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WITH COVID‐19 INFECTIONS REPORTED IN MORE THAN 100 countries by early March 2020, the health crisis" impact on the display manufacturing industry was being felt well beyond Wuhan, China, where the first cases of the illness were reported.

Faced with a reduced workforce caused by travel bans and quarantine conditions, LCD and OLED fabrication plants (fabs) across China struggled to resume normal operations in early‐ to mid‐February. Chinese LCD fabs were only expected to have a capacity utilization of 70 to 75 percent for the month compared to a normal rate of 90 to 95 percent, according to research from Omdia Display.

The biggest impact is in LCD displays for TVs and notebook computers. By late 2019, the prolonged issue of LCD panel over‐supply driven by Chinese fabs had begun to reverse course as Korean manufacturers restructured their capacity, shutting down some fabs and converting others to OLED production. According to Hsieh, concerns about an LCD panel supply going forward already had spurred some TV manufacturers to increase orders, and now that LCD production in China is slowing as a result of the COVID‐19 outbreak, LCD panel makers are seeking sharp price increases from their original equipment manufacturer (OEM) customers, with a month‐to‐month jump of as much as 10 percent in some cases.

Omdia had originally forecast that the price for an open‐cell LCD TV panel was going to rise by $1 or $2 per month in February, but the actual increase may wind up being $3 to $5 for the month. “The problem is the coronavirus is coming so fast [that] the panel maker has been given a very good reason to increase the price radically,” Hsieh says. He also expects prices to increase for notebook displays, for which he predicts a 30–40 percent decrease in production for 2020"s first financial quarter (Q1), because of shortages in LCD modules.

While concerns over COVID‐19 caused the cancellation of the Mobile World Congress (MWC) tradeshow in Barcelona, Spain, the near‐term impact of the epidemic on smartphone display production appears to be minimal. Q1 production of smartphone displays is generally slow, notes Hsieh, with OEMs traditionally announcing new smartphone models at MWC, but not placing orders for displays until Q2 or Q3. And the bulk of OLED displays, which dominate the market for new high‐end phones, also are made by Korean manufacturers such as Samsung Display. Last year, Korean fabs shipped 433 million smartphone displays, while China was at 54 million. Hsieh said initial targets for 2020 were 476 million smartphone OLEDs shipped from Korea and 128 million from China, which would more than double China"s total from last year. Although the coronavirus will cause a “short‐term setback” for Chinese smartphone OLED makers, he still has a target of more than 100 million Chinese OLEDs.

In Wuhan itself, there are five major fabs, with four making smartphone displays. China Star and Tianma each operate a low‐temperature polycrystalline silicon LCD fab and a flexible OLED fab in the city, while BOE has a new Gen 10.5 LCD plant aimed at TV panels. Hsieh says that the China Star and Tianma OLED fabs are both in the ramping‐up stages, and the new BOE fab also is moving slowly. The biggest impact of COVID‐19 in Wuhan may be on the China Star Gen 6 OLED plant. Along with BOE, it"s slated to be a key supplier of flexible OLED panels for Lenovo"s new Motorola Razr foldable phone. “It"s unfortunate timing,” Hsieh says. —Glen Dickson

SEOUL, Dec 29 (Reuters) - Samsung Electronics (005930.KS) said on Tuesday it will extend production of liquid crystal display (LCD) panels for TVs and monitors, as stay-at-home trends of the coronavirus pandemic created an uptick in demand.

Samsung Display"s decision to extend LCD production in South Korea for an unspecified period of time overrides its announcement in March that it would end all production by the end of the year to focus on more advanced technology.

The stay-at-home trend sparked by the coronavirus pandemic led to a 30% quarter-on-quarter spike in global panel demand in the third quarter of the year amid more TV and notebook demand, according to technology research firm TrendForce.

Samsung had produced LCD panels in both South Korea and China, but it earlier this year sold a majority stake in its Suzhou LCD production unit to TCL Technology Group Corp"s (000100.SZ) China Star Optoelectronics Technology unit.

