Long-term Plan
It is being predicted that China will become the world leader in LCD panels in 2018 by beating Korea, as the nation began to make massive investments in LCD panels used in smartphones and flat TVs. Japan’s Nippon Keizai Newspaper reported that China’s four leading display companies, such as the BOE Technology Group, will build seven big factories in China with investments of about US$25 billion for three years.
According to the newspaper, the investment volume is very large compared to the fact that Samsung Electronics invests US$3.5 to 4 billion in the LCD business a year. Chinese companies with strong financial support from the Chinese government will lift China over Taiwan in 2017 and Korea in 2018 in terms of the volume of LCD panel production, the newspaper expected.
It is said that despite an economic slowdown, China began such massive investments as it intends to escape from the market structure where China depends on Korea and Taiwan for 70 percent of its demand for LCD panels.
It is expected that this move by China will give Korean companies two troubles – a drop in exports to China and a price war triggered by an increase in LCD panel supplies by China.
In details, BOE is planning to build three factories in Hefei, Puju, and Chengdu in China with the goal of beginning to run them in 2017 or 2018. In particular, Hefei will be home to a state-of-the-art factory that will be able to produce the world’s largest glass boards. The new factories will empower BOE to vary its products such as screens for smartphones and TVs, and even screens for car dashboards.
Besides, Tianma has drawn up a plan to build factories to produce small and mid-sized high definition panels in Xiamen and Wuhan. CSOT and CEC Panda, affiliates of the TCL Group, will begin to lift their production volumes too. The world display market was led by Japanese companies until the 1990s. But Korean companies took control of the world market in the 2000s, and are now leading the market.
Chinese companies with technological power began full-scale investing in facilities while showing signs of beginning a price war. Thus, the forerunners of Korea, Taiwan, and Japan will have no choice but to revise their strategies, according to the paper.