© saniphoto dreamstime.com Analysis | September 25, 2020
BOE to control 28% of global large-sized display panel capacity in 2021
After a period of back-and-forth negotiations, the sale of CEC Panda has finally materialised, as BOE formally announced on September 23 its plan to acquire an 80.831% share in CEC Panda’s Nanjing-based Gen 8.5 fab and 51% share in CEC Panda’s Chengdu-based Gen 8.6+ fab, according to TrendForce’s latest investigations.
The acquisition is expected to be in its final stages by now. After BOE’s B17 (Gen 10.5) fab began operating in 2020, the company now possesses about 21.1% of the global large-sized panel capacity. On the other hand, CEC Panda’s Nanjing-based Gen 8.5 fab and Chengdu-based Gen 8.6 fab collectively accounts for about 4.7% of the global total. As such, if the acquisition takes place successfully, BOE will possess more than a quarter of the global large-sized panel capacity, and this share is expected to further increase to 28% in 2021. Within the context of the global display panel industry, the acquisition will not only bolster BOE’s leadership position, but also increase its influence considerably. BOE will strengthen its market leadership while optimising its TV and IT product stacks TrendForce’s observation of various display products’ shipment volumes indicates that BOE is the shipment leader in product categories including TV, monitor, and notebook panels. Once CEC Panda’s Nanjing-based Gen 8.5 fab and Chengdu-based Gen 8.6 fab start contributing to BOE’s panel shipment, BOE is expect to raise its market share in the TV panel market from 18.5% to 23.3%. Similarly, BOE’s shares in the monitor panel market and notebook panel market will likely grow from 27% to 31.7% and from 27.3% to 31.5%, respectively, allowing the company to further its market share advantage over its immediate competitor. Given BOE’s long-term IPS R&D and CEC Panda’s focus on VA panels for TV, the acquisition is expected to both provide a complementary product portfolio for BOE and deepen its partnership with tier-one brands. In addition, CEC Panda’s Gen 8.6 fab will likely shore up BOE’s lack of 50-inch and 70-inch capacities, therefore expanding its TV panel offerings for those display sizes. In terms of notebook displays, both companies have been focused on IPS panels. However, whereas BOE’s notebook panels are for the most part based on a-si technology, CEC Panda’s offerings are primarily IGZO-based, giving them the advantage of low power consumption. Once again, the acquisition will allow BOE to compensate for its weaker presence in IT products, such as gaming notebook panels or low power consumption panels, with CEC’s IGZO offerings. On the other hand, BOE’s acquisition of CEC Panda will cause ripples throughout the display supply chain, since the latter has been operating in close partnership with TPV, which is the largest monitor OEM globally under the parent company CEC. As well, the future of CEC Panda’s Najing-based Gen 6 fab remains unclear, since its production lines contain mostly older equipment, and the fab mainly manufactures TN and VA panels. If the fab can be upgraded to produce IPS panels and curved VA panels instead, its production lines will be able to deliver more value going forward. BOE and CSOT will dictate the direction of China’s panel industry TrendForce believes that panel makers specializing in display panels with colorless substrates, led by BOE, will be the key to the Chinese panel industry’s expanded market share and market dominance, since these panel makers possess in-house technical and capacity advantages. Alternatively, some companies, including primarily CSOT, possess both technical competency in display panels and ample assistance from other brands under the same parent companies. Although BOE and CSOT’s respective business models each represent polar opposite strategies, they are expected to contribute to the Chinese supply chain’s control over the global display and panel industries.