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Taiwanese panel makers pushing to strengthen supply chains for both Chinese and non-Chinese customers, according to DIGITIMES Research

Joseph Tsai, DIGITIMES Asia, Taipei 0

Credit: DIGITIMES

Taiwan-based panel makers have been keen on establishing plants in emerging markets, concerned that the intensifying geopolitical tensions could lead to the decoupling of the supply chain, and panel makers' existing capacities in China remain an important supply source to Chinese automakers, according to DIGITMES Research analyst Jason Yang.

Taiwanese panel makers' development for their automotive display business for the near future is expected to focus on running two separate supply chains: one for Chinese customers and one for European, North American, and Japanese customers.

With China already becoming the world's largest automotive and electric vehicle (EV) market, Taiwanese panel makers will still need to maintain their presence in China for growth.

China's private carmaking enterprises are only experiencing a limited influence from the tensions between the US and China. They are more willing to adopt integrated smart cockpits and emerging display technologies, which will benefit Taiwanese panel makers to strive for orders.

Because of this, China-based panel makers have been learning keenly from their Taiwanese competitors by establishing a similar system-integrated supply chain and R&D of emerging technologies such as miniLED backlighting and in-cell touchscreen. Taiwanese makers need to stay vigilant with the rise of their Chinese competitors.

Aside from the supply chain and technologies, Taiwanese makers have also been conservative in capacity expansion in the past few years, and such a strategy may need to be adjusted as expanding or re-organizing their capacities is likely to become necessary soon with the gradual increase of the automotive market.

European and North American automakers have eyed South and Southeast Asia markets as new growth drivers and are building assembly lines in South Asia. With countries in the regions also keenly nurturing local automakers, overall automotive panel demand is expected to rise.

Most panel makers are considering establishing backend module production lines in South Asia, but Taiwanese makers' related schedules compared to the ones planned by Chinese makers are late.

Since the Indian government is hoping to have local panel production capacity, Innolux has signed technology-transfer contracts with an Indian enterprise for setting up an 8.6G production line.

With the completion of the facility, the Indian government may raise the tariff on semi-completed (front-end) panels, resulting in a benefit drop in Chinese makers investing in backend module production lines in India.

Chinese panel makers

Amongst Chinese panel makers, BOE has the most capacity and owns 11 LCD production lines, four AMOLED production lines, and one micro OLED line.

Tianma's automotive panels are made using its a-Si production lines, including three 4.5G lines and one 5G line. The company is also looking to establish new 8.6G lines for producing automotive panels, but the volume production is unlikely to happen until 2026-2027 with all certifications and inspections.

HKC only started the automotive display business not long ago and only manufactures related panels in China's Mianyang. Meanwhile, CSOT mainly produces automotive panels using high-end technologies such as in-cell touch panels and miniLED backlighting and is making them at the production lines in Wuhan, China.

Smaller Chinese panel makers such as Infovision Optoelectronics (IVO), Laibao Hi-Tech, Truly, and Mantix have also devoted some of their capacities to the automotive display business, but their supply is still limited.

BOE automotive panel technologies and capacity in China (k units)

Technology

Location

Generation

Monthly capacity

Note

a-Si TFT LCD

Chengdu, Sichuan

4.5G

45

Self-owned, high-end module production base newly established by subsidiary Varitronix International

Hefei, Anhui,

8.5G

90

Self-owned

Nanjing, Jiangsu

60

Acquired from Panda Crystal Technology

LTPS TFT LCD AMOLED

Ordos, Inner Mongolia

5.5G

60

Self-owned

Source: BOE; compiled by DIGITIMES Research, December 2023

Tianma automotive panel technologies and capacity in China (k units)

Technology

Location

Generation

Monthly capacity

Note

a-Si TFT LCD

Pudong, Shanghai

4.5G

50

Self-owned

Chengdu, Sichuan

30

Wuhan, Hubei

Minhang, Shanghai

5G

80

Acquired from SVA

Xiamen, Fujian

8.6G

120

Self-owned, scheduled for volume production in 2H24

LTPS TFT LCD

5.5G

30

Self-owned

Source: Tianma; compiled by DIGITIMES Research, December 2023

About the Analyst

Jason Yang, MSc. in physics at the National Central University, Taiwan, has previously worked as an R&D engineer at Quanta Display. His research areas include small-sized display technologies, automotive display technologies, and emerging display technologies (e.g. AMOLED).

Jason Yang