On September 10 and 11, 2013, FPD International China
2013/Beijing Summit was held at Liaoning International Hotel in
Beijing to promote “Cooperation, Innovation and Development”. The
forum this year, themed “Industry Chain Competitiveness and
Industrial Upgrading”, brought together representatives of many
well-known FPD compa-nies in China and other countries including
equipment and material manufacturers, as well as prestigious
research institutes, experts and scholars. The delegates were
expected to share their insights about the trends in the global FPD industry and the development of the Chinese FPD industry as well as the latest information about mana-gement and technology across the world so as to help the Chinese FPD industry grow better. Below is the speech made by Professor Ouyang Zhongcan from the Institute of Theoretical Physics, Chinese Academy of Sciences (CAS).
Ouyang Zhongcan: Distinguished guests and delegates, good afternoon! I’m here not to deliver a technical report but to talk about the development of China’s LCD ind-ustry over the past decade. Some of you from the financial and management sectors are quite interested in the development of the industry. Some delegates talked about
the lessons from the industry at other sessions, giving people the impression that the industry is not developing very well. I’m going to share with you my views on this
issue and give technology enterprises some confidence.
I will talk about the development of the industry in the past decade and then share personal opinions about its future. As you know, the National Academy of Engineering (NAE) awarded the Charles Stark Draper Prize, which is known as the “Nobel Prize of Engineering”, to George H. Heilmeier, Wolfgang Helfrich, Martin Schadt and T. Peter Brody last year. In February this year, NAE announced the Draper Prize recipients: five old men behind the invention of cellular telephone including three Americans, one Norwegian, and one Japanese. The two prizes are the greatest recognition the scientific community has given to the display industry. As we all know, displays have played a big part in driving the fast growth of mobile phones. Pagers and cellular phones were very hard to popularize several years ago but now almost everybody has an iPhon-e so the important role of displays have been recognized by the scientific community in the last two years. That’s why I believe that we are now in the booming period of
displays. This is my mentor in Germany. He made a speech on behalf the prize recipient in February last year. According to him, LCD was invented by a company called
RCA. Back then, the company was worried that LCD might not be profitable or even threaten their conventional business. Anyway, now LCD is everywhere in our life. It
also explains why America missed the opportunity. Wolfgang Helfrich put forward the idea of dynamic display and liquid crystal effect in America but the company didn’t
accept it so he went back to Europe and invented LCD in 1971. Now we use LCD a lot and it’s very good.
The Americans didn’t use LCD. Then how did Japan develop it? Two names should be mentioned here. In 1968, RCA announced the launch of LCD. In 1973, the inventor of tunnel diode Leo Esaki won the Nobel Prize in Physics. The spread of LCD in Asia from Japan to South Korea and Taiwan should be attributed to them. In Japan, I read a book about the 50 years of LCD. The flat-panel display (FPD) was developed Japanese enterprises in the 1990s. Great strides have been made since then and CRT has been replaced by liquid crystal. The display industry in the Chinese mainland has developed a lot in the past decade, compared with Japan, South Korea, and Taiwan
which started early in this regard. Since the policy of reform and opening up was introduced, the Chinese government has gained a deeper understanding of the informati-on industry and thus provided strong policy support to its development. Therefore, the development of the industry in the past decade should be first attributed to the guida-nce of the government. In 2007, the FPD industry was included in China’s 11th Five-Year Plan. In 2008, China issued the Policies on Promoting the Industrial Application
of Independent Innovations. In 2010, China assessed five high-generation panel plants and increased the import tariff on LCD panels, which directly drove the growth in
demand for domestic panels.
There are many milestones in the development of the FPD industry in the past decade. In 2003, BOE acquired Hyundai and began building its Gen 5.5 production line.
