Downstream demand for PMOLED segmented products in 2018
- Jun 04, 2018 -

                                 

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OLED display technology has the characteristics of self-luminous, wide viewing angle, high contrast, low power consumption, high reaction rate, light weight, thin thickness, full color, simple process, and is a representative of cutting-edge technology.

According to the driving method, OLED can be divided into active drive (AMOLED) and passive drive (PMOLED). Each pixel of AMOLED is equipped with a TFT (Thin Film Transistor) with a switch. The driving mode of the AMOLED is easier to achieve high brightness, high resolution, high color performance, and low power consumption. Such panels are widely used in consumer electronics products; PMOLED has a simple structure and easy process. It can effectively reduce manufacturing costs and response speed. It has great development potential in displaying simple micro devices. However, PMOLEDs will have large power consumption and long life if they are to be used for larger size applications. The problem of reduction is not suitable for large-size and high-resolution panels, and the current product size is limited to about 5 inches.

In the past two years, due to the slimness, power saving, ease of development of soft applications, and the ability to adapt to a variety of application scenarios, AMOLED displays have attracted widespread attention both inside and outside the industry. Compared with the investment of AMOLED or the transformation of a single production line that requires more than 10 billion investment, the investment of a single PMOLED production line is only about 200 million yuan. PMOLED technology is very advantageous in terms of small size and even small size. Under the premise of ensuring product quality, PMOLED can achieve the size that AMOLED can not achieve, or it can achieve the same size as AMOLED price, and its investment. Cost-effectiveness cannot be ignored.

PMOLED process is simple and technically difficult

PMOLED itself has a simple structure, its production process is not complicated, the production line does not occupy a large area, and the production line has a high degree of automation. PMOLED display production process includes substrate preparation, OLED preparation and module assembly.

Chart 1: PMOLED display production process

Downstream demand for PMOLED segmented products in 2018

Source: Forward-looking Industry Research Institute

PMOLED core materials depend on imports, accounting for a high proportion of costs

The main materials in the PMOLED display production process are ITO glass, organic light-emitting material, desiccant, IC, FPC, polarizer, UV glue, etc. Among them, the IC cost accounts for the highest proportion, up to 40%, and the organic luminescent material cost accounts for the top position. Second, reaching 15%, the main reason is that IC and organic light-emitting materials rely heavily on imports.

Chart 2: Material Cost of PMOLED Displays in 2017

Downstream demand for PMOLED segmented products in 2018

Source: Forward-looking Industry Research Institute

PMOLED products have a wide range of applications and have great potential for downstream applications

PMOLED applications include smart watches, automotive equipment, home appliances, mobile phone sub-displays, and office equipment. The market for professional display products represented by vehicle-mounted, industrial control and medical services has grown rapidly. In the on-vehicle display, as the demand for driving safety, navigation, and car entertainment leads to more and more information that needs to be displayed, as well as the strategy of automakers to increase the added value of products, the onboard display market has grown rapidly. In terms of industrial control display, with the increase in labor costs, increase in security requirements, and the rapid development of industrial automation, industrial control display products have maintained rapid growth. With regard to medical display, as the aging population leads to the shortage of medical resources and the improvement of medical automation, the medical display market has great potential for growth. Other display areas, including special displays (aviation, navigation), smart home displays and other markets are also growing.

Chart 3: PMOLED product terminal application classification

Downstream demand for PMOLED segmented products in 2018

Source: Forward-looking Industry Research Institute

The market concentration of PMOLED is high, and the market share of the four largest domestic companies accounts for about 100%

The PMOLED display has four main companies in the domestic market, with an annual operating income of approximately RMB 1.5 billion. The largest share of market share is in Taiwan's Min Bao Technology and Zhi Jing Optoelectronics. Their operating revenue accounts for 33% and 30%, respectively. Followed by Kunshan Visionox and Truly Semiconductors in mainland China, operating revenue accounted for 25% and 12%, respectively.

Chart 4: Market share of major domestic PMOLED display manufacturers in 2017 (by operating income)

Downstream demand for PMOLED segmented products in 2018

Source: Forward-looking Industry Research Institute

The three giants have a gross margin of over 25%, and Zhijing Optoelectronics has the highest gross margin

In 2014-2017, the PMOLED display industry gross margin was about 20%. In 2017, the gross margin of the industry exceeded 25%, and the highest gross margin of the domestic market was Taiwan’s Zhijing Optoelectronics, which had a gross margin of 31%. The gross margin of Visco China and Lanbao Technology was approximately 25%.

Chart 5: Comparison of PMOLED display industry gross margin in 2017

Downstream demand for PMOLED segmented products in 2018