Flat panel display: supporting the need to resolve

The flat panel display industry is listed as an important part of the country’s strategic emerging industries. This “national will” shows the Chinese government’s determination and confidence to support the development of the autonomous flat panel display industry. However, it is undeniable that China’s flat panel display industry has long been “painless” and has long been eager to break the “restricted” position in the upstream and downstream of the industrial chain.

This year, the development of the flat panel display industry in China began to take a turn for the better. In June, the 8.5-generation BOE line started production and will produce 13 million screens per year. In August, TCL Shenzhen Huaxing 8.5 production line was put into operation, with an annual output of about 14 million TV modules. The successive production of these two high-generation lines, together with the G6 and G5 that have already been put into production, will completely solve the "painless pain" that has plagued domestic color TV companies for many years.

However, the "painless screen" can only ease the passive situation of the panel supply has improved, the entire industry is still unable to reverse the passive situation, core technology and innovation capabilities, capital scale, upstream supporting industries, talent reserves and other aspects There is still a clear gap between developed countries and regions. Liang Xinqing, Secretary-General of the China Optics and Optoelectronics Industry Liquid Crystals Branch, told reporters at China Electronics News: “We have a production line now. If we have more layouts and individual operations, we will not be able to achieve scale, and we will still be at a disadvantage in competition. How to strengthen the coordination and integration among enterprises, maximize the scale effect, and promote technological innovation and progress is an important issue before us."

Overcapacity vs. Scaled development

At present, data from downstream terminals is not optimistic.

In the first half of 2011, the downstream of the flat panel display industry in China did not increase as expected. According to AVC statistics, the total retail sales of LCD TVs in China in the first half of 2011 was 16.921 million units, a year-on-year increase of only 7.8%. DisplaySearch’s latest report stated that due to the continued downturn in the developed countries, global TV shipments in 2011 were 3% lower than expected and were 252 million units. WitsView, a market research organization, has twice lowered its 2011 global LCD TV market expectation from June this year to between 201 million and 203 million units. Uncertain global economic recovery and weak downstream demand led to continuous decline in LCD panel prices since May 2010.

In the face of these bad news, some media and industry insiders have advocated the crisis brought about by the surplus of TFT-LCD industry, rendering some pessimistic arguments of “production is loss”. In this regard, Gu Zhihua, director of the Flat Panel Display Engineering Research Center of Fudan University Advanced Materials Laboratory, told the China Electronics News reporter that “the TFT-LCD industry is facing a disaster with excess capacity” is a one-sided statement. "In fact, China's TFT-LCD production capacity can not meet the needs of the domestic industry. For China, there is no excess capacity. Even if China builds 3 to 5 high-generation TFT-LCD production lines, it may lead to excess domestic production capacity, but in the industry The overcapacity of society is a normal state, there is no industry competition and development without excess capacity.Overcapacity is not a disaster, but the power of the industry itself.The development of China's TFT-LCD industry must be scaled. "Gu Zhihua stressed.

In fact, large-scale development is one of the essential elements for the flat panel display industry to become bigger and stronger, and its scale efficiency is very prominent. Only by forming a modest scale can we enhance our ability to withstand risks and have certain bargaining power and overall competitiveness. With a certain scale, it is necessary to establish a competitive supply chain system, absorb the huge amount of technology development costs, and form a rich product line and sufficient technology retention. Only when the scale of the panel companies is large enough can it be possible to accelerate the localization of raw materials and equipment. Liang Xinqing told reporters: “At present, there is still a gap between China and the rest of the world. The biggest difference is that the size of mainland companies is still relatively small. In 2010, LGD, Samsung, AU Optronics and New Chi Mei (including Chi Mei and Innolux) ) The four major manufacturers collectively accounted for 80% of global panel shipments, while mainland manufacturers now account for only 4.7% of global shipments."

