According to recent data from IHS Markit, China is set to overtake South Korea in the second quarter of 2019, becoming the global leader in LCD production capacity. Prior to the fourth quarter of 2018, China had already surpassed South Korea in terms of 8th-generation line capacity, leading the way as the largest producer in this segment. Over the span of just five years, mainland China's panel manufacturers have achieved what took other regional competitors 15 to 20 years to accomplish, rapidly growing into the world’s largest capacity hub.
Currently, six 8th-generation lines in mainland China have reached their designed production capacities, with two additional lines in the process of scaling up. It is anticipated that these lines will reach their maximum design output by the second quarter of 2018. By 2020, mainland China will boast a total of 10 8th-generation lines (including 8.5, 8.6, and 8.7 generations), with a combined monthly production capacity of 1.23 million sheets, significantly exceeding the combined monthly capacity of 960,000 sheets produced by Samsung and LG Display. This figure does not even include the three 10.5-generation lines that have already reached full capacity (BOE Hefei B9, and China Star Optoelectronics Shenzhen T6 and T7), nor the new 10.5-generation projects currently under construction by Sharp, Wako, and BOE.
As shown in Table 1, China will also host 10 5.5/6-generation OLED production lines by 2022, with a total monthly production capacity of 330,000 units, making it the second-largest OLED production hub after South Korea.
According to IHS Markit's latest projections, by 2019, BOE will surpass LG Display to become the world’s largest LCD panel manufacturer by production area. Starting in 2021, China Star Optoelectronics is expected to surpass Innolux, becoming the fourth-largest panel manufacturer globally.
The rapid expansion of production capacity, coupled with rising panel prices since mid-2016, has contributed to strong financial performance for mainland panel companies over the past year. However, the recent decline in demand has raised concerns among many companies about whether their annual profits will be concentrated in the latter half of the year or even the final quarter. For instance, the price of a 32-inch LCD TV panel, which was $50 just four quarters ago, has dropped significantly.
IHS Markit predicts that by 2020, to consume all the new production capacity added between 2017 and 2020, the average size of LCD TV panels will need to grow to approximately 50 inches. In the second quarter of 2017, the average size was only 42.5 inches. This implies that unless the total shipment volume shrinks, annual growth in average panel size falls below 2.5 inches over the next three years, the market could face an oversupply situation by 2020.
For those interested in smart TVs and boxes, Smart TV Information Network Sofa Butler (http://) remains a go-to resource for news, discussions, and updates on smart TVs and boxes in China.
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