Samsung launches two LCD production lines to accelerate the exit of panel production capacity industry cycle is expected to weaken

Recently, Samsung showed that (SDC) officially opened its two second-hand production lines in Yashan Park: G7.5 and G8.5, with a production capacity of 30K and 100K, respectively, according to information from the upstream and downstream of the industrial chain, according to Lotu Technology, a technology industry research institute.

According to the relevant information, Samsung shows that the sales should be L7-2 and L8-2-1. In Samsung's large-size LCD production line layout, L7-1 has been closed in 2012, while L7-2 has not invested in glass substrates since March this year; in the 8.5-generation line, L8-1 has been closed earlier, and L8-2 has not been high recently, maintaining around 60K per month.

In terms of product structure, the two production lines are mainly large-size LCD TV panels and display panels. Among them, the panel size of L7-2 production line covers 20-82 inches, and the panel size of L8-2-1 covers 23.6 inches-55 inches, and the two production lines support panel production with the highest 8KQUHD resolution.

According to the bidding documents of Samsung products, this sale does not involve display technology patents, the production line only retains the original data, and can provide ancillary equipment including pumps, coolants and so on.

In addition, the transaction is fully represented by Samsung (SCT), and the application for purchase will close in late May, and the first round of quotations will close in mid-June, using all-inclusive prices (Turn-Key Price). The buyer can pay in installments, but 100%T/T is required to pay in full before the equipment is delivered.

Horse, an analyst at Loto Technology, believes that Samsung is facing an awkward situation. On the one hand, it needs to concentrate resources to speed up the production of QDOLED prototypes. The schedule is to provide prototypes to VD, Sony and others in June and to achieve mass production by the end of the year after completing the market evaluation in September. This needs to reduce and give up the investment in LCD LCD panel technology. On the other hand, Samsung shows that it also needs to grasp the short period of the panel to ensure the supply of high-end LCD TV panels it needs.

Korean factories accelerate their withdrawal from LCD and concentrate their market share to the domestic leader.

Since mid-2020, the demand side of the large-size LCD panel industry as a whole has benefited from the epidemic housing economy ushered in a deep V reversal.

According to the latest quotation survey released by panel professional research agency WitsView on May 5, the prices of the three major application panels for TV, laptop and display continued to rise in early May, reaching a touchdown for 12 months, setting a record of "rising for a whole year in a row." it is expected that prices will continue to rise in June.

Huatai Securities analyst Hu Jian team believes that in the context of the improvement of the long-term supply and demand pattern brought about by the withdrawal of South Korean manufacturers, considering the out-of-stock market that drives IC throughout the year, LCD out-of-stock price increases are expected to continue to be interpreted, while the Chinese mainland LCD industry from scratch, from have to large, from big to strong, has now achieved global leadership, with the industry periodically weakening, leading manufacturers have officially entered the harvest period.

DIGITIMES predicts that the production capacity of large-sized LCD panels in mainland China will account for 68.2% of the world in 2021.

Compared with the rapid development of domestic panel manufacturers in the LCD production line, Korean manufacturers who monopolized the market in the past began to aim at high-end panels, such as OLED, QLED, microLED and QD-OLED. Samsung and LGDisplay have said that they will reduce the production of LCD panels and will release orders for LCD display panels to Chinese enterprises in the future.

According to Omdia data, South Korea's local old LCD capacity still accounts for 16% of the total large-size panels, and Xu Xingjun, an analyst with Guangfa Securities, said it was only a matter of time before this part of the capacity was withdrawn. In terms of new production capacity, there are almost no investment plans for new production lines in the industry. According to the existing plans, the proportion of new production capacity in the industry in the future is only about 15%. Taking into account the withdrawal of Korean factories and the limited new capacity, the future growth rate of large-size panel capacity will remain below 3%, and the overall industry supply and demand pattern will continue to improve.

In addition, in the field of high-generation LCD panels, industry concentration ushered in a rapid increase. In 2020, more than one high-generation production line began to be integrated by leading manufacturers. After TCL Huaxing's acquisition of Samsung's Suzhou G8.5 production line and BOE's acquisition of CLP's Nanjing G8.5 and Chengdu G8.6 production lines were completed, considering the withdrawal of Korean factory capacity, the share of the two leading manufacturers, Jingdong and TCL, will rise to more than 50%.