In 2004, SVA and IVO started to build their Gen 5 TFT-LCD production lines.In 2005, BOE’s Gen 5.5 production line was put into full operation. In 2008,Visionox completed a pilot-scale PMOLED production line in Kunshan, the first of its kind in the Chinese mainland. That made the mass production of small OLED displays a reality. In 2009,
BOE started to build its Gen 6 line in Hefei, established the National Laboratory for TFT-LCD Technology with the support of NDRC and began the construction of its Gen
8.5 line in April, and started to build its G7.5 line in Kunshan, Jiangsu Province in September. In 2010, CSOT invested RMB 24.5 billion to build its first Gen 8.5 TFT-LCD
line; Samsung and LG’s high-generation LCD panel projects were approved by the governments of Guangzhou and Suzhou respectively in November. In 2011,
CEC-Panda’s Gen 6 line was put into full operation and BOE started to build its Gen 5.5 AMOLED line in Ordos. In 2012, the Chinese government increased the import
tariff on LCD panels; Samsung began the construction of its Gen 7.5 line in Suzhou in April; and LG started to build its Gen 8.5 line in Guangzhou in May. In 2013, Chinese FPD makers have started to make profits. Take BOE as an example. In the first half of the year, its revenue and net profits registered RMB 16.25 billion and RMB 860
The capacity of Chinese mainland FPD makers rose from 82,200m2 in 2003 to more than 20 million m2 in 2012, contributing to 13% of the world’s total. It means that the
Chinese mainland overtook Japan for the first time in terms of capacity. The mainland’s capacity has reached 29.06 million m2 and will continue to grow. It may catch up
with Taiwan in 2015. Currently, FPD capacity is 27 million m2 in the Chinese mainland, 67 million m2 in Taiwan, 90 million m2 in South Korea, and 17 million m2 in Japan. We can see how much the FPD industry has developed in the mainland. Four production centers have been formed in the Bohai Sea region, Yangtze River Delta region,
Pearl River Delta region, and central and western parts of China. In the beginning, very few people knew about FPD. Now, local governments think that the industry is a
driving force behind GDP growth and plays an important part in pushing forward industrial restructuring. We can see the burning enthusiasm here. As for its future, bankers would have some questions. For example, will there be overcapacity as what happened to the PV industry? As I told the representatives of many banks, LCD is very differ-ent from PV. Market access is easy in the PV industry but LCD is a semiconductor business which is not easy at all.You will need the right people and government funding. Besides, the FPD industry has been presented with good opportunities such as mobile and digital displays so it has bright market prospects.
According to expert estimates, the number of Gen 8.5 production lines in the mainland will reach nine. Gen 8.5 is the best line for TV production. China will rank No.1 in
the world by output, contribute to 30% of the world’s total output, and see continued improvement of technology. Estimates show that the Chinese FPD panels will make up 75% of the market, which is a very good situation. Some reporters and economists have expressed different opinions. Some officials say that Gen 8 is nothing compared
with Gen 10. They must have confused the development of integrated circuits (IC) with that of FPD. As we all know, the development of IC from generation to generation comes with decreasing linewidth and growing technology intensity. As for LCD, I hope that companies will rely on new technology. FPD has developed in both quantity
and quality terms. Many innovations have been made in recent years. I have listed some of them here. These are some award-winning products. These are some innovati-ons of mainland enterprises.
Now I want to talk about the future of the display industry. The output of the FPD industry registered USD 138.8 billion in 2013 and is expected to reach USD 150 billion
in 2015. The share of LCD will stay between 30% and 40% in the future. China is the largest market in the world and will remain so for quite a long time. According to the
current development plan, BOE may grow into the world’s largest LCD producer and CSOT is growing very well. In the mainland, many companies are adjusting the size
of their products so capacity may drop but profits will increase slightly.
In short, I think that the FPD industry will make new contribution to the government’s efforts to stimulate domestic demand through information. The production lines in
the mainland have gained the upper land compared with their foreign counterparts since they are equipped with new technologies like LTPS TFT and Oxide TFT. In additi-on, since it is rather hard to transform old lines, we are not only increasing production but also improving quality and technology. Japan shifted from analog television to digital television and saw the number of TV sets soar to 22 million in 2011, and will introduce 4K UHD channels next year. It is also witnessing growth in large-sized TVs this year. What path will China follow then? China planned to stop the production of analog televisions in 2015 but now it is delayed to 2020 and CRT will be replaced. It is not good to introduce 3D broadcasting too early because it may affect the quality of high definition. 4K is the new trend but it is only good when used for TVs larger than 55 inc-hes.
I think the Gen 8.5 lines in China are not enough to meet the needs of development. As many speakers have said today, 4K TVs are still the mainstream and will drive the growth of FPD production because it has great strategic significance.
Lastly,I would like to talk about the relationship between TFT-LCD and AMOLED.I don’t think that AMOLED will replace TFT-LCD because AMOLED means to build new production line with the support of TFT.Metal oxide and LTPS can be used to make OLED.It’s the feature of OLED.In June this year when I was attending a conference abo-ut LCD in Cambridge, they broadcast a piece of BBC news. On May 29, Martin Schadt was presented with the European Inventor Award in the category LifetimeAchievem-ent, a top technology award in Europe. He holds more than 100 OLED patents and believes that Blu-ray materials have a short life cycle and don’t have anysubstitute yet.