Can China's OLED screen breakthrough become China's "third business card"?

　　OLED is divided into PM OLED (passive drive type) and AM OLED (active drive type). In addition to the technical differences, the latter has a more complex structure, high technical barriers, and requires greater investment. Relevant data shows that the market space for AMOLED is much larger. Let's follow the mobile phone portable editor to learn about the relevant content.

 Can China's OLED screen breakthrough become China's "third business card"?

　　Apple iPhoneX used AMOLED (organic light-emitting diode) screen for the first time, which ignited the AMOLED craze. Following Korean companies, various parts of China have launched AMOLED panel production lines, showing a trend of actively catching up.

　　Domestic companies such as BOE, Everdisplay, Tianma, and Visionox already have a small amount of AMOLED production capacity. TCL Group's CSOT, as well as Truly and Royole Technology will also become suppliers of flexible AMOLED screens in the future.

　　Zhang Deqiang, head of the 6th generation AMOLED project at Visionox Cloud Valley (Gu'an), said in an interview with the First Financial reporter that he is confident that the 6th generation AMOLED production line at Cloud Valley can be built into a world-leading high-level production line, making China's OLED screen another new world business card for my country after high-speed rail and nuclear power.

　　Dialectic "Third Business Card"

　　As the only Chinese company representing China in the formulation of international OLED standards and leading the formulation of international standards for flexible displays, Visionox, where Zhang Deqiang works, is a typical corporate representative.

　　At the 4th World Internet Conference held in Wuzhen in December this year, Visionox exhibited its newly developed "world's first fully foldable flexible screen" product for the first time. According to data cited by Zhang Deqiang, by 2020, the global OLED market will exceed US$70 billion, of which the flexible OLED market will exceed US$40 billion.

　　Domestic OLED manufacturers represented by Visionox and BOE are constantly accelerating technology development and the implementation of OLED production line projects to cope with the monopoly of foreign companies. According to the latest research report of IHS, in five years, China's OLED production will account for 26% of the global share, and China is expected to change from a major OLED consumer to a major OLED producer.

　　However, like all capital-intensive and technology-intensive industries, the OLED industry also needs a long process of accumulating technology and industrial experience. Visionox told the First Financial reporter that this is a process of coordination and synergy between upstream and downstream of the industry chain, which requires the participation of partners from all industries to enable China to move from a display power to a display powerhouse.

　　Visionox predicts that China's OLED production will account for a higher global market share in five years than the 26% predicted by IHS. Zhang Bing, research director of IHS, told the First Financial reporter, "From the perspective of the output of production capacity area, China's OLED market share may reach about 40% by 2020."

　　Visionox told the reporter from China Business News: "Nowadays, China is in sync with the world in terms of technology research and development level; in terms of industry, mainland China is following South Korea and has already walked ahead of Japan and Taiwan. So overall, we have broken through the international technical barriers and achieved large-scale mass production."

　　However, even so, for now, South Korean panel manufacturer Samsung Display has a long-term monopoly position. According to IHS statistics, Samsung's current market share in small and medium-sized OLED panels is around 95%.

　　The industry believes that if OLED can become China's third business card after high-speed rail and nuclear power, China's political, industrial, academic and research sectors need to form a greater synergy.

　　Technical barrier: Improving the production yield of flexible AMOLED screens

　　Samsung Electronics of South Korea started to produce AMOLED in 2000 and flexible AMOLED in 2005, and has accumulated more than ten years of production process experience. To catch up, emerging Chinese companies need to continue to explore and innovate.

　　Xu Zheng from the Institute of Optoelectronics Technology at Beijing Jiaotong University told the First Financial reporter that Chinese companies have basically mastered the production technology of flexible AMOLED screens, but the production yield rate is not as high as Samsung.

　　"Samsung has been making AMOLED for many years. In the first few years, AMOLED screen production was unprofitable. Just making AMOLED screens would have been a loss. It was relying on the mobile phone industry chain to ensure the survival of the AMOLED business, which enabled the development of AMOLED," said Xu Zheng.

　　Can small domestic companies that only make AMOLED screens survive if they suffer losses for three to five consecutive years? Xu Zheng said that after AMOLED goes into production, it is estimated that at least the first 1 to 2 years will be loss-making. Because the new factory has just been put into production, the yield rate is low, about 30% to 50%, and it is in the climbing stage. For example, a 6th generation AMOLED line has a monthly production capacity of 40,000 substrates in the first phase. Under this capacity, no matter how much the product yield is, it must continue to produce, so that the yield rate will go up, otherwise the problems encountered in mass production cannot be solved. Xu Zheng said, "So you have to be patient and withstand the initial losses."

