Lcd display supplier.Show overcapacity in the industry. LCD panel prices enter the fast downward channel. This is a microcosm of the current display industry. The price rise of LCD panel in the first half of 2021 has also set a record at some levels.
At the end of last year, we wrote that the price of the LCD panel entered the fast downward channel. This is a microcosm of the current display industry. The price rise of LCD panels in the first half of 2021 has also set a record at some levels. In fact, this can be seen as a watershed event in the development of the industry.
Overall, the display industry as a whole, 2020, 2021 these two years can be described as smooth wind, the situation is very good. The general direction of product shipments are increasing, prices are rising, mainly to the seller’s market, technical iteration led to cost reduction, gross profit margin is also steadily increasing. But at the same time, as a cyclical industry, the periodic fluctuation of the relationship between supply and demand also leads to both high and low levels in the market. 2022 may be, or has been, a new trough for the industry; and things are getting worse and worse.
Ross Young, CEO of DSCC (Display Supply Chain), recently delivered a keynote speech, giving an overall overview of the changes in the industry over the past two years and predicting future trends. From the general direction, the oversupply of the market has become the main theme this year.
In fact, from a technical point of view, the two big categories LCD and OLED are still developing rapidly-so the cyclical changes in the industry and the upward trend in the general direction will not change at 01:30. In terms of LCD (liquid crystal display), the strong momentum of miniLED is well known, including the improvement of miniLED backlight for picture contrast and brightness, as well as the reduction and evolution of thickness and power consumption. LCD itself has made continuous progress in the aspects of high refresh rate, response time, variable refresh, power consumption, thickness, frame width and so on.
The innovation of OLED technology still revolves around cost reduction. The direction of technological progress related to OLED, including series RGB OLED, phosphorescence blue OLED emitter, COE (color filter on encapsulation), MLA (multi-lens arrays), auxiliary electrode, variable refresh-these technologies can greatly reduce power consumption. In addition, the adoption of G8.5-G8.7 substrates by panel suppliers, IGZO backplanes with high mobility and low number of masks, and non-traditional hard + thin film packaging (rigid + TFE) all reduce panel thickness and weight, and continue to reduce costs. Although many of these technologies will not be available on a large scale until 2024.
The overall situation of 2020-2021 shows the downwind of the industry. Overall industry revenue reached $164 billion in 2021, up 31 per cent from a year earlier. This rise has a lot to do with the COVID-19 epidemic, especially the demand for work from home and online classes, which pushed up the sales of notebook PC products in two years; the demand side soared in a short period of time. In 2020 plus the first half of 2021, it shows that capacity utilisation in the industry is strongly driving up-in fact, it will be even higher if the components required for the display panel are not missing.
The supply side failed to keep up with the market changes quickly in 2020, and the rise in glass prices and DDIC shortage continued for a period of time. It has also led panel makers to focus for some time on producing higher-margin products. This has pushed the gross margin of the industry as a whole to a new high.
In the past two years, there are two main sub-items that show strong growth in the industry: IT panels, whose revenue accounted for 29% of total market revenue in 2021-about 20% in 2010. The key factors for revenue growth include price increases and the adoption of miniLED; TV, revenue share reached 28%, in addition to panel prices, TV panel area has also increased over the years. Mobile phones, which have long accounted for the largest share of the display industry, have fallen from 38% to 30%, which is probably not a good sign for the main theme of the recent bad smartphone industry.
From 2019 to 2021, the overall display area is also getting larger, with the average diagonal length of display screens in all categories increasing by 7% in the past three years, of which the display screen (monitor) grew by 5% to an average of 25 inches, and the TV screen diagonal grew by 8% to 47 inches. From an area point of view, television remains the largest category in the industry, accounting for 69% of the industry’s display area in 2021.
After a year of price increases by LCD, BOE ranked first in panel supplier revenue, with revenue growth of 73 per cent and 19.1 per cent of industry-wide revenue, according to DSCC. Samsung Display slipped to second place, followed by LG (LG Display). In the LCD field, the top 8 suppliers all had double-digit revenue growth in 2021. It can be seen that a wave of price increases in LCD has created market opportunities for how many enterprises. Beijing Oriental, LG, Youda, Qunchuang and Huaxing are all typical of them.
In fact, as we reported before, due to the long-term price increase of LCD, some companies that were already closing LCD manufacturing plants (such as LG) also expanded their production capacity in the short term, delaying the shutdown.