The Zhitong Finance App learned that CICC released a research report stating that OLED, or organic light-emitting diode, is currently one of the mainstream screen display technologies. OLEDs use organic semiconductor materials that can emit light when driven by electric current, and have the characteristic of emitting light independently of each pixel, and are widely used in various display screens such as smartphones, tablets, car displays, and televisions. The bank believes that as demand growth brought about by OLED performance advantages gradually spreads to the full-size sector, and the supply-side domestic production capacity layout is gradually improved, OLED is expected to further increase its penetration rate in various size application scenarios, and at the same time promote the localization and replacement process in the middle and downstream of the OLED industry chain.

The main views of CICC are as follows:

OLED application space is broad, and downstream demand combined with high-generation production capacity layout boosts OLED technology's penetration into the medium and size sector. The penetration rate of OLED in medium-sized products is increasing, and OMDIA predicts that the overall penetration rate of OLED in notebook computers is expected to reach 14% by 2028. As major consumer electronics manufacturers successively launch mid-size products equipped with OLEDs and domestic manufacturers lay out high-generation production lines, the bank believes that local panel manufacturers are expected to establish competitive advantages in the OLED medium size field, driven by demand and supported by domestic production capacity layout, while driving growth in the domestic industry chain share.

OLEDs have been widely used in small-size fields. In the short term, with the recovery in downstream demand, the boom has picked up, and there is still room for improvement in long-term penetration. Compared with other display technologies, OLED technology has obvious advantages in color performance, flexible display, etc. Currently, it is mainly used in smartphones, and is mainly concentrated in high-end products. The bank believes that in the short term, the recovery in downstream demand will drive a steady recovery in OLED prices; in the long run, as OLED process technology matures and the supply chain localization process progresses, product costs are expected to drop further, and there is still room for improvement in the penetration rate of small-sized OLEDs.

There is broad scope for domestic replacement in the upstream industrial chain. Technological progress is compounded by an increase in the share of local midstream panel manufacturers, and there is great potential for upstream equipment and materials manufacturers in the domestic OLED industry chain. The upstream OLED industry chain involves equipment such as lithography equipment, evaporation equipment, testing equipment, etc., as well as materials such as organic materials, mask plates, and driver chips. Currently, key upstream OLED equipment and materials are still dominated by overseas manufacturers, and there is plenty of room for localization. With domestic technological breakthroughs and the increase in the share of domestic midstream panel manufacturers, the bank believes that in the fields of some mid-stage equipment, organic terminal materials, mask versions, and driver chips, some domestic manufacturers are expected to gradually break through the monopoly of overseas manufacturers.

risks

Downstream demand recovery fell short of expectations, technological iteration and product development progress fell short of expectations, industry competition intensified, price fluctuations exceeded expectations, and industrial chain localization fell short of expectations.