LCD panel prices are about to fall for the first time? Domestic screens are poised to overtake other brands

The price hike of LCD panels has not stopped, and even the entire semiconductor industry and most manufacturing industries are still going up. Moore's Law seems to be less effective in recent years. Everyone should want to know when the price will stabilize. Today, I will predict this difficult problem.

"LCD panels may see their first decline in June, and it will probably take until November for it to be reflected in specific products."

This is not something I made up, but a signal I got when chatting with the head of the marketing department of a TV manufacturer. According to the supply chain, the production capacity of domestic panel manufacturers is increasing significantly, and the dependence on Japanese and Korean panel manufacturers will gradually decrease, and the contradiction between domestic panel supply and demand will gradually disappear. This time is probably in June, and judging from the product production cycle, it will probably take until November to use this batch of price-reduced panels when they are launched on the market, just in time for the 11.11 e-commerce promotion.

Based on this news, can we judge that this year will be the year when domestic panel manufacturers prepare to catch up?

As expected, good news has come out recently from BOE and Foxconn, with their financial reports in the last two quarters continuing to improve. In the first quarter of this year, BOE even saw an explosive growth of 20 times in net profit year-on-year. Foxconn's net profit also increased by 30% year-on-year, and in mid-February, it won an industrial land in Yongning Street, Zengcheng District for 989 million yuan, and on April 21, it won another industrial land in the area for 140 million yuan.

Domestic panel manufacturers have invested for many years to achieve economies of scale, and the gap between Chinese companies and Korean and Japanese companies is gradually narrowing. The industry transformation and the popularity of OLED and quantum dot displays have given domestic panel manufacturers an excellent opportunity to overtake others.

However, it must be admitted that most of the high-tech and sophisticated technologies in the panel industry are still in the hands of Japanese and Korean manufacturers. But why do they shrink their market share and form a "defeat" situation during the industry transformation?

This reminds me of another topic, which is why LGD does not allocate OLED resources to Internet TV manufacturers. If Whaley, LeTV, and Xiaomi can obtain OLED panels, they will definitely integrate them into their own TVs and launch related high-end products, even if they cannot be sold or do not make money.

However, this did not happen for two reasons. First, LGD does not want the price of OLED to be disrupted too much. We all know that the business models of Internet companies are very imaginative when making products. If the price of OLED panels is disrupted under the current production volume, LGD's high R&D investment will not get a reasonable return.

Secondly, why is the limited production capacity of OLED not accelerated to expand? Because under the existing OLED technology conditions, no one dares to bet all their efforts on OLED. What if OLED has a technological breakthrough, has new and improved products, or after vigorous promotion, people's recognition of large-screen OLED is still not as good as LCD TVs, then the seemingly advanced products that are bet on today may become a huge inventory that is difficult to digest. Moreover, OLED has no advantage over LCD TVs in price and efficiency. Therefore, even LGD can only act cautiously, while detecting market feedback, and seeking more cooperation with brand manufacturers to reduce risks and advance and retreat together.

The relevant lessons have been engraved on Changhong in the plasma era. Since its establishment in 2007, Changhong's plasma business has continuously invested in and built plasma screen and module projects. Before the sell-off, it had invested more than 4 billion yuan in plasma projects, but only suffered losses year after year. So even if OLED is an important development direction of future display technology, it cannot just bloom on the LGD tree.

Looking back at why domestic panel manufacturers are so aggressive, we can understand the reason. The advantage of domestic panel manufacturers is that they are large-scale and cost-effective. Therefore, if anyone comes to compete with them for the low-end and mid-end market, it will be difficult. They cannot compete head-on, so they will inevitably shrink to the mid-to-high-end market. Domestic companies such as Sharp, BOE, Huaxing Optoelectronics, and Tianma are already very competitive, and LG Display and Samsung Display are losing more and more advantages.

These changes are closely related to the competition in the domestic color TV market. In particular, after Internet TV manufacturers entered the traditional color TV industry, the impact on prices was huge. Profits are getting thinner and thinner, and the overall market is getting bigger and bigger. The demand for large-screen TVs in China, the United States and Southeast Asia is also expanding.

Compared with the previous situation where the LCD panel industry was completely monopolized by South Korea, Japan, and Taiwan, China's LCD panel companies have now surpassed them to a certain extent. Because the manufacturing giant has a strong learning ability and lower labor and land costs, after more than ten years of hard work and continuous government investment and support, China's panel companies have greatly enhanced their competitiveness in the entire upstream supply chain, both in terms of technology and business scale.

We can see that some LCD TVs from Apple, Sony, LG and Samsung all use domestically produced screens. The technology and quality of domestically produced screens have reached international standards, and the prices are more advantageous.

The prediction of a drop in LCD panel prices is also based on the rising trend of domestic panel manufacturers. In addition, the timing of this entry coincides with the transformation of consumption, and perhaps it can also move the whole body and achieve a major reversal. As the saying goes, "whatever is produced in China, the price will drop", so we have to seize the opportunity.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.