Domestic demand set to surge as more users shift to portable, bigger devices
Domestic flexible display panel makers are set to witness explosive growth in the next few years as leading smartphone vendors ramp up efforts to roll out new products like foldable phones to bolster sagging fortunes.
Buoyed by the prospects, companies are already scaling up capacities in segments like flexible screens used for mobile devices and smart wearables, according to industry sources. These include active matrix/organic light-emitting diodes or AMOLEDs and organic light-emitting diodes used for displays.
BOE Technology Group Co Ltd, a Beijing-based supplier of display products and solutions, said in December that it is planning to build a new sixth-generation flexible AMOLED production line in Fuzhou, Fujian province, with a total investment of 46.5 billion yuan ($6.9 billion).
“The flexible AMOLED display brings more possibilities to a phone’s appearance,” said Zhang Yu, senior vice-president of BOE.
AMOLEDs are more flexible with faster responses, high contrast and wide visual angles, compared to traditional liquid crystal display, or LCD, panels. But they are in short supply and hence have huge market potential, due to the absence of competition.
BOE has three sixth-generation flexible AMOLED production lines at present. It started mass production of the panels from its facility in Chengdu, Sichuan province, in October 2017. The panels have already been used by more than 10 smartphone manufacturers including Huawei Technologies Co Ltd, Oppo Electronics Corp, Vivo Mobile Communication Technology Co, Xiaomi Corp, ZTE Corp and Nubia Technology Co Ltd.
The company’s second line in Mianyang, Sichuan province, is set to start mass production this year, while work on the third facility commenced in Chongqing last year.
While companies are bullish about market prospects, industry analysts remained guarded on the prospects for foldable products.
According to CITIC Securities, 2019 will be the first year of application for foldable and flexible screens and OLED panel shipments will cross 1 million units. However, companies may still face considerable challenges as steep prices could affect popularity.
IHS Markit, another market research firm, expects BOE to be the world’s largest supplier of AMOLED display panels this year, with shipments of foldable panels set to reach 50 million by 2025.
The optimism has already led to a surge in the prices of OLED-related stocks, such as BOE, Visionox Co Ltd, Lingyi iTech, Triumph Science and Technology, with most of the shares hitting the daily price limits.
South Korean tech giant Samsung Electronics Co Ltd currently dominates the global AMOLED sector, with a 90 percent market share.
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