In 2015, Samsung Display output 30 million notebook panels. Due to the factory reorganization plan, Samsung’s shipments of notebook computer panels will fall to 12 million units in 2016 and 4 million units in 2017.
Hewlett-Packard was the most affected and the supply obtained from Samsung Display in the second quarter has decreased by two-thirds.
BOE, Innolux, Sharp and AUO will benefit from it.
Apple is considering increasing Sharp as its panel supplier for the new MacBook Pro. Apple also plans to purchase 13.3’’ panels from BOE for its old MacBook Air.
Due to the rapid expansion of production capacity in China, LCD panel makers in South Korea have determined that LCD panels are no longer a lucrative business and therefore will bet on the OLED panel business in the future. Due to the lower profit margins and market growth of IT, panel makers first gave up the production of IT panels.
Samsung showed last year that it sold its L5 plant to Chinese touch and module manufacturers. Now they plan to stop another fifth-generation line factory, the L6, next year. Laptop makers had previously assumed that panel oversupply would become the norm, and because of the sluggish notebook market, they did not establish sufficient security stock. Samsung's sudden business change will likely lead to panel shortage in the third quarter of this year.
BOE's shipments may double this year
In 2015, Samsung Display output 30 million notebook panels. Due to the factory reorganization plan, Samsung’s shipments of notebook computer panels will fall to 12 million units in 2016 and 4 million units in 2017. In the second half of this year, there will be a gap of 18 million in the panel market. Brand manufacturers must take measures to purchase sufficient panels.
Hewlett-Packard was the most affected. Samsung's supply fell sharply from 1.1 million in the first quarter to 350,000 in the second quarter. HP has already transferred orders to other panel suppliers to ensure adequate panel supply.
Innolux achieved orders for 2.8 million HP panels in the second quarter of 2016, an increase of 58% from the first quarter.
BOE also benefits from the changes Samsung has demonstrated
BOE's total panel shipments increased from 4.9 million in the first quarter to 7.2 million in the second quarter. Dell, HP, and Lenovo’s panel had more than 1 million purchase orders in the second quarter. It can be said that every first-tier brand maker has boosted BOE panel shipment growth.
BOE plans to expand its notebook business in 2017 to more than 30 million, which is very close to Taiwanese company AUO. BOE began supplying notebook computer panels in
Panelists in Mainland China and Taiwan have the opportunity to expand their share in premium panel market
Lok Kim Display and Samsung Display have been supplying panels for Apple laptops; however, with the reorganization of their factories, especially the redistribution of oxide production capacity, Apple is increasingly concerned about panel supply stability.
According to reports, Apple is considering increasing Sharp as a supplier of its new MacBook Pro panels in response to Samsung's risk of changing its business plan again. And thanks to corporate mergers, Foxconn and Sharp can provide Apple with more price-advantageous panels. In the old MacBook Air, Apple decided to purchase 13.3” panels from BOE. This is the first time Apple has purchased LCD panels from Chinese manufacturers.
The Samsung Display's exit from the LCD business also affected the IPS/PLS. Samsung Display is one of the major suppliers of wide viewing angle panels, second only to the Le Jin display. In order to avoid Le Jin display becoming the sole supplier of IPS/PLS panels, brand manufacturers need to look for other suppliers to cope with Samsung's display to reduce the risk of producing IPS/PLS panels.
AUO is one of the qualified candidates, and it is clear that they have received more and more orders from the brand. According to the IHS Markit survey, AUOIPS’ market share in the second quarter was 17%, and by the fourth quarter it was expected to reach 19%, surpassing Samsung’s display.
In the absence of this panel, AUO did not attempt to increase market share, but instead planned to change its product portfolio to focus on the production of profitable products. IPS and TOD (touch on the display) are a great opportunity for AUO.