LCD panel makers emphasize over-40in, UHD units for TVs

Major China companies invest in higher-generation plants, some of which will begin mass production this year.

China's LCD panel industry remains in overdrive, with 8.5G fabrication plants to commence operations in the months ahead and boost output for larger than 40in and UHD units for TVs. Tier 1 suppliers, which are fewer than 10 at present, are at the helm, while the majority in the display sector continues to focus on small and midsize TFT-LCD modules. This is due to the venture's steep technology and investment requirements. The latter group targets portable electronics, home appliances, office automation, security and industrial applications.

BOE is scheduled to initiate mass manufacture in 2Q15 at its third 8.5G line, which is in Chongqing municipality. The company has been running two similar facilities in Beijing and Hefei, Anhui province. ChinaStar's 8.5G plant will open this year as well.

In terms of shipments across panel sizes, the former supplier will raise its volume to 20 million units in 2015 from 16.1 million the previous year, and the second to 26 million units from 24.3 million. CEC-Panda is bolstering its level from 3.1 million units to 5 million. China's total rose 11 percent in November 2014 from October and by as much as 22 percent in December, according to DisplaySearch.

Fueling this development is the climbing demand for large-screen TVs. As such, LCD panels for 50in and above units will make up 21 percent of global deliveries by year's end based on projections by DisplaySearch. This is a further improvement from respective shares in 2013 and 2014, which are 12 and 18 percent.

Besides size, domestic companies will continue to pursue the UHD trend. BOE has introduced 110in UHD LCD panels and 98in 8Kx4K versions, which deliver 1,000cd/sqm brightness and 1.07 billion colors. Panels with 4Kx2K resolution are anticipated to surpass half of China's shipments for the TV segment.

Providing additional spur for these initiatives is the China TV market. Last year, nearly 73 percent of surveyed consumers there prefer 40 to 59in units, according to FPDisplay. Of these, 55in models garnered an 18 percent share, followed by 50in with 14 percent and 42in with almost 13 percent. As for UHD TVs, more than 6 million units were sold in China, according to Sina News.

The LCD panel sector continues to benefit from the accelerated localization of materials, helping makers lower costs and boost overall competitiveness. Tungshu invested $819 million in glass substrate manufacture in 2014, and allocated $1.3 billion in color filters early this year. Other key components LED backlights and polarizers can be sourced from domestic companies.

At present, most China suppliers operate 5.5 and 8G lines, covering 32 to 65in and above panels. Theyoffer up to 3820x2160 and 4096x2160-pixel varieties. Some makers also have 3D types.

LCD panel prices dropped 5 percent in the past year. Most companies forecast a similar trend until end-2015.

Elite supplier pool

ChinaStar, BOE and CEC-Panda are among the top eight LCD TV panel suppliers in China based on projected shipments of 26 million, 20 million and 5 million units in 2015. They rank fifth, sixth and eighth with industry players maintaining factories there. CEC-Panda shares the last position with Panasonic. Skyworth is also a major local maker. The company and CEC-Panda offer TVs as well.

The international companies dominating the lineup are Samsung, LG Display, Innolux, AUO and Sharp, with 56.9 million, 53.5 million, 49 million, 28.5 million and 13.4 million units in deliveries.

Local makers allot between 20 and 80 percent of shipments to export markets. The main destinations are the Asia-Pacific region, South Korea and Japan. Manufacturers anticipate outbound volume will be higher by 10 percent in coming months.

Preparing for OLED

Owing to high cost, OLED TV panels will take two or three more years to ascend to the mainstream. So far, only a few TV makers have introduced such models. LG has 55 and 65in kinds. Among China companies, there are Skyworth and Konka. The latter launched 55 and 65in units in 2014. Its 65in UHD OLED TVs with a curved screen have 1 million:1 contrast ratio and 0.001ms response time. They are 5.4mm in thickness and at 19.5kg weigh 25 percent lighter than LCD counterparts.

Even so, a number of LCD TV panel companies in China are now turning out such types. BOE has 5.5G AMOLED lines in Ordos city.

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