After a successful ramp-up of the first Gen 10.5 factory, one of China’s biggest display panel manufacturers, BOE, will surpass South Korea’s LG Display to become the world’s largest panel supplier in 2019. In addition to BOE, China Star Optoelectronics Technology (CSOT) is also eager to join the largest LCD fab race, and is beginning to ramp up another Gen 10.5 factory this year. The production capacity of both BOE and CSOT solidify China’s position to be the world’s top display manufacturing region.
Previously, Samsung Display and LG Display have dominated the videowall panel market for many years. However, with the number of China panel manufacturers on the rise, brands such as BOE and CSOT are challenging the Korean leaders for dominance. The China region is not only targeting to lead in sheer volume for display production, but also aims to become a catalyst for technology leadership in coming years. One example of these technology advancements pertains to videowall panel production, since it is regarded as one of the high-end applications requiring cutting-edge expertise and precision.
Within the panel industry, the evolution of videowalls to achieve the narrowest bezel-to-bezel (active-to-active) depth measurement for near-seamless bezel gaps between two LCD panel modules is the main objective of any panel manufacturer. Last year, LG Display launched and shipped its first videowall panel with bezel-to-bezel width below 1mm, while Samsung Display still struggles with mass production this year. As more Chinese panel manufacturers join the fierce competition, BOE aims to directly challenge LG Display and Samsung Display.
By 2017, Korean panel makers accounted for 95% of global panel shipments, while Chinese panel makers were nonexistent. However, BOE began shipping their first videowall panels in Q1 2018, with CSOT following shortly after in Q1 2019. Both BOE and CSOT are planning to notably increase their videowall shipments by the end of 2019, and IHS Markit expects 25.4% of global videowall panel shipments in 2019 to come from China. Indeed, Korean and Taiwanese panel makers are facing challenges trying to compete with the overwhelming capacity advantage that China now possesses, and are rearranging their business strategies to concentrate on unique and higher-end applications.
Moreover, China is the biggest consumption market for videowall panels, accounting for nearly 71% of global videowall panels in 2019. In past years, both Samsung Display and LG Display shipped considerably more volume into China than to their captive clients - Samsung VD and LGE. Therefore, as BOE and CSOT are stabilizing their videowall panel technology, as well as quality production, IHS Markit expects these Chinese panel makers to rapidly increase their share in the China market against their Korean counterparts.
These Chinese panel makers benefit from better cost structure, larger capacity, and a stronger relationship with Chinese governments. Many local Chinese clients also prefer to source their panels from domestic companies, probably in favor of wide-ranging central government policy support with regional government financial assistance. In addition, the Chinese government has gradually ramped up monetary stimulus to support national economic growth, supporting expansion for B2B market growth.
IHS Markit expects the China videowall panel shipments to grow 26% YoY in 2019, although the global LCD panel market is facing difficulties this year due to a slowdown in the domestic consumer TV market and uncertainties regarding the US-China tariff issue. Based on IHS Markit’s latest iteration of the Public Display Market Tracker, we expect China’s videowall shipments to demonstrate an increase of 20% YoY in 2019, with global videowall shipments anticipated to grow 16% YoY respectively.