Can China Break Korean’s AMOLED Grasp?
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After BOE Technology’s new project in Erdos， Shenzhen-based Tianma Group also set up a 5.5thgeneration amoled production line. This further drew the attention of the outsiders to China’s efforts in the next generation of display technologies.
AMOLED， short for Active Matrix/Organic Light Emitting Diode， is considered to be the next-generation display technology with its spontaneous light emitting， brilliant colors and flexibility. In recent years， an investment fever into AMOLED rose in China alon with the maturation of market and technologies.
However， when 90% of the global AMOLED market is under the control of Samsung， what can Chinese do to break away from the grasp？ This is a worthy question.
The Investment Fever
Presently， the TFT-LCD still stands for the mainstream display technologies in the world. The AMOLED is not matured enough when it comes to the big display screens. However， in recent years， the popularity of Samsung’s Galaxy smartphones in the world gradually made AMOLED accepted by the market of small- and medium-sized display screens.
Years ago， Chinese companies like Visionox， Rainbow and CCOLED tried to seek breakthroughs in the AMOLED technologies in vain. But in the recent investment fever， it seems that positive results are very close. According to the data from Sigmaintell Consulting， there are three 5.5th-generation AMOLED production lines and two 4.5th-generation AMOLED lines， all of which target the small- and medium-sized display screens.
The Erdos project costs BOE Technology 22 billion yuan and is said to realize the mass production in this year. The data from Sigmaintell Consulting said that this plant could produce 54 thousand LTPS LED panels and 18 thousand AMOLED panels every month. Zhang Yu， vice president of BOE Technology， said that the LTPS panels will be put into mass production at first and the AMOLED is going to see that in this year as well.
Tianma Group is not skimpy in that matter either. The registered capital of its AMOLED project in Shanghai was increased to 1 billion yuan. Liu Changqing， secretary to board chairman of Tianma Group， said that the matured market， consummate technological reserve and improved corporate business are the reasons to initiate the 5.5th-generation AMOLED production line at this moment. The construction period would usually last 18 months. ZTE， Huawei， Coolpad and Lenovo would be the main clients.
In addition to BOE Technology， Truly International Holdings （Truly） also announced last December the investment of 6.3 billion yuan into a 4.5th-generation AMOLED production line in Huizhou， Guangdong. A source said that Truly planned to expand this production line if the initial project go well， and the expansion is likely to consist of a 5.5th-generation AMOLED production line.
Moreover， OurLCD is building a 5.5th-generation AMOLED line in Kunshan and Shanghai Ever Display is also working on a 4.5th-generation AMOLED line in Shanghai， with the follow-up investment right on their heels. Shenzhen Textiles also announced on the evening of March 10 that they had changed the purpose of raised funds to combine the construction of a TFT-LCD and AMOLED production lines.
Wu Rongbing， a researcher with Display Search， said that the application of AMOLED technologies is quite matured in the present time. The popularity of high-end smartphones， tablets and wearable technologies form the important background of the new AMOLED investment fever.
Is the Stride Too Big？
The domestic AMOLED production seems to be quite promising， but the fast expanding market actually hides a lot of risks.
Only half of the production capacity of AMOLED production can be used， said Zhang Bing， Research Director of Display Search in china. Last year， the production capacity of AMOLED panel was 3.3 million square meters per quarter while the demand only reaches 1.5 million square meters. This year， the quarterly output is 4.6 million square meters while the demand is only increased to 2.4 square meters. The situation won’t be better in the next year whose supply-demand ration was slightly lower than 2：1.
Now， Samsung takes 90% of the supply of AMOLED panels in the world. Most of them are consumed by Samsung itself with only a small part sold out. Nokia and HTC used to be clients of Samsung but by now the chain has been broken. Therefore， Zhang Xingang， editor-in-chief of China Display Network， thought that this was a“supply-driven market” and technological level determines the acceptability of products in the market.
Li Yan， research director of Sigmaintell Consulting， believed the mass production of AMOLED screens in China was going to end the monopoly of Samsung in the world. However， Chinese companies are two years later than the Korean company in this matter and are apparently behind Samsung in upstream supporting facilities and experiences in mass production. “The facilities of Samsung’s AMOLED are most tailored for certain products and the engineers are very experienced.”
Zhang Bing also admitted that the production of AMOLED panels needs the procedures of LTPS panel and OLED panels. Thus it is very difficult and easy to result in the bad quality， low production utilization rate and high cost. Samsung has been the champion in the small- and medium-sized AMOLED panels for years， which helped to form the brand effect. Chinese companies， as the newcomers， have not proven to be reliable in the technology， and may face unfavorable demand in the market.
The status quo of big AMOLED panels might be a solid proof. According to Zhang Bing， only LG is producing big AMOLED panels. But the unqualified products come out more often than ordinary LED panels， and the cost is unbearable. A 55-inch OLED TV is sold at US$8，999 while a 4K LED TV is worth only US$1，000 in the market. The eight-fold price gap renders the sales of OLED TVs dearly poor.
In order to lower the risk， most of the AMOLED production lines in Chi- na also accomodate the production of LTPS panels. In Zhang Bing’s opinion， the LTPS panels could easily reach 400 PPI in the resolution， enough for the requirements of high-end smartphone screens.
Li Yaqin also admitted that the AMOLED production was just started in China. BOE Technology’s AMOLED production line in Erdos could produce 18 thousand AMOLED panels per month， accounting one tenth of the production capacity 160 thousand per month of each of the two 5.5thgeneration production lined Samsung has. “Without the technologies of mass production， Chinese companies are likely to produce the LTPS in a large scale at first and then move to the AMOLED panels. This is a realistic choice.”
In the global panel industry， South Korea， mainland China， Japan and Taiwan are the hosts of major suppliers. According to Li Yaqin， since Taiwan has no 5.5th-generation AMOLED production lines for the mass production and most of the LTPS panel production lines are outdated， they will no longer meet the demand of high-end smartphones. Sharp from Japan does have AMOLED projects but acts very cautiously in the investment. Sony and Panasonic also stopped their combined project of AMOLED.
T herefore， even though mainland China still has a long way to catch up with South Korea， it is very possible to surpass Taiwan and Japan in the next few years.
However， Wu Rongbing warned that “it is too early to talk about the competitiveness of mainland China since the AMOLED panels have not seen mass production by now”. Zhang Yu also admitted that less than a half of the raw materials for the production of AMOLED panels in China were from local suppliers.
For Zhang Bing， to have AMOLED industry in China develop well needs more than breakthroughs in raw materials， facilities， talents and technologies.“We need the progress in the big-sized display screens，” he said. “Only the innovation that others have not achieved could help to prosper that industry.”