Korean LCD Panel Makers Driven to Cliff Edge
Chinese LCD makers are stepping up their offensive. Chinese makers accounted for 33.9 percent of the global shipments of 60-inch or larger LCD TV panels in the first quarter of 2019, market researcher IHS Markit said on May 1. This means that they ramped up their market share nearly ten-folds from 3.6 percent in the first quarter of last year. In contrast, Korean panel makers' share in the same period fell from 54.8 percent to 45.1 percent. Chinese makers inflated shipments of large LCD panels 11.7-fold from 177,000 units to 2,242,000 units, and global LCD panel shipments also swelled 34.5 percent.
The growth of Chinese panel shipments was led by BOE, the world's largest LCD panel supplier. The production capacity of BOE’s 10.5th-generation plant B9 in China grew faster than expected. BOE began mass production at B9 in the first quarter of 2018. It increased its share of large-size LCD panels 29 percent in the first quarter. IHS Markit estimated B9's large-size LCD panel production in the first quarter of this year at up to 120,000 units. China's CSOT has also begun mass production of large LCD panels in the first quarter of this year and Foxconn and Sharp are planning to mass-produce LCD panels beginning in the second half of this year.
The technological gap between Korean and Chinese LCD panel makers in the LCD sector has drastically narrowed, undermining the profitability of Korean LCD panel makers. Samsung Display posted 560 billion won in operating loss in the first quarter of this year. In March, the company unusually released an estimate of its earnings. The quarterly loss was the first since the first quarter of 2016. LG Display also chalked up an operating loss of 133 billion won in the same period.
Although LG Display is hurrying to push up the portion of OLED panel sales, it is faced with some big burdens. LG Display will launch an OLED production line in Guangzhou, China in the first half of the year. By operating the OLED production line in Guangzhou, the company will scale up the portion of OLED panel sales, which is less than 20 percent at the moment to more than 30 percent. LG Display is also preparing to unveil a wide array of OLED portfolios in the second half of the year, including OLED displays for cars and transparent OLED displays.
Chinese companies are chasing Samsung Electronics in flexible OLED panels for smartphones where the Korean company once enjoyed a 97 percent market share. BOE's share in the market of flexible OLEDs for smartphones jumped to 9.4 percent in the first quarter of this year from only 0.1 percent in the first quarter of last year, market research firm Stone Partners said. As it is not easy to diversify corporate customers, who are smartphone makers, in a short period, Samsung Display is reportedly considering mass production of large QD-OLED panels.