Caixin
Dec 21, 2017 07:29 PM
BUSINESS & TECH

BOE Makes Big Bet on Big Screens

BOE Technology Group Co. Ltd.'s new production line in Hefei, Anhui province, will be able to manufacture up to 120,000 LCD screens a month. Photo: Visual China
BOE Technology Group Co. Ltd.'s new production line in Hefei, Anhui province, will be able to manufacture up to 120,000 LCD screens a month. Photo: Visual China

The world’s first production line for 10.5-generation LCD screens has started running in China.

BOE Technology Group Co. Ltd.’s 45.8-billion-yuan ($6.95 billion) facility, built in Hefei, Anhui province, will have a monthly capacity of 120,000 LCD screens, most of which will be used in televisions that are 65 inches or larger. Screens from the factory are expected to hit the market early next year.

BOE’s move comes seven years after Japanese electronics-maker Sharp Corp. opened its 10th-generation LCD production line, the most advanced in the world at the time.

According to industry standards, the higher generation the production line, the larger displays it can produce. For example, a 10.5-generation production line can create 150-inch LCD screens. By comparison, 130 inches is the maximum screen size that can be made at a 10th-generation production line.

The facility’s opening comes at a time when sales of television sets have fallen to the lowest level in years in China.

To reverse the trend, TV-makers — who have also seen their profits plummet — have changed their focus to what they call the “Big Plan” — a strategy that puts an emphasis on more-promising products with larger screens.

People in the industry have said this could be good news for upstream suppliers, especially BOE, which has identified large panels as its core competency.

“Currently, there is only one 10.5-generation line in the world, which means that large panels will be in high demand,” said Zhang Yu, BOE’s vice chairman.

Likewise, industry executives have also become increasingly optimistic about the industry.

“Currently, 55-inch and larger panels account for 42.7% of the TV market. That figure will continue to rise next year,” said Liu Junguang, deputy chairman of the Greater China division of Samsung Electronics Co. Ltd.

For the Hefei facility, BOE has secured orders from foreign and domestic clients, including Samsung, LG Electronics Inc. and Hisense Electric Co. Ltd., according to the company.

The aim of Shenzhen-listed BOE for higher-generation production lines partly reflects the central government’s ongoing efforts to move up the value chain in the panel industry, which has long been dominated by Japanese and South Korean companies.

BOE is currently building another 46-billion-yuan 10.5-generation production line in the city of Wuhan in Central China. BOE plans for the line to start mass production in 2020.

Contact reporter Mo Yelin (yelinmo@caixin.com)

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