The test or opportunity of China's panel industry

Samsung and LG are shutting down all LCD panel factories in an all-round way. A lot of people think this is a big gift from the competitors to China's Panel Companies in 2020.           

However, there is no reason why the two powers of global dominance will voluntarily surrender. The "conspiracy" behind Samsung and LG's factory closure is the focus of the industry. Perhaps this is not an opportunity for China's continental panel, but rather another test.           

It's important to choose the right time            

At the end of January, Jeong Ho Young, CEO of LG display, a display panel manufacturer in South Korea, said LG display would stop domestic LCD TV panel production in South Korea at the end of this year due to the fall in LCD prices and global oversupply. ——LG's LCD panel has an 8.5 generation line only in Guangzhou, China, in addition to its Korean production line. This means LG is not far away from the LCD panel.           

Also at the end of January, Samsung display said it would shut down all its LCD panel production lines in South Korea and China by the end of this year. Samsung has completely abandoned LCD production. ——In addition to its LCD production lines in South Korea, Samsung also has one in Suzhou, China. Samsung is ready to close all these production lines.           

There is a reason behind the two heavy messages. "2018-2019 years, the supply of global LCD panels has entered the stage of supply oversupply with the expansion of China's BOE, TCL electronics and Huke, and the prices of products have been declining, and individual enterprises are facing losses". In particular, the 10.5/11 generation lines of BOE and csot have actually become "large-scale leaders" and have formed competitive advantages in the technology generation.            However, the choice of Samsung and LG is not only influenced by this long-term factor, but also by the "special situation" in January 2020: This is the impact of the new crown epidemic. By the end of January, the Chinese market had expected a sharp contraction in demand from January to February. At the same time, the risk of consumption growth in the global market is also rising. In March, when Samsung shut down the factory, the industry predicted that the global color TV market would shrink by more than 10% in the whole year.           

"Already surplus" and "unexpected contraction of demand": the superposition of two factors makes LCD panel enterprises face a greater profit crisis in 2020. Moreover, the capacity of China's mainland is still expanding. Therefore, from the perspective of Samsung and LG's operation, closing the LCD panel factory can be regarded as a measure to "reduce losses". Samsung / LG's substantial closure of LCD panel factory this year is not only the result of long-term industrial development, but also the grasp of special time nodes!           

Give up your share? No!           

"The capacity of Korean enterprises to increase the size of the LCD panels in mainland China in 2020 will be increased to more than 50%-60%." many of the industry's voices like this will greatly applaud the reduction of Samsung LG.           

However, in the face of this change, there are at least two questions to answer: first, in the near future, as the world's first and second largest color TV and commercial display brands, how to maintain the "LCD TV and LCD commercial display" industrial chain of Samsung and LG; second, as the world's largest panel company, will they really give up the "core manufacturing assets" of the modern display industry?            

The answer to the first question has come out! In mid April, it was reported that Samsung would "purchase LCD panels" from Panel Companies in Japan and Taiwan, such as sharp, group creation, etc.: I think this strategy can achieve two things with one stone. On the one hand, it solves the problem of panel demand of its own color TV sets, on the other hand, it supports the Japanese and Taiwan regions, especially the Taiwan panel enterprises.           

Under the crisis of global panel oversupply, Korean enterprises are "sad", but after all, they have "advantages of brand market" and can survive. However, for a long time, Taiwan's LCD panel industry chain has two ends outside, and its cost is less competitive than the lcd manufacturers in china mainland,  and its large size lags behind that of the mainland: assuming that Japan, South Korea, Taiwan and the mainland "kowtow to the LCD market" in four aspects, it is clear that the competitiveness of Taiwan is one of the "weakest". The Korean Department has shut down its production and allocated to Taiwan Department. Undoubtedly, it has created a rival of China's mainland camp in a completely declining pattern.           

Samsung's strategy is like this, LG probably won't be surprised. It's a good strategy to increase the purchase from Taiwan. Around 2008, when the global panel supply was insufficient, there was even a case that "the mainland color TV companies paid the advance payment for the panel orders and were intercepted by the Korean color TV companies". At the same time, domestic anti-monopoly agencies have also punished the case of joint price manipulation by Panel Companies in Japan, South Korea and Taiwan. Therefore, from a historical point of view, it is not impossible for Japan and South Korea to cooperate strategically in the context of the accelerated rise of panel enterprises in the mainland. (it's a little plot, isn't it!)           

The second question, Korea, which doesn't produce LCD panels, really gives up the core of modern display industry? The answer is no, of course. In this regard, we must realize that LG is the only large-scale OLED manufacturer in the world in the next generation oled-qled display, Samsung is the industry leader of small-scale OLED screen for 10 years, and currently has 80% share advantage!            "Give up LCD and turn to the next generation OLED and qled technology!" this is Samsung and LG's "yangmou" behind LCD production halt. "Seize the opportunity of global overhang and poor profit, seize the shrinking demand of the epidemic, even the bottom of 3 years, and seize most of the LCD line in mainland China.