The core driving force of OLED is it!

Some time ago, two important events in the LED display industry caused great concern in the industry. The first one was the successful trial of the 6th generation LTPSAMOLED production line of Wuhan Tianma. This line has both rigid and flexible production capacity.

The second is that the 6th generation AMOLED production line of BOE Chengdu has been officially lighted recently. The production capacity of the production line is 48K/month. It is the first AMOLED production line in China to adopt the HalfG6 evaporation process.

In addition, the iPhone8, which is scheduled to be released in September this year, will adopt OLED screens on a large scale, and the demand for OLED mobile application terminals is expected to be released quickly.

The industry believes that as domestic manufacturers begin to actively deploy the OLED field, the OLED industrialization process is accelerating.

Domestic manufacturers actively layout

OLEDs, or organic light-emitting diodes, also known as organic electro-laser displays, are widely used in mobile phones, digital video cameras, notebook computers, automobiles, and televisions. From the current global OLED panel supply pattern, OLED as the "next-generation display technology" originated in Europe and the United States, but the large-scale industrialization is mainly concentrated in East Asia, of which South Korea's 2016 AMOLED panel sales reached US$14.2 billion, accounting for 96 worldwide. % market share, related manufacturers mainly include Samsung and LG.

With the improvement of domestic technology and the acceleration of the industrial chain process, domestic manufacturers have begun to actively deploy OLED fields. On May 12, BOE announced that the first sixth-generation flexible AMOLED production line in Chengdu was officially put into operation on the 11th, marking the acceleration of the localization of China's OLED industry. As the leading panel company in China, BOE adopts LTPS/AMOLED technology in the 6th generation AMOLED production line in Chengdu, including array, color film, box, OLED evaporation, packaging, touch integration, module and other production processes.

The glass substrate has a size of 1850mm×1500mm and a design capacity of 45K/month. It mainly produces high-end mobile phone displays and emerging mobile display products.

In addition, at the SID2017 conference on May 23-25, BOE demonstrated a variety of flexible AMOLED displays that can be mass-produced on the line, including a 5.5-inch WQHD flexible OLED display and a 4.35-inch flexibility. Wrist strap display products, etc.

With the Chinese manufacturers represented by BOE actively expanding the OLED production line, the monopoly market pattern of the supply end of the OLED panel will be gradually broken. In the next 3-5 years, the domestic production capacity is expected to enter a rapid release period. According to IHS forecasts, by 2020, Chinese manufacturers' OLED panel market share will increase to 20%.

Future application

Currently, Apple has signed a two-year supply agreement for small-size OLED panels with Samsung. Samsung will supply 70 million pieces - 92 million small-size OLED panels to Apple in 2017 for iphone8 models. The Apple iPhone 8 adopts an OLED screen, which will drive the penetration of OLEDs in smartphones to a rapid increase; on the other hand, it will also facilitate the optimization and adjustment of the panel industry.

In 2017, iphone8 will be exclusively supplied by Samsung, but in the future, Apple is bound to cultivate a supply chain other than Samsung. Domestic panel makers are facing development opportunities and the OLED industrialization process will accelerate.

It is worth mentioning that the large-scale adoption of OLED screens by Apple will form a demonstration effect to further stimulate the demand for OLED mobile phone applications. For example, Huawei, OPPO, VIVO, Xiaomi and other domestic mobile phone manufacturers will follow the Apple technology route to increase OLED product purchases. As domestic mobile phone production accounts for more than 50% of the global market, domestic mobile phone OLED panel shipments will expand rapidly.

In addition to smartphone screen applications, OLED applications are vast and require a lot of space in the future. OLEDs have greatly expanded their applications with their excellent features such as active illumination, high contrast, thinness, wide viewing angle and curved panels. In addition to smartphones, OLEDs will also be widely used in wearable smart devices, such as smart watches, applications. Solve equipment stun problems in the VR field, apply to TV screens instead of LCD TVs, and in areas such as computers and smart cars. Demand for the future will grow rapidly. It is estimated that OLED shipments will reach 890 million units in 2020, with a compound annual growth rate of 20.18%.

At present, Samsung's AMOLED production capacity is only 300 million pieces in 2017, and it can only support the Samsung Galaxy series and Apple customers' demand of about 50 million units in 2017. Therefore, domestic manufacturers are facing tight production capacity or even unable to get goods. Other mobile phone manufacturers Encourage more panel makers to deploy OLED production capacity through the advance payment or the first installment, or expand the capacity investment of existing OLED manufacturers, accelerate the expansion of panel manufacturers and increase equipment investment.