Asian makers of liquid crystal display (LCD) screens are rushing to set up production bases in China, which is expected to become the world’s biggest LCD TV market within a few years.

Samsung, the world’s No.1 LCD maker, has sought Chinese approval for its 7.5-generation LCD manufacturing facility in Suzhou, Jiangsu province, requiring 2.6 trillion won ($2.35 billion) investment. [ID:nSEO131216]

LG Display has also signed a separate deal with the Chinese city of Guangzhou, Guangdong province, for a $4 billion, 8th-generation panel plant. [nSEO152959]

Attendees visit the booth of TV panel maker Shenzhen China Star Optoelectronics Technology during an international exhibition in Shanghai on July 11, 2019. [Photo by Lyu Liang/For China Daily]

Chinese companies have gained a competitive edge in the large-screen display industry and the exit of South Korean counterparts such as Samsung Electronics and LG Display from the liquid crystal display market will bring opportunities for China"s panel makers despite the challenges posed by the COVID-19 pandemic.

Market research firm Sigmaintell said BOE Technology Group Co Ltd－a leading Chinese supplier of display products and solutions－became the world"s largest shipper of LCD TV panels for the first time in 2019.

The Beijing-based company shipped 53.3 million units of LCD panels in 2019, with production capacity increasing by more than 20 percent on a yearly basis.

The consultancy said the LCD TV panel production area of Chinese manufacturers will account for more than 50 percent of the global total this year, surpassing South Korean competitors who are accelerating the shutdown of large-sized LCD panel production capacity due to competition from Chinese manufacturers.

It estimated the production capacity of large-sized LCD panels will continue to increase in China over the next three years. In addition, global LCD TV panel shipments stood at 283 million pieces last year, a slight decrease of 0.2 percent year-on-year. Meanwhile, the shipment area was 160 million square meters, an increase of 6.3 percent year-on-year.

"Chinese companies have gained an upper hand in large-screen LCD displays. Samsung and LG"s decision to exit from the LCD sector means Chinese panel makers will take a dominant position in this field," said Li Dongsheng, founder and chairman of Chinese tech giant TCL Technology Group Corp.

Li said South Korean firms will focus on organic LED screens and quantum dot LED displays, while Chinese TV panel makers are catching up at a rapid pace.

Data consultancy Digitimes Research said it comes as little surprise that Samsung has opted to withdraw from the LCD panel sector as its LCD business was losing money in every quarter of 2019 due to challenges from Chinese competitors.

BOE said its Gen 10.5 TFTLCD production line achieved mass production in Hefei, Anhui province, in March 2018. The plant mainly produces high-definition LCD screens of 65 inches and above. With a total investment of 46 billion yuan ($6.5 billion), the company"s second Gen 10.5 TFT-LCD production line launched operations in Wuhan, Hubei province, in December.

The Gen 11 TFT-LCD and active-matrix OLED production line of Shenzhen China Star Optoelectronics Technology, a subsidiary of TCL, officially entered operations in November 2018, producing 43-inch, 65-inch and 75-inch LCD screens.

Chen Lijuan, an analyst at Sigmaintell, said panel manufacturers should not just invest in production lines, but also pay more attention to the establishment of the whole supply chain, including raw materials, equipment and technology.

Bian Zheng, deputy director of research at AVC Revo, a unit of market consultancy firm AVC, said China will have a 51 percent market share in global TV shipments in 2020, while South Korea will have 25 percent, adding that large-screen TV panels will bolster healthy development of the industry.

Bian said the OLED and QLED will be the next-generation flat-panel display technologies to be in the spotlight. LG Display is currently the world"s only supplier of large-screen OLED TV panels.

OLED is a relatively new technology and part of recent display innovation. It has a fast response rate, wide viewing angles, super high-contrast images and richer colors. It is much thinner and can be made flexible, compared with traditional LCD display panels.

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