Corning Display President Zhang Zheng: The Chinese and US industries are complementary, and the display market size is increasing

Corning Display Technology's 10.5-generation LCD glass substrate production line in Wuhan, Hubei officially went into mass production on May 12. The plant is adjacent to BOE's local factory in Wuhan and supplies BOE with 10.5-generation glass substrates for the manufacture of large-size display panels.

Zhang Zheng, president of Corning Display Group, said that this is the company's second 10.5-generation glass substrate factory in the world, with an investment of more than US$1 billion. It has introduced Corning's most advanced production technology and is one of Corning Display Technology's largest investment projects in China in recent years. It includes fusion-drawn processes and back-end processing, etc., aiming to help the development of Hubei's display industry and strategic customer BOE.

"Corning has been in the Chinese market for more than 40 years," said Zhang Zheng, president of Corning Display Group. "Corning has invested more than $8 billion in mainland China and currently has 21 factories, offices, R&D centers, technology centers, logistics centers, and an Asian financial center."

At present, the share of domestic panel substrates is constantly increasing. According to the survey data of ultra-large generation panels, the share of domestic panel exports in the world is also increasing. In 2020, the export share increased from 38.5% in 2019 to 50%. Zhang Zheng told reporters that the trend of large size in the terminal market is quite obvious. "From the perspective of TV, the demand for 65-inch and 75-inch TVs has increased by double digits, and this is even more so in 2020," said Zhang Zheng.

Affected by the epidemic, many consumers use their limited resources for home entertainment, which has further increased the demand for large-size screens. Not only in home use, but also in public display, the growth rate is very fast. Zhang Zheng said that Corning has been closely following customers to help support their needs. For example, the mass production of the 10.5-generation technology platform in Wuhan can effectively support its partner BOE, focusing on the large-size panel market of 65 inches and above, and growing together by supporting customers and the large-size market.

The production of Corning's Wuhan 10.5-generation LCD glass substrate plant can supply BOE with 10.5-generation glass substrates with a size of about 3 meters x 3 meters for the manufacture of large-size display panels. The 10.5-generation glass substrate can provide the most economical cutting solution for 65-inch and 75-inch TVs. In the next few years, this generation of glass substrates will occupy a large share of the growth of the display glass market. It is expected that the market for large-size TVs of 65 inches and above will grow at a double-digit compound annual growth rate until 2024.

Corning recently announced on its official website that it will moderately increase the price of display glass substrates in the second quarter of this year. The reason is still the tight supply and demand relationship. Zhang Zheng believes that on the one hand, it is due to the rapid development of the terminal market in the past year, in addition to the TV, there are also notebook and monitor markets. On the other hand, in addition to the increase in terminal demand due to the epidemic, the rapid development of technology is also an important factor that prompts everyone to work and study at home.

"The demand in the terminal market has increased significantly. At the same time, other glass manufacturers in the industry have encountered some accidents, including power outages or explosions, which have affected their supply to a certain extent, and in turn affected the delivery time of downstream terminals." Zhang Zheng told reporters, "Corning used global production capacity in this process, through various methods, including some active and creative cooperation with customers, to maximize our production capacity to help customers get glass supply."

Zhang Zheng emphasized: "Corning's equipment is currently operating normally and can supply 100% of 10.5-generation customers. Production equipment requires some regular maintenance, but regular maintenance and explosion accidents and power outages are completely different things."

Regarding Corning's moderate increase in the price of display glass substrates, Zhang Zheng said: "From raw materials to power consumption, to precious metals required for stable production, including transportation, these costs are all increasing significantly. Corning has been using process optimization to overcome the cost increase as much as possible. Now there is no way to completely offset the cost increase, so it has also announced a moderate price increase."

In the past year, the total number of panels required for TVs, especially large-size TVs, including 65-inch and 75-inch TVs, has grown very fast, basically at a double-digit rate. Zhang Zheng predicts that household consumption demand will remain strong in the future. In terms of the terminal market scenario, distance education and working from home will become a must-have item. In the future, consumers will put these two points on their shopping lists when choosing smart terminals.

"After the epidemic is over, the growth of large-size display screens in the fields of in-vehicle displays and public displays will also be an important factor. In the long run, we are also very optimistic about these market segments," Zhang Zheng predicted.

As the technological competition between China and the United States intensifies, global industrial chain cooperation has also been affected. Corning has also observed some impacts on the industrial chain, but Zhang Zheng pointed out that the actual impact on the display industry chain is relatively limited.

"There is strong complementarity between the industries of China and the United States, and there is a strong possibility of a win-win situation. Corning can continue to maintain its confidence in the Chinese market. Judging from the investment in the completion and production of the 10.5-generation glass substrate factory in Wuhan, it is a good demonstration of Corning's determination to continue to strengthen cooperation with local governments and customers and develop well in China." Zhang Zheng answered reporters.

He Sihua, vice president of Corning Display Technologies International Business Unit and general manager of China, also said: "Corning has actually been committed to the development of the Chinese market, not just in the display business. In 2020, Corning announced a series of investments in multiple businesses in China, and the investment in the Wuhan factory is a good example."

He Sihua then added: "Corning Display Group has been deeply involved in the development of China's display industry in the past nearly 20 years. The current scale of China's display market is already large, and the market size is expected to continue to grow. The Chinese market will occupy an important position in the global display industry chain. Corning will always insist on developing together with customers, and has been paying attention to industry development trends, and is always ready to take appropriate measures to provide better support to customers."