel market has improved, the news that China's panel import tariffs may be raised will enable new opportunities for BOE, China Star Optoelectronics, and Chinese Panda Panda manufacturers to usher in new development opportunities. Under the two-wheeled promotion of policies and markets, China's position as an important one of the world's LCD panel industry will be more stable.

Tariff increase is still unknown

From 2011 onwards, the rumors of mainland China's panel import tariff increase will continue to be heard. Recently, it was reported that China will increase import tariffs on LCD panels during the year, and import tariffs on panels with 32-inches and above will increase from 3% to 5%. In response, the reporter did not receive accurate information on the tariff increase of liquid crystal panels when he interviewed the financial policy department of the Finance Department of the Ministry of Industry and Information Technology, the liquid crystal branch of the China Optics and Optoelectronics Industry Association, and the person in charge of the Beijing Qinghua Liquid Crystal Technology Engineering Research Center. However, the major manufacturers of LCD panels in China have a higher call for higher import tariffs.

With the continuous decline in global LCD panel prices, not only international panel giants such as Samsung and LGD have suffered large losses, but also the days of domestic panel makers Huaxing Optoelectronics and BOE. If the import tariffs on LCD panels are adjusted upwards, BOE and China Star Optoelectronics will be supported by the policy and create room for growth for high-generation projects. However, the increase in import tariffs on LCD panels will bring about a series of industrial chain reactions. The increase in import tariffs will cause terminal manufacturers to face increasing costs.

However, some of the entire machine manufacturers have done a desalination. Yang Dongwen, vice president of Skyworth Group, said in an interview with a reporter from China Electronics News that if panel tariffs were mentioned as 5% from 3%, they would not have a great impact on them because their suppliers Chi Mei and AUO would take the initiative to bear some of the tariffs. Cost, at the same time, Skyworth will also digest some of its own when making LCD modules.

In an interview with a reporter from China Electronics News, BOE Executive Director and President Chen Yanshun said: “Improveing ​​the import tariff on LCD panels is not entirely due to the protection of Chinese mainland panel makers. In the past, mainland China did not have the ability to produce large-size LCD panels. The amount of money spent on the import panel is very high. If the import tariff on LCD panels is increased, the purchase volume of domestic panel will increase."

He also explained people's concerns about the maturity of LCD panel technology in China. He said that for BOE, panel production technology is not a problem, and BOE's sixth-generation panel production line has reached the world's advanced level, and is not worried about the problem of short supply. At present, BOE has signed cooperation letter of intent with domestic color TV manufacturers such as Haier, Hisense, Skyworth, Konka, Changhong, and hopes to cooperate with more companies. ”

Market environment continues to pick up

After two years of cold winter, the LCD panel industry will finally show signs of recovery this year. Samsung Electronics and LGD, AU Optronics, and BOE are all optimistic about the LCD panel market in 2012. According to research data from DisplaySearch, a market research company, the demand for LCD TV panels in 2012 will reach 85 million square meters, which is 1.5 million square meters higher than the original forecast.

David Hsieh, vice president of DisplaySearch, said: “As the demand for LCD TVs with a size of more than 40 inches continues to grow, we have increased our expectations for the market demand for LCD panels from 2013 to 2018. The increase in demand for large-size LCD panels will consume more capacity. This also plays a key role in balancing the supply and demand of the panel."

The overall environment of the panel industry has improved, which is good news for domestic panel makers. In 2011, BOE and Huaxing Optoelectronics successively launched the 8.5-generation LCD panel production line in China. The planned annual production capacity is 13 million and 14 million pieces respectively. However, due to the global downturn in the LCD panel industry, since the start of production, the progress of the two local panel makers has not been smooth. The international first-tier panel makers generally suffered losses and once brought tremendous pressure on them. Chen Yanshun said that although the panel market conditions will not change much in the first half of 2012, it is optimistic about the trend of the LCD panel market in the second half of the year.

Zhang Bing, research director of DisplaySearch China, said in an interview with a reporter from China Electronics News: “From the perspective of the global panel market, the United States has shown a warming trend. The status of the Chinese panel market in 2012 will also depend on the following two aspects: First, when will China's new subsidy plan be issued? Second, whether real estate and tariff policies have been adjusted. "In view of Zhang Bing, although raising import tariffs is beneficial in the short term, it may not be a good thing in the long run. The development of China's LCD panel industry focuses on the production capacity and product mix of China's panel makers.

Seeking large-scale development

Since the liquid crystal panel business has fallen into losses, several major panel makers in the world have not come out of the shadows. In 2011, Samsung and LGD reduced or even suspended new investment in the LCD panel field. AU Optronics and Chi Mei Optoelectronics are also actively seeking new directions. If the import tariff on LCD panels is raised, Chinese mainland panel makers will become an important force in changing the global LCD TV market competition.

Zhang Baizhe, professor of the LCD Technology Engineering Technology Center at Tsinghua University, told the China Electronics News that under the circumstances of the overall loss of the LCD panel industry, the government should support the local panel companies in terms of policies. For China's panel makers, the market is a huge advantage. During the "12th Five-Year Plan" period, China's main goal is to expand domestic demand, and the replacement of color TV products is one of the main ways for China to expand domestic demand. He explained that currently China’s CRT TV has 400 million units, and the country plans to complete the conversion from analog to digital TV by 2015. If 20% of CRT TVs are eliminated each year, the demand for color TV in China will have a scale of 80 million units. At least 8 to 10 8.5-generation LCD panel production lines will be built in China to meet the demand. In the face of the sluggish global panel industry, if China's panel makers can grasp the timing, there will be opportunities to buck the trend.

However, the LCD panel industry in Mainland China has only just begun, and it still lacks competitiveness in terms of scale compared to first-tier panel makers. At present, South Korea has always been the largest producer of large-size LCD panels. Its output is close to half of the world's total. China's Taiwan accounts for 40% of the world's total production. Japanese panel makers gradually fade out of large-size panel production.

Zhang Baizhe suggested that in order to win a larger market for the LCD panel industry in mainland China, long-term plans, comprehensive layouts, and planned production of high-generation panel production lines are required. The current priority is to “focus on development and form a scale” and at the same time further promote the rapid development of supporting industries.