　　South Korea has only two display giants, while many Chinese companies such as BOE, Huaxing Optoelectronics, Tianma, Visionox, Everdisplay, Truly, and Royole are involved in the AMOLED industry. Xu Zheng suggested, "From the perspective of the country and the industry, China's AMOLED industry should concentrate investment entities and investment areas, because only large companies can withstand the initial losses and achieve economic production capacity."

　　Capacity barrier: breaking Samsung's monopoly on 90% of the market

　　China's AMOLED industry is rising rapidly. According to Geng Yi, executive vice secretary general of the China AMOLED Industry Alliance, all of the seven 6th generation lines in China are flexible AMOLED panel production lines, and they are expected to start shipping gradually from the beginning of 2018. China will become the world's second largest AMOLED panel supplier after South Korea, but the overall production capacity is still significantly behind that of South Korean companies.

　　This year, Samsung provided the AMOLED screen for Apple iPhoneX. Li Yaqin, deputy general manager of Qunzhi Consulting, told Caixin that in 2017, the companies supplying and demanding flexible AMOLED screens were very concentrated. In terms of demand, Apple and Samsung Electronics currently account for 80% of the demand for flexible AMOLED screens. In terms of supply, 98% of flexible AMOLED screens are still provided by Samsung Electronics.

　　Judging from the screen demand of various mainstream mobile phone brands, Apple and Samsung will see the largest growth in the use of AMOLED screens in the next two years. Li Yaqin said that the proportion of AMOLED screens used in Apple phones will reach nearly 70% next year. Among domestic brands, the use of AMOLED screens by OPPO and vivo remains stable, and Xiaomi will see a relatively large increase in the use of AMOLED screens next year.

　　Samsung is currently the supplier of AMOLED screens for OPPO, vivo and Xiaomi, because 99% of the world's mass-produced AMOLED screens are supplied by Samsung, while BOE and Tianma's AMOLED screens have not yet been officially supplied. Visionox and Everdisplay's AMOLED screens are mainly supplied to ZTE.

　　Therefore, Li Yaqin believes that the development of China's AMOLED industry is still in its early stages and there are still many problems in the industrial chain, especially in terms of material support, cost and yield, so we cannot be blindly optimistic.

　　According to a research report by Qunzhi Consulting, the suppliers of upstream materials and production equipment for AMOLED panels are almost all Japanese, Korean and American companies, with very few Chinese companies. Currently, China's major AMOLED material suppliers include Aglaya, Jilin Aolaide Optoelectronic Materials Co., Ltd., Xi'an Ruilian New Materials Co., Ltd., and Wanrun Holdings, etc.

　　Chen Jun, chief analyst at Qunzhi Consulting, believes that in the medium and long term, the government and related enterprises need to work together to solve this problem. In the short and medium term, introducing foreign upstream key material factories to build supporting factories in China is also a feasible solution.

　　Cui Jilong, deputy director of research at the Display Devices and Systems Division of AVC, said that in addition to quickly going through the two basic stages of capacity ramp-up and yield improvement, mainland Chinese companies must also focus on solving the embarrassing situation of being controlled by others in the upstream core equipment and materials in the long run. In particular, evaporation equipment and luminescent materials have restricted the development of the mainland AMOLED industry to a certain extent. As a backbone enterprise in the industry chain, panel manufacturers can penetrate upstream material and equipment manufacturers through capital investment, joint development, and technical cooperation, thereby opening up the entire AMOLED industry chain. This is an effective shortcut to shorten the gap as soon as possible.

　　Zhang Yu, senior vice president of BOE, said that BOE's LCD panel production line was put into operation in 2005. At the beginning, liquid crystal materials and production equipment were all imported. Now the localization rate of liquid crystal materials has reached 60%, and the localization rate of LCD panel production equipment has reached 40%. As long as China has huge market demand, the localization of the industrial chain will be achieved. China's AMOLED industry will also be like the LCD panel industry. In the future, the localization level of upstream supporting facilities will gradually increase.

　　People from Hehui Optoelectronics believe that the problems of China's AMOLED industry cannot be solved by the capabilities of one or two manufacturers, and the entire industry chain needs to be called upon to jointly build and develop. It is necessary to provide support in terms of policies and funds to promote the joint development of upstream and downstream and form economies of scale. At the same time, paying attention to technology upgrades and talent training and reserves to create a sound industry chain is also the key to the industry's sustainable development and success.

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