China set to supersede South Korea as leading large LCD panel producer
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Joseph O'Halloran
| 04 September 2017

With a production capacity share of 35.7% by the end of 2017, China is set to overtake the traditional large-size LCD-panel manufacturing powerhouses, in particular South Korea, according to display analyst WitsView.

The analyst also showed that from a share of 30.1% at the end of 2016, China’s share of the global capacity area may likely increase to almost half of the market by 2020. By contrast, South Korea’s share is projected to slide down to third place in the 2017 capacity share ranking with 28.8%, a significant drop from its leading share of 34.1% in 2016. Taiwan’s capacity share is expected to jump from 28.9% in 2016 to 29.8% in 2017, making the island the second-largest producing region.

“Both domestic and foreign panel-makers continue to build and expand their fabs in China because of the country’s enormous market and the financial support from the Chinese Government, commented WitsView senior research manager Anita Wang. “At the same time, the capacity share of South Korea has shrunk. Samsung Display (SDC) closed its Gen-7 fab L7-1 at the end of 2016, and both SDC and LG Display (LGD) have lowered their Gen-5 capacity.”

WitsView believes that with South Korean panel-makers lowering their production capacity, the global production capacity in area for large-size panels is estimated to reach 246.6 million square meters, representing an annual increase of just 1.3%. It adds that right now, 2017’s capacity area growth rate is also the lowest within the recent two to three-year period. Over the next three years, however, it expects six new Gen-10.5 fabs to be in operation, and that capacity area growth will again take off.

In China, domestic panel-maker China Star Optoelectronics Technology (CSOT) will build a Gen-10.5 fab plant in Shenzhen, while BOE plans to set up another line in Wuhan. There is also a Gen-10.5 facility that is being built in Guangzhou by Sakai Display Products (SDP). In the US, the Wisconsin project that was announced by Foxconn is expected to include a Gen-10.5 line as well. As for South Korea, there are reports of LGD planning to build a plant Paju for processing Gen-10.5 glass substrates.

WitsView observed that the panel industry over the past several years has worked to raise the demand for large-size TV sets to help consume the production capacity of fabrication lines of larger generations. With more Gen-10.5 facilities entering mass production, the industry will be pushing panels sized 65” or larger as the main products for the TV market.

The analyst forecasts that the global capacity area for large-size panels will expand by 8% to 9% annually from 2018 and 2020, totalling around 317.8 million square metres per year by the end of the period. “Looking ahead, investments in production capacity among competing panel-makers will reach a new level. Next year, a Gen-10.5 fab in Hefei, China, owned by BOE Technology (BOE) will be entering mass production, thus replacing Sharp’s Gen-10 fab in Japan’s Sakai as the world’s largest-generation panel fab,” Added Wang. “Nonetheless, other major panel makers are also planning to establish their own Gen-10.5 lines within the next several years.”

However, WitsView also sounded a note of caution, warning that the rapid expansion of Gen-10.5 capacity will also increase the risk of oversupply in the future. It also said that some panel makers still have not invested in a Gen-10.5 fab due to the potential financial burden.