TCL Sees Panel Orders From Huawei Rivals Balloon as Giant Flounders

TCL’s panel-making unit has seen an uptick in new orders from smartphone-makers looking to seize some of Huawei Technologies’ global market share as the wounded Shenzhen giant flounders.

Jin Xuzhi, CEO of TCL China Star Optoelectronics Technology Co. Ltd. (CSOT), said Tuesday that a number of leading Chinese phone-makers have been stockpiling screens since August. Meanwhile Huawei, which last year was the company’s second-largest client with orders worth 2.8 billion yuan ($419 million), slashed its orders.

The major panel-maker supplies smartphone screens to brands including Xiaomi, Oppo, Vivo and Huawei, which was the world’s largest phone manufacturer for the first time in the second quarter.

But Huawei has reduced its orders since the U.S. in August unveiled the harshest sanctions yet on the telecom-gear maker, choking off its access to crucial chips.

Domestic rivals have rushed to scale up their smartphone shipments to clinch greater market share. Oppo aims to deliver 110 million handsets in the second half of the year, bringing its annual shipments to 170 million. From 2017 to 2019, Oppo shipped about 110 million devices globally each year, according to data from research firm IDC.

The growing demand from Huawei challengers has helped CSOT avoid having to idle any of its capacity, according to Jin.

Founded in 2009, CSOT is primarily engaged in producing panels for televisions, commercial displays, computers and smartphones. It has factories in several Chinese cities and opened its first Indian plant last year in the southeast state of Andhra Pradesh.

It took control of a liquid crystal display (LCD) factory in Suzhou from Samsung in a $1.08 billion deal in August, as its parent company seeks to shore up its position in the industry. In May, TCL Technology Group Co. Chairman Li Dongsheng expressed the company’s interest in acquiring more panel manufacturing projects.

Rival panel-maker BOE Technology Group Co. Ltd. announced last month that it plans to bid for two Chinese LCD production facilities being sold by CEC Panda as the domestic sector rapidly consolidates around three major players: BOE, CSOT and Tianma Microelectronics.

Contact reporter Anniek Bao (yunxinbao@caixin.com) and editor Joshua Dummer (joshuadummer@caixin.com)

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