Panel industry in mainland China: from poor and white to the largest area in the world’s LCD panel production capacity

Jiwei.com reported that looking back on the development history of the global LCD panel industry, since its origin in the United States in the 1960s, it has gone through the process of Japan’s development – South Korea overtaking – China’s Taiwan region’s rise – China’s mainland region’s efforts.

The author has previously detailed the roles played by Japan, South Korea and Taiwan in this development process. Then, what twists and turns have mainland China experienced to become the world’s largest LCD panel production area from relying heavily on imports.

The beginning of the poor and the white

Like the semiconductor industry, my country’s liquid crystal display panel industry also started from one poor and two white. Although it is not too late for my country to invest in the research of liquid crystal materials,The Department of Chemistry of Tsinghua University, Beihua University and other scientific research institutes began to experiment in 1969.the former Ministry of Electronics Industry 774 Factory (Beijing Electronic Tube Factory, the predecessor of BOE), 770 Factory (Hunan Changsha Shuguang Electronic Tube Factory), Chinese Academy of Sciences 713 Factory (Henan Xinxiang) and Shanghai Electronic Tube Factory and other industrial pioneers also attended It entered the market in the late 1970s and early 1980s, but due to the constraints of imperfect equipment, insufficient funds, shortage of talents and other factors, the results were very small, and the industrialization of LCD panels was even more slim.

▲ Picture: The production workshop of Beijing Electronic Tube Factory in 1956

It didn’t turn around until 1984,This year, Shenzhen Zhongtianma Co., Ltd. built the first 4-inch TN-LCD production lineAt the same time, Factory No. 770 introduced major equipment from Japan through Hong Kong and built a 7-inch LCD panel production line. Although they are only small-scale workshop-style experimental lines and do not have the capacity for mass production, it also makes the LCD panel industry in mainland China look At dawn.

Three years later, Hebei Province and Tsinghua University cooperated to establish Yongsheng Huaqing Company, which successfully industrialized the research results of liquid crystal materials from the Department of Chemistry of Tsinghua University. my country’s LCD panel industry also ushered in the first golden period of development, initially forming a TN-LCD industry scale and building a 4-inch TN-LCD production line. Shortly thereafter, Shenzhen Tianma Company built another 7-inch line, and in the early 1990s built a 12-inch line, which was already the most advanced and large-scale production line in China at that time.

However, during the same period, the LCD panel industry of Japanese companies was in full swing. NEC, DTI (a joint venture between Toshiba and IBM) and Sharp have successively launched their first large-size TFT-LCD mass production lines. Data Display,Between 1991 and 1996, at least 25 high-volume panel production lines were built around the world, of which 21 were built in Japan. Then, with the participation of more companies, Japan has established a complete LCD panel industry chain system from raw material supply, equipment assembly, to manufacturing, and process specifications. In 1994, Japan’s share of the global LCD panel industry jumped to 94%, leaving mainland China behind.

Learn from failure

In the next development process, in addition to the current “leaders” in the panel market such as BOE and Huaxing Optoelectronics, Jilin Caijing and Shanghai Radio and Television Group (referred to as “Shanghai Radio and Television”) have also played an important role in promoting the development of LCD panels in mainland China. The role, but later disappeared in the torrent of history due to a series of factors such as technology, capital, and the market, and the industry also learned from it.

Among them, Jilin Caijing is a joint venture by Jilin Electronics Group and Changchun Institute of Optics and Mechanics of Chinese Academy of Sciences.In 1998, the liquid crystal base with an investment of 1.32 billion yuan was completed, with a planned annual production capacity of 380,000 pieces, which originally contained wireless hope, but the subsequent decision-making mistakes made it embark on a road of no return. In August of the same year, Jilin Caijing imported an old production line from Japan’s DTI at a cost of US$84 million, and completed trial production in Changchun in October of the following year. However, due to the weak technical foundation of the domestic LCD panel industry at that time, the yield rate after the project was completed was only 8%, and the products were limited to 16.1-inch and 10.4-inch panels that lacked the market. In the end, the entire project could not be mass-produced; in July 2000, Jilin Caijing was dragged down by the listing scam of “Tonghai Hi-Tech”, and the financial problems became prominent for a while, and then its development was frustrated all the way.

