With its flexibility, thinness and high color gamut, OLED has become the preferred display technology for mobile phones as well as the standard equipment for many high-end phones. Until recently, Samsung had almost the entire industry's say in OLED panels for smartphones, but that seems to be changing.
According to a recent report from market research firm Omdia, Samsung's market share of display OLED panels has fallen from 80% in 2020 to 77% in 2021, and is likely to fall further to 65% in 2022. China's market share of OLED panels is expected to rise from 15% in 2021 to 27% in 2022. As smartphone screens speed up, there is fierce competition among panel makers.
Samsung is going all out to expand OLED production
Samsung Display has officially started a project to convert its TV LCD 7-2 production line into an OLED panel production line in the city of Yuai. The company plans to complete the demolition of the original production line by July 20, and then build a sixth-generation small and medium size OLED panel production line. The company plans to invest 17 billion yuan to boost OLED panel capacity.
Comments have suggested that Samsung's dominance could be undermined if its display capacity does not quickly catch up with the rapidly expanding demand for OLED panels, thanks to the booming smartphone display market. The dismantling of the LCD production line is also an attempt to secure the first small and medium size OLED panel "position".
According to Zhang Zhihua, a senior analyst at Ofweek Industry Research Center, Samsung Display is likely to supply OLED screens for Apple's new models this year, and other OLED panel manufacturers, such as LG, Sharp, JDI, etc., will begin mass production. And OLED panel manufacturers from the Chinese mainland and Taiwan are likely to be included in the supplier evaluation system.
Chinese manufacturers compete in the OLED panel market
BOE, China's largest display panel company, is expected to expand its market share from 6 percent in 2021 to 13 percent in 2022, while TCL Huaxing Optoelectronics will grow from 2 percent to 6 percent and Tianma from 1 percent to 4 percent, according to Omdia's forecast.
In fact, the rise of Chinese panel makers is well documented. Since 2009, TCL Technology, BOE, Huike and other enterprises have increased production one after another, and quickly occupied the TV LCD panel market, which accounts for 70% of the total shipments of the global panel market, forcing Korean enterprises to focus on the OLED market.
Publicly available data shows that OLED capacity in the Chinese mainland has rapidly increased from 1.1 percent in 2016 to 13 percent in 2020. In 2020, the production capacity of OLED in the Chinese mainland has reached 4.388 million square meters, and there are more OLED production lines under construction. Domestic OLED production capacity is constantly increasing.
Industry insiders commented: "Currently, in the domestic smartphone market, the localization rate of OLED panels is increasing rapidly. The development of domestic OLED panel manufacturers not only plays a role in maintaining the safety of downstream enterprises' industrial chain and improving their bargaining power, but more importantly, they can support the development of downstream enterprises through their own technologies."
The domestic OLED industry chain still needs to strengthen its weak links
On the whole, the OLED panel industry chain covers upstream materials and equipment, midstream R&D and production, and downstream applications, among which there are still many shortcomings to be addressed.
In terms of technology, the core patents of OLED are still concentrated in the hands of Korean companies, and their independent research and development capabilities need to be strengthened. Take, for example, a Samsung patent in the area of folding screen segmentation of OLED display technology, which simplifies the stacking structure of OLED displays. To bypass this process, domestic panel makers would have to solve production problems with more complex processes, which would increase production costs.
The technology gap between domestic OLED manufacturers and Korean companies has gradually narrowed. BOE has filed more than 27,000 patents for OLED display screens, gradually surpassing South Korean display giant LG. Allaid has achieved a technological breakthrough in optical materials, and successfully developed and produced evaporator source. Wanrun shares in the optical matching layer and TADF green monomer material direction has also made a breakthrough.
At present, there is still a lot of room for Chinese manufacturers to improve the production capacity and yield of flexible AMOLED. Although BOE Chengdu, TCL Huaxing Wuhan and other production lines have achieved mass production, but the capacity is still limited. There is still room for domestic AMOLED profits to improve.
Liu Tun, senior analyst at CCID Consultant, said: "Domestic manufacturers should continue to improve AMOLED production line technology maturity, capacity increase to create scale effect, and bundling with terminal brand customers to further activate profit margins.
