Shulou(Shulou.com)11/24 Report--

It is better than JDI to sell "son" to survive.

At the end of October, Dongshan Precision announced that it planned to buy JDI's 100% stake in Suzhou Jingduan for 20.5 billion yen (about 1 billion yuan).

JDI is well-known in the global display panel industry, founded by three Japanese electronics giants, Sony, Toshiba and Panasonic. In recent years, due to the complex business layout, weak operation, and increasingly fierce market competition, especially the pressure from Chinese competitors, JDI has to carry out strategic contraction to deal with some businesses that can not be fully taken care of.

Suzhou Crystal end is a wholly-owned subsidiary of JDI in China, which has been established for 26 years. Its main business is liquid crystal display, which is mainly used in the automotive field. Dongshan precision business covers electronic circuits, optoelectronic display and precision manufacturing and other areas, after the acquisition of Suzhou crystal terminal, will increase the vehicle display business.

At a time when the development of the new energy vehicle industry is in full swing, Dongshan Precision's "cross-border" acquisition intention is obvious, which aims to promote its new energy strategic layout and share the dividend of the new energy era.

"intellectualization" is the focus of competition in the second half of new energy vehicles, and vehicle display, as an intuitive embodiment of vehicle intelligence, is gradually developing in the direction of large screen and multi-screen, and the value of on-board display is much higher than that of traditional automobile era.

Just as the popularity of full-screen smartphones has spawned a number of panel display leaders, the continued rise in sales of new energy vehicles is driving up the prosperity of the on-board display industry. Vehicle display plays a more and more important role in the new energy vehicle industry chain. This paper attempts to answer three questions:

1. How did the car screen evolve into today's large-screen, multi-screen era?

2. How does China's on-board display industry rise?

3. Will China's on-board display industry get stuck?

On-board display: from no screen to large screen with the iteration of the car cockpit, on-board display has experienced a hundred years of evolution history.

In 1886, the world's first car powered by an internal combustion engine was born, not to mention a screen, not even a cockpit. Until the beginning of the 20th century, Ford transformed the T-car, the car cockpit entered the mechanization stage.

At this stage, the on-board display pays attention to the function, which is mainly used to reflect the operation status of all parts of the car body, which is reflected by all kinds of instruments, such as water temperature meter, tachometer and so on, but the "screen" we understand now has not yet appeared.

After the 1920s, the car cockpit opened the road of electronic, radio, tape recorder, tape and other entertainment equipment have "got on the bus" one after another. By the late 1970s, Aston Martin launched a model with three LCD screens to display dashboard information.

Overall, the biggest deficiency of these car screens is that they can only be seen and cannot interact with each other.

In 1986, the Buick Riviera model was equipped with a touch screen central control (CRT screen), which can control radio, audio playback, air conditioning and so on. The following year, Toyota equipped its top car crown with a small color display, a prototype of a "big car screen", which was extremely extravagant at the time, when Chinese families became popular with televisions.

Since 2008, capacitive screens with better display effect and touch feel have become more and more popular, and the integrated central control system has been formed in the form of "screen + physical buttons". Since then, the central control display screen has gradually become the mainstream, and gradually sank from luxury cars to entry cars.

The one who really subverts the car is Tesla.

In 2012, Tesla Model S's 17-inch LCD screen, while abandoning dozens of physical buttons, unprecedentedly strengthened the "central control" attribute of the car screen, ushering in a truly large screen era for civil cars. Later, the new energy car factories all touched Tesla across the river and tried their best to make a fuss on the big screen of the car.

One trend is bigger than bigger.

The most representative of the "bigger" contestants is Biden. At the 2018 Las Vegas International Consumer Electronics Show, Biden unveiled a concept car with a 48-inch oversized central control screen, known as a "walking TV," which may be the largest car screen to date.

Another trend in car screens is more and more.

For example, the ideal L9 has not only a 15.7in OLED screen for both the central control screen and the co-driver screen, but also a 15.7inch small TV on the roof of the car. There are five screens on the steering wheel, front and back. In addition, there are even seven screens in the concept models of other brands.

(source: head Leopard Research Institute) at present, it seems that according to the installation location, the vehicle display center control, instrument, rearview mirror, co-driver, rear row and head up display are currently dominated by central control and instrument.

Guotai Junan Securities Research Institute analyzed that the total area of vehicle display screen will increase 10 times in the next decade. At present, the total display area of a single car is about 300sq cm. It is estimated that the area of bicycle display screen will exceed 1600 sq cm by 2025 and more than 3300 sq cm by 2030.

The trend of large screen and multi-screen is not difficult to understand. in the wave of automobile intelligence, from the point of view of consumers, compared with self-driving, the intelligence of vehicle display is easier to be perceived.

China's on-board display industry: from weak to strong, there is also a lot of controversy caused by the large screen and multi-screen of the on-board screen, but at present, car intelligence is still in its infancy, and car factories should be allowed to carry out various explorations, and consumers can "vote with their feet."

There is no doubt that the prosperity of the vehicle display industry continues to improve. China accounts for the majority of global production and sales of new energy vehicles, and plays an important role in the global vehicle display industry. The rise of China's vehicle display industry is inseparable from the growth of China's display panel industry.

LCD (liquid crystal display) is the mainstream display technology in almost all fields at present. Although it originated in the United States, it did not achieve large-scale commercialization. On the contrary, a number of Japanese enterprises seized the opportunity to expand and strengthen the liquid crystal display industry. At its peak, Japan's LCD panel market share accounted for 94% of the world.

Samsung and LGD of South Korea made a large-scale counter-cyclical investment in liquid crystal display in the Asian financial crisis in 1997 to catch up with Japan. With the help of Japan, the liquid crystal display industry in Taiwan is also rising rapidly.

