Chinese display makers are expected to start full-fledged operation of a large-sized liquid crystal display (LCD) panel plant of 10G or more from next year. As a result, the global flat panel display production capacity is expected to increase dramatically, suggesting that the LCD oversupply period may become longer.

According to market researcher IHS Markets on December 7, China`s largest display maker, BOE, China Star (CSOT) and Foxconn, will launch seven 10-generation LCD factories from next year to 2020.

As a result, IHS Markit predicts that global flat panel LCD supply growth will reach 59% per annum over the next five years to 2022. The proportion of LCD panel production over 10G will also increase from 4% this year to 26% in 2020, according to the report. The purchase of flat panel display equipment is also expected to exceed USD 20 billion next year.

The LCD oversupply, which began at the end of 2015, is expected to continue for at least five years. The price of 55-inch LCD panels, which went above USD 228 in 2015, dropped to USD 200 in 2016 and then dropped to $ 180 in December of this year, according to market researcher WitsView.

The premium TV market is also moving rapidly to large-screen products as LCD panel prices have fallen sharply due to increased supply. Display panel manufacturers are competing to build a 10.5-generation plant optimized for 65-inch and 75-inch displays. The 8th generation and 8.6th generation plants, which account for the majority of large-area LCD production lines, are optimized to produce 55-inch and 58-inch panels, respectively, and are less efficient at producing larger-area LCDs.

The BOE has started full-scale operation of the 8.5-generation production line this year, and will start the 10th-generation plant from the first half of next year. China`s China Star (CSOT) and CEC-Panda are also in the process of building a large LCD production line. In the third quarter, the BOE of China boasted 21.7% (based on shipment) of the 9-inch and larger display panel market, ranking first in the market, pushing LG Display, which has been in the top spot for 31 consecutive quarters.

Currently, LG Display is making 90% of its total sales on LCD, and its profit structure is changing with its large organic light emitting diode (OLED) business. However, the company has already missed the investment period of six years since the investment in the establishment of an 8G OLED factory in Guangzhou in China has been delayed.

An industry expert said, "As the 10.5-generation plant is in full operation, the price of large-sized panels over 65 inches will fall by more than 5% each year, while the demand will increase 2.5 times more than the current 40 million per year."

By Kim Eun silverkim@


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