The Chinese flat-panel display (FPD) industry has been growing
rapidly in recent years as a strategic emerging industry defined
by the central government. In 2015, the Chinese mainland
will have nine Gen 8.5 LCD panel production lines, edging out
Taiwan to become the world’s second largest FPD producer. As
leading Chinese display makers BOE and CSOT optimize their
portfolio of production lines, the mainland has seen
breakthroughs in display technology and its self-sufficiency in
panels has incre-ased significantly. The share that the Chinese
mainland has in the global LCD shipments increased from 3.9% in
2010 to 13% in 2013 and is expected to reach 25.66% in
In fact, the mainland could not even develop displays totally on its own until ten years ago. Its FPD industry is yet to grow compared with that of Japan, South Korea and
Taiwan. Since high-generation LCD panel production lines came into operation in the mainland, high-end panels have only taken up a small share of their production so most high-end panels are still imported. Each year the mainland buys a great many panels from Taiwan and South Korea for making high-end TVs. Competition in the high-end panel market has been intense since 2013. On the one hand, 4K UHD TVs have gained in popularity and LCD technologies such as curved and Oxide TFT displays have come under the spotlight; on the other, OLED TVs using the new-generation display technology have been mass-produced, driven by South Korean manufacturers
who have shifted their focus of investment from LCD to OLED.
Against such a backdrop, it is inevitable that FPD makers will target the high-end market. That also drives the competition among panel makers to shift from production
capacity to leading-edge technologies. BOE have recently built two Gen 8.5 production lines for new semiconductor displays. The one in Chongqing adopts the advanced Oxide TFT technology which replaces traditional semiconductor materials with indium gallium zinc oxide (IGZO). The Oxide TFT technology is among the most important t-echnologies for making high-end displays in the future. The other in Hefei is a TFT-LCD production line mainly for making high-end UHD LCD displays. BOE is not alone in this regard. CSOT also adopts the oxide semiconductor and AMOLED technologies for the Phase II of its TFT-LCD project while CEC-Panda has introduced Sharp’s
cutting-edge IGZO technology to its new Gen 8.5 production line.Apparently, mainland panel makers are making all-out efforts to break into the high-end market. According to Sigmaintell Consulting, the share of Oxide production will reach 2.0% in 2015 when the Oxide TFT technology becomes mature and a number of Gen 8.5 production lin-es come into operation.
Mainland panel makers have taken it as their foremost mission to make China’s FPD industry bigger and stronger. They have invested in and introduced a host of LCD
panel production lines in recent years despite the public concern about “overcapacity”, and started to make profits in 2013. The mainland’s self-sufficiency in panels, as
Sigmaintell Consulting predicts, will reach 40.2% in 2014 and the self-sufficiency in TV panels 58.5% in 2015. The next step is to increase the competitiveness of mainland LCD panel makers. Special efforts should be made to develop new technologies such as LTPS, metal oxides and OLED, which will pave the way for the mainland’s LCD
panel industry to grow bigger and stronger.
Despite the great achievements it has made over the past years, the Chinese mainland’s FPD industry will face both opportunities and challenges in the future. By 2020, the global display industry will maintain a compound annual growth rate (CAGR) of 5.9% and in particular, high-performance display devices, which will be in great dema-nd, will grow at a double-digit rate. Although mainland panel makers have built high-generation production lines, they still need to enable the mass production of
high-performance display devices as soon as possible and improve supporting services to achieve the economies of scale. Only in this way can they make profits in a real sense. In addition, although currently OLED cannot replace LCD in large-sized displays, China should take a preemptive move in developing large-sized OLED displays
so as to gain the upper hand in the global display industry.
TCL Chairman Li Dongsheng
Import tariff on LCD panels should be increased to 8-10%
The LCD display industry is of strategic significance for China to enhance its international competitiveness and grow stronger through the development of industries.
LCD panels are characterized by substantial input, good returns, high technological content and fast upgrading so government support is a must.
Compared with Japan and South Korea, China is a latecomer in the manufacturing of LCD displays. The industry’s foundation is weak and products are yet to be diversi-fied. The government should increase support for the LCD technology and promote the development of the LCD display industry.
I suggest increasing the import tariff on LCD panels to better protect the interests of Chinese FPD makers. A challenge that Chinese display markers face is that their depr-eciation expenses in new projects are 8-10% higher than those of their foreign counterparts. Given that, the Chinese government should raise the import tariff on LCD
panels for TVs so as to give due protection to Chinese manufacturers. The tariff rate is now 5% and may be raised to 8-10% to ease the financial pressure on panel comp-anies.
China’s electronic information industry has made great progress but it still relies on imported chips and software.To change such a situation, the government should give stronger support to the R&D efforts of Chinese enterprises.
CAS member Ouyang Zhongcan
Duty-free AMOLED product list should be adjusted
The next five years will be a critical period for China’s semiconductor display industry, which is one of the country’s information security pillars and needs greater policy support from the government. China should continue implementing the policy for new display innovation and development and increase the import tariff rate on LCD
The high-generation panel production lines in Japan, South Korea and Taiwan have much lower-level depreciation, which means lower costs for enterprises. However, panel markers in the mainland still need to strengthen their capacity for developing new display technologies. All of these have placed new pressures on them.
The Chinese government should impose a higher import tariff on LCD panels, continue tax policies such as gradually increasing the VAT on TFT-LCD displays and imp-ort equipment, and make timely adjustments to the duty-free AMOLED product list so as to create the environment for the healthy growth of mainland LCD panel makers.
China should never compromise with other countries when it comes to import tariffs. Moreover, the government should introduce key technology projects for the semicond-uctor display industry and strengthen exchanges and cooperation between enterprises in all segments of the industry such as materials, equipment, devices, systems,
content production and services to improve the competitiveness of the Chinese FPD industry as a whole.
Hu Chunming, Industry Research Director, LCD Branch of China Optics and Optoelectronics Manufactures Association (COEMA)
Continued policy support should be given to the FPD industry
As the capacity of mainland panel makers grows, their demand for glass substrates has been stimulated. Both foreign and local companies have speed up investments to get a head start in the Chinese mainland market. The world’s top three glass substrate manufacturers have all extended their presence in the mainland to meet the
growing demand for Gen 8.5 panel production lines. Local enterprises in the mainland have capacity for Gen 6 or lower-generation production lines, and about ten produ-ction lines are now in operation. While maintaining their position in the market, they are striving to develop large-sized displays and new technologies.
In the Tariff Execution Plan 2014, the Customs Tariff Commission of the State Council increases the rate of import tariff on glass substrates of Gen 6 or lower generations from 4% to 6%, which gives protection to local enterprises.
There are both opportunities and challenges facing China’s FPD industry. China remains a large producer and consumer of electronic products and the rapid advance-ment in electronics technology presents a bright prospect for the development of such products. Yet China is a latecomer in this field. Its new display industry has a weak
foundation and still needs time to develop mature technology and achieve the economies of scale. Therefore, we should not be over-optimistic and continued policy supp-ort should be provided. Otherwise, we may experience setbacks.