Top-tier Chinese Companies Invest in High-generation LCD Panel Fabs

While key display panel manufacturers, particularly from South Korea, focus on OLED technology, Chinese companies have been ramping up efforts for LCD panels, building high-generation fabs in recent years.

BOE has four 8.5G lines in Beijing, Hefei, Chongqing and Fuqing, with a collective monthly capacity of 39,000 units. Others with similar facilities include CSOT, CEC, Caihong, SDP and HKC, with BOE, CSOT and SDP investing in 10.5G and 11G fabs as well. CSOT spent $13.14 billion on the installation of two 11G lines in its Shenzhen factory, which have a total output of 18,000 panels every month.

While OLED technology is increasingly used in small and midsize displays and Micro LED in the large-size segment, LCD panels continue to enjoy healthy market demand. It benefits from existing applications in TVs, laptops and monitors. “The market is being driven by various factors such as the increasing demand for smart homes, the growth of the gaming industry, and the rising need for energy-efficient displays,” as summarized by MarketWatch from Reliable Research Reports’ latest report on the LCD panel market.

Another market impetus is lower freight fees, which will help reduce prices of large-screen TVs and raise demand for them and also for large LCD panels, according to TrendForce. The market research firm is predicting that the average size of LCD TV panels will likely increase to almost 50in.

TrendForce’s projection for Chinese LCD panel manufacturers, meanwhile, is a collective market share of 70.4 percent in 2023 and that BOE, CSOT and HKC will keep their first, second and third global standing based on shipments.

China’s total capacity for LCD panels is forecast to reach 286.33 million square meters in 2025, according to the China Electronic Materials Industry Association. This is a CAGR of 8.73 percent over 2021’s 204.89 million square meters. In addition to TVs and laptops, smartphones, tablet PCs and automotive applications will drive demand growth.

Faced with such aggressive competition and the need to cut costs, LG Display halted LCD TV panel fabrication in its factory in South Korea in December 2022, as reported by Reuters. In the following month, it scaled down LCD TV panel production to 50 percent of capacity in its China facility.

Global players in China

In addition to LG Display, big industry players such as Samsung, AUO, Innolux and Sharp are part of China’s production pool for LCD panels. Together with homegrown companies, they own the majority share of the market in the country, with the rest divided among small and midsize Chinese enterprises.

Over half of this manufacturing force is found in the coastal areas, specifically in Shenzhen, Dongguan, Zhongshan, Guangzhou and Xiamen. The rest of the suppliers are spread over Suzhou, Changzhou, Ningbo and Dalian.

In spite of the intense competition in the LCD panel category, new investment from domestic and overseas companies is expected to come in and see the building of more high-generation fabs. This will possibly lead to industry consolidation in the next one or two years and result in the departure of small enterprises.

China-made LCD panels

China-based suppliers of LCD panels offer TN, STN and TFT types, with the last accounting for over half of shipments.

These display components come in small, medium and large sizes for smartphones, notebook and tablet computers, and automotive, medical and industrial applications.

By resolution, the options are 128x64 pixels, 480x272 pixels, 640x800 pixels, 800x480 pixels, 1024x768 pixels, 1280x1024 pixels, 1440x900 pixels, 1600x900 pixels and 1980x1020 pixels.

Mainstream LCD panels have an aspect ratio of 16:9 and a contrast ratio of 300:1, 350:1, 500:1 or 1,000:1.

a-Si is the technology adopted in most TFT LCDs, while LTPS is expected to gain traction in China in the coming years.

Key components used in the production of LCD panels include polarizers, color filters, liquid crystals, substrates and driver ICs. They are sourced from domestic or foreign providers, depending on buyers’ preferences.

Component costs decreased slightly in the past 12 months. This and an oversupply of panels led to a product price reduction. The situation, however, is expected to normalize in the months ahead. Nevertheless, it’s still possible that some suppliers will continue to lower their quotes due to intense competition.

The products in this gallery have been handpicked by our China-based market analyst for representing current trends in LCD panels from Chinese makers.