Shanghai Radio and Television adopts the “introduced joint venture” model to develop LCD panels.In April 2002, jointly invested 114.6 billion yen with Japan’s NEC to build a fifth-generation TFT-LCD production line, in December of the following year, SVA NEC, a joint venture established by the two parties (SVA holds 75% of the shares and NEC holds 25%), was officially established in Shanghai. After that, the joint venture company purchased relevant production patents and technologies from NEC and paid a lot of money. The cost of technical use and the lack of technical support will also lay the groundwork for the bankruptcy of Shanghai Radio and Television in the future. In the three years from 2005 to 2007, the 5th generation TFT-LCD production line of SVA NEC lost more than 500 million yuan. It originally thought that it would be able to turn over in 2008, but suffered a huge loss of 1.8 billion yuan due to the avalanche of LCD panel prices. In March 2009, Shanghai Radio and Television was entrusted and reorganized due to insolvency.

The failure of SVA also confirms the importance of core technologies. SVA does not have much say in the management of the entire production line, procurement of equipment parts and components, supplier management, and follow-up research and development of technologies, other than providing land and funds. All aspects are under the sole control of NEC.

Towards the road of independent innovation

Different from the “introduced joint venture” model of SVA,Panel companies such as BOE and CSOT have moved towards the road of independent innovation.

As early as 1994, BOE established TFT, PDP, FED and other flat panel display technology project research groups to find technologies that can replace CRT, and set TFT-LCD as the development direction four years later. However, the patents and technical barriers of TFT-LCD at that time made it difficult for BOE, and it was not easy to enter the game. Until 2003, South Korea’s Hyundai was riddled with debt due to the financial crisis and had to sell its TFT-LCD business. BOE finally acquired it at a price of US$380 million, including intellectual property, market share, marketing network and work team. Subsequently, a 5th-generation TFT-LCD production line was built in Beijing. The production line was put into operation two years later, ending the era of no independent LCD display in my country. In fact, what BOE wants to do is not only to acquire, but to develop its own technology based on this.

▲ Picture: BOE Hefei 6th generation line

Since 2008, BOE has successively built a number of TFT-LCD production lines in various parts of the country. With the continuous release of production capacity, it has been occupying the leading position in the global LCD TV panel shipments since 2018, and has also been in the field of LCD panels for smartphones and tablets for many years. No. 1 in a row.

While BOE was successful, CSOT also quietly rose. This panel enterprise jointly established by the Shenzhen Municipal Government and TCL Group has independently launched the 8.5-generation LCD panel project since its establishment in 2009. At that time, it was also questioned by the industry. On the one hand, the high-generation production line in Taiwan, China, had a cost advantage. On the other hand, Japan’s Sharp 10-generation line had already started construction. Therefore, CSOT’s 8.5-generation line did not have a competitive advantage. However, 27 months later, CSOT successfully entered the supply chain of Hisense, Changhong, Konka, Samsung and other manufacturers other than TCL, and now CSOT is also among the first echelon of LCD panels in the world.

In addition to BOE and Huaxing Optoelectronics, companies such as Tianshenma, Huike, CLP Panda, and Longteng Optoelectronics have also added impetus to the rise of my country’s LCD panel industry.

Since 2017, my country has become the world’s largest producer of LCD panels. In fact, in addition to the company’s own efforts, the rapid catch-up of the LCD panel industry in mainland China in a short period of time is also inseparable from the huge domestic demand market and the support of national policies behind it.

Conclusion: The development history of LCD panels in mainland my country perfectly interprets the inspirational story from laggards to leaders, and it can be seen from this that only mastering the core technology and continuous innovation can have a place.