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)
a-Si TFT LCD
Self-owned, high-end module production base newly established by subsidiary Varitronix International
Acquired from Panda Crystal Technology
LTPS TFT LCD AMOLED
Ordos, Inner Mongolia
Source: BOE; compiled by DIGITIMES Research, December 2023
Tianma automotive panel technologies and capacity in China (k units)
a-Si TFT LCD
Acquired from SVA
Self-owned, scheduled for volume production in 2H24
LTPS TFT LCD
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).