Before the 21st century, Chinese mainland's LCD panel industry was only in the stage of theoretical research and industrial exploration. Since 2000, Chinese mainland panel factories such as BOE, Shentian Horse and Huaxing Optoelectronics have continued to promote panel production line construction and core technology research and development, and gradually become a global leader.

It is in the context of the gradual maturity of the Chinese mainland display panel industry that panel manufacturers began to lay out the vehicle display business. Another big background is that the production and sales of cars in China are increasing day by day, especially the trend of new energy vehicles is developing towards big screen and multi-screen, strongly boosting the demand for on-board display, which is also the unique advantage of China's on-board display industry to catch up with other countries quickly.

Chinese vehicle display companies, represented by Deep Tianma and Jingdong Jingdian, have achieved a level of anti-surpassing of Japanese JDI and Korean LG every year.

In 2006, Shenzhen Tianma set up a vehicle R & D team, and opened an independent vehicle business production line in 2011. Between 2013 and 2020, shipments of Shen Tianma's on-board display screens rose from 3 per cent to 16 per cent of the global market share, ranking first in the world.

With the development of China's new energy vehicle industry, in 2021, Shen Tianma adjusted its development strategy and upgraded on-board display to the company's core business.

BOE entered the on-board display business late, but grew rapidly. In 2016, BOE holding Jingdian International (hereinafter referred to as BOE Jingdian) is currently the only vehicle display and system operation platform in the BOE Group system. Taking advantage of the global dominant position of JD.com 's square panel production capacity, the shipments of BOE Precision Electric's vehicle display screen have risen rapidly.

In 2017, BOE Jingdian only ranked 10th in the world in shipments, entered the top five in 2020, and second only to Shen Tianma in 2021, but in terms of shipping area, BOE accounted for the first in the world. Especially in large and medium-sized shipments, BOE Jingdian has obvious advantages, occupying more than 20% of the global market share.

Considering that the global automotive industry chain is undergoing profound changes, JD.com Fang Jingdian is also adjusting its strategy and its vision is to become an intelligent cockpit display assembly solution provider to bypass Tier 1 (first-tier supplier) to do business directly with the whole car factory and have a stronger say in the era of new energy vehicles.

China's on-board display industry still needs to "make up lessons". China's on-board display industry has become bigger, but it still needs more "make-up lessons" to be strong, especially to strengthen investment in some choking links, so as not to affect the development process of China's new energy vehicles.

The "weakness" of China's vehicle display industry has always been the "pain point" of China's display panel industry, mainly including core materials and production equipment, which are currently in the hands of a small number of international enterprises, so the degree of market competition in these two aspects is not high, resulting in the highest gross profit margin in the whole industry chain.

Among the upstream materials of LCD, only the backlight has achieved 90% localization, and the domestic production rate of the driver chip has also reached 50%, but the domestic production rate of liquid crystal material, polarizer and glass substrate is only 35%, 19% and 16%, respectively.

The technical barrier of glass substrate is deep, and there are few domestic production enterprises at present. Shanshan Co., Ltd. has improved its overall production capacity through the acquisition of LG Chemical's partial products and related assets.

In addition, with the vehicle display gradually over to OLED (organic light-emitting semiconductors), the organic light-emitting materials that occupy the main raw material cost are occupied by the United States Dow, Germany Merck, the United States UDC and Japan, the short-term replacement is extremely difficult, and it may have a greater impact on domestic car display panel enterprises in the future.

(source: head Leopard Research Institute) OLED panel manufacturing is divided into three main processes: backplane section, front panel segment, module segment. The production equipment needed for the three processes is monopolized by a small number of enterprises in countries such as Japan and South Korea, accounting for more than 70% of the market. In particular, the most critical evaporation machine, only one Japanese company can produce.

The technical requirements of the backplane section and the front panel stage are high, and it is difficult for Chinese enterprises to break through in a short time, so it is difficult to localize, which makes it difficult to reduce the upstream cost. In the module section, due to the maturity of domestic LCD technology and the small gap between LCD and OLED module equipment, part of the equipment can also be modified with LCD equipment.

Because the production equipment is expensive and the equipment technology is in the hands of international enterprises, China's OLED capacity is restricted and cannot be produced on a large scale like LCD. In the future, the share of OLED on-board display will grow rapidly, and the restriction of OLED production capacity in China will lead to the erosion of its market share by international enterprises.

(source: head Leopard Research Institute) in fact, there is a shortcut to break through the "neck" link, that is, to "spend money to buy" directly. Just like Shanshan's acquisition of South Korea's LG Chemical polarizer business, BOE also entered the LCD panel industry through the acquisition of a South Korean company. However, the road to acquisition may seem "easy", but it could be blocked at any time.

In the final analysis, China's vehicle display industry still has to start from itself, which also requires joint efforts of many parties. On the one hand, Chinese manufacturers of upstream materials and equipment need to increase investment and independent innovation; on the other hand, national macro policies can also be appropriately encouraged; in addition, downstream domestic manufacturers on the premise of ensuring product quality, we might as well take more care of the upstream domestic manufacturers so that they can find and solve problems in practical application.

references

[1] "the car is displayed as a" hot cake ", can you pry the recovery of the panel industry? China Electronic News

[2] "Jingdian: large-size vehicle display leader, automobile intelligent drive growth", Guojin Electronics

[3] "Research on vehicle display industry in automobile industry: vehicle screen meets rapid growth", Changjiang Securities

[4] "Overview of China's vehicle display Industry in 2021", head Leopard Research Institute

[5] "Analysis of the Competition pattern and key Enterprises of China's vehicle display Industry in 2021", Huajing Industrial Research Institute

This article comes from the official account of Wechat: che Bai think Tank (ID:EV100_Plus), author: Qin Haiqing

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