Samsung Display OLED panels have been snapped up, with Xiaomi, Oppo, Vivo, Apple, and others already planning to sign early OLED procurement contracts with Samsung Display for 2022.
As Samsung Display has the most stable supply capacity of OLED panels, Xiaomi, Oppo, Vivo, Apple, and others are all planning to sign large OLED procurement contracts with Samsung Display for 2022, supply chain sources said.
Judging from the intended order situation, Xiaomi is being very aggressive and will purchase a large number of flexible OLED panels from Samsung Display, fully focusing on the mid-to-high-end market in 2022.
Sources in the supply chain pointed out that, typically, mobile phone manufacturers first develop new models and then purchase OLED panels based on those models. However, due to the shortage of driver chip resources, mobile phone manufacturers are now choosing to secure high-quality resources first, and then develop new models based on those resources.
In the case of a shortage of driver chip resources, high-quality resources will be concentrated in the larger mobile phone factories, leaving smaller factories to face a more severe survival challenge. In 2022, smaller mobile phone factories will experience a new round of reshuffling, and many will be forced to shut down.
As the world's largest producer and consumer of consumer electronics, China's vibrant end-user market is seeing increasing demand for OLED.
Data shows that in 2019, China's production of mobile phones, computers, and televisions accounted for 90%, 90%, and more than 70% of the world's total production, all ranking first globally, which reflects the strong demand for downstream terminal applications. However, OLED panel supply is mainly concentrated in South Korea, and domestic OLED panels are in a state of short supply.
In recent years, China has implemented a series of policies to promote the R&D of OLED technology and the development of supporting industries.
At the end of 2016, the National Strategic Emerging Industries Development Plan for the 13th Five-Year Plan highlighted that China should achieve domestic breakthroughs and large-scale applications of active-matrix organic light-emitting diode (AMOLED), ultra-high-definition quantum dot liquid crystal displays, flexible displays, and other technologies.
In April 2018, the Ministry of Industry and Information Technology released the Three-Year Action Plan for the Development of the New Display Industry, which emphasized the need to accelerate research in AMOLED micro-displays, quantum dots, printed OLED displays, and other forward-looking display technologies.
In September 2019, the Ministry of Industry and Information Technology released implementation opinions on promoting the quality of manufacturing products and services. The opinions mentioned that the government supports the construction of printing and flexible display innovation centers and actively promotes the commercialization and industrialization of innovative results.
With strong national policy support, domestic enterprises have ramped up OLED panel production. According to OMDIA, domestic panel makers shipped 105 million OLED panels in 2019, more than tripling from 32 million in 2018. With the increase in domestic OLED capacity, it is expected that Chinese mainland will account for nearly 45 percent of total OLED panel production capacity by 2022, when China is expected to surpass South Korea as the world's largest OLED panel supplier.