In the next two or three years, the industry situation in short supply will continue. In addition, the fire broke out in the Samsung panel factory on May 9, and the assembly line power and chemical materials were affected. The fire will not affect the production capacity of Apple, but it may affect the short-term. The supply of domestic brands has further aggravated the tight supply situation of OLED panels, and OLED panel quotations are likely to remain high.

Advance in the field of upstream materials and equipment

The accelerated industrialization of OLEDs and the rapid growth of terminal demand will drive the rapid expansion of the entire industry chain, including upstream raw materials and production equipment, midstream panel manufacturing and module assembly, and downstream display applications (smartphones, consumer electronics, automotive electronics and Smart wear, etc.).

First of all, upstream materials and equipment are the first to benefit, and domestic production capacity has great potential. From the field of raw materials, the upstream materials of OLED mainly include cathode, anode, transmission layer material and luminescent layer material. Among them, the material of the transmission layer and the material of the luminescent layer are different from those of the LCD, and are new. As a field with high technical barriers, upstream materials are mainly monopolized by European, American, Japanese and Korean manufacturers. For example, small-molecular luminescent materials, Japanese and Korean manufacturers account for about 80% of the market.

At present, China's material manufacturers mainly produce intermediates and monomer crudes of OLED materials. According to IHS data, the material cost of AMOLED panels is 7.2 US dollars. Assuming that China's 400-500 million annual smartphone shipments are calculated, the market for OLED materials will be about 20 billion yuan in the future.

From the perspective of production equipment, Japanese manufacturers Tokki and Ulvac are absolutely leading in the field of evaporation equipment. The US 3m, SEIKO, SUSS and other companies have obvious advantages in development and test equipment, while domestic display module equipment technology and manufacturing level are close to international advanced. Enterprises are expected to take the lead in breaking the monopoly of foreign equipment in the field of high-end automatic modular equipment in China.

As the newly invested AMOLED production line is put into production, the production equipment field will continue to benefit. In the next three years, the market capacity of COG equipment will be 5.8-8.7 billion yuan, with an annual average of 1.9-2.9 billion yuan; the FOG market capacity will be 233-3.4 billion yuan, with an annual average of 800-1.1 billion yuan; the market capacity of AOI equipment is 8- 1.1 billion yuan, an average of 1.9-2.9 billion yuan per year; the market capacity of laminated equipment is 47-70 billion yuan, with an average annual income of 1.6-2.3 billion yuan.

Secondly, the construction of domestic production lines is accelerating, and the market for panel manufacturing in the middle reaches is broad.

On the one hand, from the patent technology, domestic manufacturers have already possessed key technologies in the fields of device structure, process and materials through purchase and independent research and development, which will become a strong support for mass production in the future; on the other hand, from the investment layout, In 2016, companies such as BOE, Shenzhen Tianma, Guoxian Optoelectronics, and Xinli Optoelectronics accelerated the layout of OLED panel production lines. According to WitsView, the proportion of OLED production capacity of Korean panel makers will fall from 76% in 2016 to 76% in 2018. Under the abundant capital advantage, Chinese panel makers are expected to increase the production capacity from 4% to 19%. There is huge room for capacity expansion.

As of 2016, China's OLED panel production capacity is less than 0.1% of global production capacity. However, with the follow-up of technology and capital assistance, the mid-stream enterprises with good development momentum in the OLED industry chain are expected to accelerate into the global OLED panel market of more than 15 billion US dollars, which will eventually form a supply and demand resonance with the strong demand of OLEDs. Great flexibility in performance.

Finally, downstream diversified application needs are the long-term core drivers of the industry chain. In addition to smartphones, OLEDs still have significant growth potential in television, automotive and aerospace, wearables, and industrial applications.

AMOLED's high contrast, wide color gamut, and large viewing angle can significantly improve the display effect and user viewing experience, making the screen lighter and thinner, and will become the mainstream display for tablets, computers, and televisions in the future; OLEDs can satisfy cars, LCDs, Aerospace electronics' high performance and environmental adaptability requirements.

According to IDTechEx, the OLED market has a compound annual growth rate of about 40% between 2015 and 2025. AMOLED's high refresh rate, low latency and flexible screen can reduce user vertigo, making it an ideal display choice for VR and wearable devices.