Of course, in the face of capacity and scale issues, Liang Xinqing believes that the Chinese industry must also keep a clear head and pay close attention to market changes. It is understood that by 2013, the global panel production capacity will increase by more than 50% from 2010, and the capacity expansion will focus on high-generation production lines with more than 8 generations. It can be predicted that in the next three years, the panel production capacity in mainland China will be released on a large scale, and the global production capacity ratio will increase from 3.2% in 2009 to around 17.6% in 2013. "According to demand forecasts, based on current capacity supply, the market supply gap will reach 59 million square meters by 2015. To convert into an 8.5-generation production line, we need to add about 13 new production lines. At present, there are already five production lines over 7 generations under construction. If continuous uncontrolled investment is added to the expansion line, the production capacity will oversupply after 2013. Therefore, we cannot use the current gap as the sole basis for investment decisions, and we must pay close attention to changes in the market, said Liang Xinqing.

Incomplete industrial chain leads to passive

Although China has become the largest market in the flat panel display industry and its production capacity and scale are gradually strengthening, in the global situation, it is still in a “passive response” role, rather than “actively attacking”. The reason is that the self-industrial chain, especially the upstream system, is the "deepest pain."

On the surface, the most important issue that restricts the development of China's flat panel display industry is the issue of efficiency. In fact, the imperfection of the industrial chain has led to the prominent problems in efficiency. The flat panel display industry is an industry with high input, high consumption, and rapid update. The upstream materials, components, and equipment cannot be self-sufficient, and the shortage of supporting industries and the lack of high-end talents have made profit space that can be mastered by independent flat-plate companies in China is not very intense. In the face of market competition, it is often difficult to obtain good economic benefits, thereby reducing the determination of more capital and talents to enter the tablet industry.

“The most constraining area for LCD panel companies in China is the localization of the upstream. There is data that Japan has reached 176% and Korea’s 82%. The matching rate is only 11%. We must give full play to the government's guidance and promotion role, make effective use of resources, and focus on development, and promote the improvement of localization support and the overall development of the industrial chain," said Wang Jiaheng, COO of BOE. From this we can see that perfecting the industrial chain is an urgent need for China’s flat panel display industry to be a force.

It is understood that during the “Eleventh Five-Year Plan” period, with the large-scale investment in liquid crystal panel production lines, China has achieved major breakthroughs in substrate glass, polarizers, TFT liquid crystal materials, and upstream film materials. In the low-end TN/STN LCD field, China’s completeness is better than that of TFT-LCD panel production. Key materials such as ITO conductive glass, liquid crystal material, and polarizers can all be supplied locally. In terms of equipment, Jing Chengqing Tat, Qixing Huachuang, and Taiyuan Second Institute have been able to provide related production equipment.

However, Gao Hongjin, a professor at Tsinghua's Liquid Crystal Technology Engineering Research Center, believes that although there have been numerous breakthroughs in China's LCD support during the “Eleventh Five-Year Plan” period, a complete supporting system has not yet been formed and the integration between upstream material manufacturers and panel manufacturers is still in progress. It needs to be further strengthened. For example, key construction equipment and related materials need to be imported. The materials provided by domestic manufacturers are rarely used and the relevant talents are still in short supply. During the “Twelfth Five-Year Plan” period, China’s LCD industry will have greater development. The demand for raw materials is unprecedentedly strong and it is a rare opportunity for upstream material manufacturers. The improvement of the upstream supporting industries also requires the support of government policies, the training of related organizations and the cooperation of upstream and downstream manufacturers.

Wang Tucheng, deputy director of the Rainbow Group Technology Center, also stated that the display industry with the liquid crystal display industry as its core chain and its upstream and downstream industry development alliances include research, development and industrial development of relevant materials and equipment, including production, research and development, and the establishment of industrial alliances to support each other. It is necessary to explore mechanisms for sharing with patented technologies and explore the strength and internationalization of Chinese industries from large to advanced.

For industrial cooperation and joint development, Pang Chunlin, deputy secretary-general of the China Electronics Industry Standardization Technical Association, proposed adopting a standard alliance or patent alliance to effectively organize the flat panel display industry in China and change the situation of loose and vicious competition in the past to standardize. Or build a pool of patents so that the various interests can be effectively bundled. On the basis of their own characteristics and in combination with national support, the standard system, patent system, public technology service platform, and testing and evaluation platform can be established in a consistent and complete manner. .