China's BOE on Heels of Samsung Display
China's display panel maker BOE reportedly improved its yield in the small and medium-sized organic light-emitting diode (OLED) segment to the 30 percent range in the fourth quarter of 2018. Considering that the company’s yield was at around 10 percent in the third quarter of 2018, it achieved a huge improvement in just one quarter. Some industry watchers forecast that the company would be able to lower its production cost below that of Samsung Display, which is the number one player in this sector, at the end of this year. Korean display companies are keeping a close eye on BOE's chase, even though they suspect that the Chinese maker’s yield may have been inflated.
BOE's small and medium-sized OLED panel shipments exceeded 1 million units per month in the fourth quarter of 2018, according to a recent report by display market researcher DSCC. Its shipments in the third quarter were 125,000 units. BOE was able to increase its OLED panel shipments nearly 10-fold in one quarter thanks to a jump in its yield. BOE’s yield is projected to surpass 40 percent in the first quarter of this year and 50 percent in the third quarter of this year.
BOE is closely trailing Samsung Display. It has announced massive investment in the small and medium-sized OLED sector. BOE is currently producing panels at B7 Factory in Chengdu, China. B11 Factory in Mianyang will go into operation in the first half of this year and B12 Factory in Chongqing from around 2021. Recently, the company decided to build its fourth OLED factory, B15, in Fuzhou and started to invest in the project.
Korean display makers are closely monitoring developments in the display industry with skepticism about the reports on BOE’s rapid yield improvement. "We have to take into account the fact that some Chinese companies supply low-quality products at low prices," a display industry official said.
Yet another industry watcher said, "There is evidence that BOE has sharply improved its yield. A company other than BOE was set to supply more OLED panels than BOE to Huawei for production of the Mate 20 Pro. But in the long run, BOE supplied more panels. This hints that BOE came through with a high yield."
One analyst forecast that BOE would be able to make its production cost lower than that of Samsung Display at the end of this year, as the Chinese government is providing substantial subsidies for investment in small and medium-sized OLED panels.
BOE is currently supplying small and mid-sized OLED displays mainly to Chinese companies. The bulk of BOE’s shipments in 2018 were supplied to Huawei for its strategic smartphone Mate 20 Pro.