Chinese firms going for high-definition displays as a way to profit.
Growing demand for organic light-emitting diodes (OLEDs), thanks to foldable smartphones and the country’s efforts to boost the ultra-high-definition video industry, is expected to create new growth opportunities for the display panel sector.
BOE Technology Group Co Ltd, a Beijing-based supplier of display products and solutions, said on Monday that its net profit reached 3.44 billion yuan ($512.8 million) in 2018, down 54.61 percent from the same period in 2017, while its revenue rose 3.53 percent to 97.1 billion yuan.
The weak demand for display screens of smartphones, tablets, PCs and televisions and the sharp fluctuation in TV panel prices triggered intense competition in the display panel sector, according to BOE.
The company said it will speed up application of flexible panels, promote ultra-high-definition 8K panels, as well as expand its presence in the internet of things, healthcare sector and other emerging industries in 2019.
It will invest 13.6 billion yuan to establish a life science and technology industry base in Beijing, which is expected to be put into operation in 2022.
“We will continue to intensify efforts in patent application, and research and development, covering liquid crystal display or LCD, OLED, sensors, artificial intelligence and big data. With the improvement of technology innovation ability, BOE will further enhance its core competence in the field of IoT,” said Liu Hongfeng, vice-president of BOE.
Its Gen 10.5 TFT-LCD production line has achieved mass operation in Hefei, Anhui province. The plant will produce high-definition LCD screens of 65 inches and above.
BOE has three sixth-generation active matrix/organic light-emitting diodes or AMOLED production lines. It started mass production of the panels from its facility in Chengdu, Sichuan province, in October 2017. The panels have already been used by more than 10 smartphone manufacturers including Huawei, Oppo and Vivo.
IHS Markit, a market research firm, expects BOE to be the world’s largest supplier of AMOLED display panels in 2019, with shipments of foldable panels set to reach 50 million by 2025.
Li Yaqin, general manager of market research firm Sigmaintell Consulting, said 2018 has been the most difficult year for the global display panel industry in the past five years.
“The average price of large-size panels dropped by more than 20 percent, and the growth of flexible OLED is lower than expectations, which resulted in the decline of output value and profits of the panel industry,” Li said.
Chinese smartphone manufacturers have already released foldable screen phones and many more are slated to follow suit this year, according to Li.
The total scale of China’s ultrahigh-definition video industry will exceed 4 trillion yuan by 2022, according to an action plan jointly issued by the Ministry of Industry and Information Technology, National Radio and Television Administration, and the China Media Group.
The plan said a sound industrial system for 4K video is expected to be established and breakthroughs will be made in the research and development of products and the industrialization of 8K technology by 2022.
Dong Min, general manager at Beijing consultancy All View Cloud, said the large-size screens with high-definition technologies and small-size flexible screens will witness an explosive growth in the next two to three years, and how to quickly find out differentiated application sceneries is critical for panel manufacturers.