Samsung will stop producing LCD panels in China and South Korea, LCD panels enter the "Chinese era"

According to foreign media reports, a spokesman for South Korean display panel maker Samsung Display said today that the company has decided to end production of all LCD panels in South Korea and China by the end of this year.

Samsung Display said in October last year that it had suspended one of its two LCD panel production lines in South Korea due to oversupply due to declining market demand for LCD panels. Samsung Display is a subsidiary of South Korean technology giant Samsung Electronics.

The display panel maker said in a statement released today that "by the end of this year, we will still provide customers with production of LCD orders without any problems."

In October last year, Samsung Display, a supplier to Apple Inc., stated that it would invest 13.1 trillion won (approximately $ 10.72 billion) in equipment and research and development to upgrade production lines. At the time, the company believed that there was an oversupply of panels due to weak global demand for smartphones and TVs.

The company's investment focus for the next five years will transform one of its LCD panel display production lines in South Korea into a factory capable of mass producing more advanced "quantum dot" screens.

As of now, the company has two LCD panel production lines in its South Korean factory, and two factories in China specializing in LCD panels.

LCD panel will enter the "Chinese era"

Earlier this year, Samsung Display's competitor LG Display stated that it will stop producing LCD TV panels in South Korea by the end of 2020.

In contrast, the market share of Chinese companies such as BOE, CLP Panda, and Huaxing Electronics has increased faster than three years ago. Among them, BOE surpassed LG Display for the first time with a market share of 18.9%. Became the world's largest LCD panel supplier.

At present, LCD panels have entered the stage of market saturation. Although Korean companies have certain cost control capabilities, due to the closed nature of the supply chain, their costs are difficult to be further compressed, so they are in the background of infinite competition in the market. Next, Korean companies produce panels at "near-loss" prices. Even so, it is difficult to completely resist the offensive of competing companies.

It is very obvious that the technical threshold of LCD panels has been greatly reduced, and the desire of Korean companies to maintain the threshold is almost impossible. "Li Xianyu also mentioned that in recent years, China ’s investment in technology and production, and China ’s The continuous progress of domestic appliances to the countryside has also led to emerging companies such as Rainbow Optoelectronics and Huike gradually occupying market share.

According to the forecast of the Korean Society of Semiconductors and Displays, by 2023, Chinese companies will have a market share of 58% in the global panel market, of which LCD panels will enter the "Chinese era", and it is predicted that China will continue to do so by 2022. Established 19 large-scale panel plants with 8 ~ 10.5 generation lines. After China established an 8.5 ~ 10.5-generation panel factory, the production cost of the product is only 1/3 ~ 1/5 of that of Korean plants. In addition, it is the largest use of LCD With changes in consumer habits, sales of the color TV industry have declined, and some major manufacturers of color TVs have begun to transform, casting a shadow over the future of LCD panels.

In response to an email from the First Financial Reporter, Park Jae-Kin, president of the Korean Society of Semiconductors and Displays, said that at present Korean companies are having a hard time relying on LCDs to make money. Companies can only rescue themselves by breaking through the high-end panel market.