After experiencing the most "cold" downward cycle in history, the global display panel industry began to "break the ice" turning point. Recently, many market research institutions actively predict that large panels will take the lead in rebounding from the second quarter. In 2023, after opening the cloud of "price rise and fall and shipment increase and decrease", the industry is more concerned about the question: Has the display panel begun to enter a new cycle? Can panel makers shake off the "cycle curse" and embrace a longer industry spring? "China Electronics News" reporter interviewed some industry insiders and found that since 2023, the development and competitive logic of the panel industry will change.
Cycle "reboot" or "reshape"?
"2022 is an important year for the global LCD panel industry. Samsung, as a giant in the electronics industry, has completely closed its LCD panel business, and LGD is also on the exit schedule. Panel prices have experienced the longest price reduction cycle in history, and manufacturers have experienced the largest production cuts in nearly a decade." Looking back on the past year, Dong Min, deputy secretary-general of the China Electronic Video Industry Association, expressed regret to the reporter of China Electronics News.
For the global semiconductor display industry, after the end of last year's "industry exam", they are eager to wait for the arrival of spring. Recently, Samsung showed that more than 10 domestic and foreign manufacturers such as LGD, Jingdong, TCL Technology, Vicina, Tianma, and Rainbow have announced their performance forecasts for 2022. Generally speaking, there are only cases of enterprises that buck the trend of growth, and other manufacturers basically have a decline in revenue or profit, nearly half of the enterprises are in a state of loss, of which the net loss of operating profit is the largest or even more than 10 billion yuan.
In stark contrast to the last round of "panel price increases." From June 2020 to July 2021, the longest price increase cycle of LCD panels lasted for 13 months, and its remarkable characteristics are "the longest cycle, the largest increase, the general increase of full size, and the obvious size differentiation." At that time, in the first half of 2021, BOE's revenue exceeded 100 billion yuan, and its net profit increased by more than 10 times. In the first half of 2021, TCL Huaxing's large-scale business net profit was 7.17 billion yuan, an increase of 1384.6%.
Every time the global display panel mode changes dramatically, we cannot avoid the problem of "panel cycle". The "cycle curse" is placed in front of all enterprises related to the display industry chain: how to rationally view the industry cycle, how to minimize its negative impact, and learn from the experience need to be faced by the whole industry.
Hu Chunming, executive deputy secretary general of the LCD Branch of the China Optical and Optoelectronic Industry Association, pointed out that since the display industry entered the semiconductor display technology, its high-tech attributes determined that the investment capacity into the effective supply time is getting longer and longer, and the demand change time of the display information age into the intelligent age is getting shorter and shorter, so the "cyclical" problem of the display industry has always existed. In this regard, Dong Min also stressed that the pursuit of long-term stable balance of resource industry products is unrealistic.
"In the long run, the risk of fluctuations in industry size and profitability caused by 'strong cyclicality' is gradually decreasing." Hu Chunming further analyzed that with the improvement of industrial transfer and market concentration, leading enterprises can further exert their influence and play a more important role in ensuring the balance of supply and demand, timely promoting technological progress, and improving price elasticity, especially enriching application scenarios, providing more possibilities for getting rid of the shackle of cyclical laws and pursuing deterministic growth.
"Next, the industry's stock production capacity is gradually withdrawn, and new production capacity is released, indicating that the panel industry is expected to gradually change from the past fixed large and strong cycle to a small and slow cycle of market competition and peak season demand, and the volatility will be significantly reduced." Dong Min said.
The competitive model of the industry has changed
From the internal volume of the same technology to the competition between different technical camps, the competition in the display panel industry is becoming more and more intense, as can be seen from the cost and price of products. From the perspective of the end product, a 65-inch 4K LCD TV on the market today is less than 3,000 yuan, but ten years ago, you can only buy 42-inch at the same price. From the manufacturing side, the manufacturing cost of a 65-inch 4KQD-OLED TV panel is about 1.5 times that of a W-OLED TV panel of the same specification.
Over the years, the global display panel industry model has been reshaped with the wave of panel cycles. Industrial focus shifted first from the United States to Japan, and then gradually from Japan to South Korea, and now we have a "China moment." However, for the high-tech and heavily invested display panel industry, after experiencing an era of large-scale rapid aggregation and expansion, how to stabilize this "baton" full of weight is the key.
