Securing the dominant position in the large-to-medium size LCD market

Release time:

2025-11-25

As a renowned expert in liquid crystal physics, Ouyang Zhongcan – a member of the National Committee of the Chinese People's Political Consultative Conference and an academician of the Chinese Academy of Sciences – naturally focuses on the development of the liquid crystal display industry. This year, he submitted a proposal advocating for ‘supporting leading domestic enterprises to seize the high ground in the production of medium-to-large-sized LCD television screens, thereby promoting the advancement of China's new display industries during the Twelfth Five-Year Plan period,’ championing the cause of the new display sector. 　　

He stated that upgrading the flat-panel display industry can drive the development of multiple industrial clusters, directly impacting China's overall economic competitiveness. The flat-panel display sector is not only a multi-hundred-billion-yuan industry in its own right but also integrates numerous technologies such as microelectronics, optoelectronics, materials science, manufacturing equipment, and semiconductor engineering. Spanning industries including chemicals, materials, and semiconductors, its advancement can stimulate growth across multiple industrial clusters, directly influencing China's comprehensive economic competitiveness. 　　

Guided by the State Council's sound policy on developing strategic emerging industries and bolstered by substantial state funding, China's flat-panel display sector has risen rapidly, exemplified by enterprises such as BOE (Beijing/Hefei), CSOT (Shenzhen), Longteng (Kunshan), Tianma (Shanghai), and Nanjing Panda. However, the debt crises in the US and Europe have led to declining sales of LCD televisions in Western nations and Japan, placing the global flat-panel display industry in a complex competitive landscape. 　　

According to Ouyang Zhongcan, Japan's Sharp Corporation incurred a net loss exceeding ¥200 billion in 2011. Consequently, from 2012 onwards, leveraging its globally unique 10th-generation LCD production line, Sharp will focus on sales of ultra-large LCD televisions ranging from 60 to 80 inches. In the North American market, Sharp commanded a global share of 41.9% for 60-inch and larger models in 2011, far surpassing second-placed LG (16.9%) and third-placed Samsung Electronics (13.6%). By late 2011, to capture demand for small-to-medium-sized flat-panel displays driven by Apple's iPad and iPhone, the Japanese government invested US$2.5 billion (holding a 70-80% stake) under the Corporate Innovation Alliance framework. This facilitated the establishment of a new company by Hitachi, Sony, and Toshiba to produce the world's largest small-to-medium-sized LCD touchscreens and OLED displays. 　　

In 2011, South Korea's Samsung and LG also suffered substantial losses in their LCD businesses. Consequently, the government's Display Industry Trends and Response Plan designated the replacement of LCD with organic light-emitting diode (OLED) technology as a development priority. The government invested 85 trillion won to facilitate the process conversion to 5.5-generation AMOLED panels and the development of core organic materials. LG has already invested US$3.56 billion in OLED technology advancement. Reports indicate Samsung will establish a new company, Samsung Display, with a $6.5 billion investment on 1 April to accelerate OLED's overtaking of LCD. 　　

Driven by the Home Appliance to the Countryside programme, China's medium-to-large television market has enjoyed exceptional growth. Ouyang Zhongcan provided the following figures to reporters: by November 2011, cumulative sales of products under the programme reached 210 million units, with sales revenue soaring to 487.4 billion yuan. In 2011, Chinese television manufacturers saw a sharp increase in profits. For instance, Hisense Group's net profit growth surged from 48.20% in the third quarter of 2010 to 75.10% in the third quarter of 2011. Konka Group's profit margin improved from -60.90% to 199.10%, while TCL Group's margin rose from -30.50% to 658.50%, reflecting substantial profit margin enhancements. In 2011, domestic colour television retail sales reached 41.83 million units, representing a 4.5% year-on-year increase. Among these, liquid crystal televisions accounted for 36.83 million units, marking a 10.6% year-on-year growth.

However, Ouyang Zhongcan contends that, given both domestic and international development trends, China's liquid crystal display industry must adopt a strategic approach, focusing its primary efforts on medium-to-large screen sizes. To this end, he recommends: 　　

Firstly, to expand China's TFT-LCD industry, relevant government departments should continue supporting leading enterprises such as BOE and CSOT through tariff policies and bank financing. This will enable them to strengthen and scale up domestic 6th to 8.5th generation LCD production lines. Leveraging a competitive domestic market position, they should avoid competing with Sharp in the ultra-large size segment and instead concentrate on developing medium-to-large size (27 to 55-inch) LCD displays, allowing China's LCD industry to achieve a later-comer advantage. 　　

Secondly, policy protections for domestic enterprises should be strengthened to prevent Japan and South Korea from relocating their outdated LCD production lines to China. During the Twelfth Five-Year Plan period, no further approvals should be granted for overseas LCD manufacturers to establish factories on the mainland. Comprehensive safeguards—including policy and tax incentives—must be implemented to nurture the nascent domestic industry, thereby laying a solid foundation for Chinese enterprises to seize the high ground in next-generation display technologies.

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Production Process of Liquid Crystal Modules