After the wave, how do enterprises continue to develop, how to face the competition?
"After 2023, scale competition will no longer be the main mode of industrial competition, and the main mode of competition will be efficiency competition." Hu Chunming told reporters that with the further differentiation of technological layout, the regional competition model has been further reshaped, resulting in fundamental changes in the form of industrial competition. In his view, the future competition mainly focuses on the following two aspects.
The first is the competition of price and profit. Controlling the supply cost of upstream materials and equipment and improving the efficiency of capacity conversion is the key to winning the competition. At the same time, intellectual property disputes are usually interspersed in competition, as an important means of competition.
The second is the competition in the application market, especially the emerging application market. Stable prices and guaranteed profits are the necessary conditions for the emerging application market, and the sufficient conditions for the emerging application market are the competitiveness of the entire industrial chain and the level of technological innovation. After 2023, the fundamental problem facing China's industrial development is "imbalance" and "mismatch". With the changes of the external trade environment, the problems of "imbalance" and "mismatch" will also cause new changes.
In general, the industry is expected to continue to operate at a low level in the first half of 2023, and is expected to slowly rise in the second half of the year to achieve recovery. At present, there are signs to confirm: Recently, the industry news pointed out that TCL Huaxing, rainbow stock and other parts of the production line has been fully sold. In addition, according to a number of market research institutions, with the rebound in demand, LCDTV panel prices will gradually rise.
Hu Chunming pointed out that the difficulties of downstream demand contraction are short-term, which the industry can anticipate and eventually solve, because the demand fundamentals will not change fundamentally in the medium and long term, and the expansion of the average size can also hedge the contraction of demand. Although the risk of oversupply in the midstream of the industrial chain has been amplified in the short term, it will gradually ease in the medium and long term, but will not completely disappear. The basic risk of supply upstream of the chain is "declining elasticity", which means that the growth of the same demand may lead to higher material prices or even disruption of supply.
Go to the trough, meet the peak again. Each cycle of the display panel industry is not a simple repeat cycle, but the baptism of the industry. Only those enterprises that can extract real gold after the big waves can have more strength to go stable enough.
In 2023, the global display application market will be differentiated, affected by the fading of the epidemic dividend, the demand for consumer electronics will further shrink, only in developed economies and high-end product markets continue to maintain certain support, and the demand for emerging application markets such as business education will remain strong. The average size expansion will also help display equipment (panel) manufacturers to reduce the pressure on capacity growth to a certain extent. However, under the premise of a fundamental reversal of the supply and demand situation, the downward pressure on the global display industry in 2023 still exists.
In the new stage of changes in the logic of industrial competition, we can see that the mainstream display technology is still evolving iteratively, and the consumption experience is constantly improved through gradual innovation: the investment direction of flexible folding AMO LED technology will change from low generation to middle and high generation; W-OLED and QD-OLED production capacity continues to increase, challenging TFT-LCD in large applications such as TVS; Micro LED investment is gradually industrialized, and the cost is rapidly reduced...... Secondly, the development opportunities of the industry are still in the commercial and public scenarios of non-traditional consumption, as well as the application of innovative scenarios such as automobiles and virtual reality, as well as the structural upgrade of the LCD panel products themselves.
"China has become the largest production base for LCD panels to ensure that the trap of display technology is avoided. While extending the life cycle of LCD products, the synchronous promotion, inkjet printing, quantum dot display, silicon-based OLED, naked eye 3D, laser display, electronic paper and other display technologies, including Micro LED, have achieved large-scale production. Do the overall layout of the next generation of display technology from the top." Dong Min stressed.
From the perspective of the entire industry, we must first collectively adjust the allocation of resources, accelerate the development of new scenarios and new application products, and deal with the growth bottleneck and prosperity cycle of traditional consumption scenarios. Secondly, the construction, expansion and release of production capacity should follow market principles.
From the perspective of the enterprise, the panel factory should first improve the customer structure, product structure and production line structure to improve production flexibility and market flexibility. Secondly, select and layout the core upstream and downstream links of the industrial chain according to the competitive environment, change the attributes of the main business products, and adjust the smile curve of the profit distribution of the manufacturing industry.
