The Zhitong Finance App learned that SDIC Securities released a research report indicating that on the demand side, the penetration rate of OLED panels in smartphones is gradually increasing, and penetrating from high-end models to mid-range and low-end models is accelerating. According to Omdia data, from 2014 to 2022, the global AMOLED panel shipping area for mobile phones increased from 1,227,800 square meters to 5.916,500 square meters, with a compound growth rate of 21.72%.

In the mid-size sector, Apple is expected to launch OLED tablets and laptops in 2024 and 2026, and the penetration rate of medium-sized OLEDs is expected to continue to increase. In this context, BOE announced on November 29, 2023, that it plans to invest in the construction of the 8.6th generation AMOLED project, with a design capacity of 32,000 pieces/month, focusing on mid-size OLEDIT products. The total investment of the project is 63 billion yuan. The construction period is about 34 months, bringing new demand for upstream equipment and materials.

Production capacity is concentrated at the top, the supply and demand pattern has improved drastically, and the LCD panel cycle has resumed. Through years of intense competition, global LCD production capacity is mainly concentrated among mainland Chinese manufacturers. According to Lotu Technology data, mainland China's global market share in the LCD TV sector in 2022 was 66.9%, and in 2023, the market share was 68.7%, an increase of 1.8 percentage points, setting a new record high. In the context of the expansion of production capacity of mainland Chinese manufacturers, Korean companies have basically sold out their LCD production capacity and invested in the OLED sector.

According to WitDisplay, LGD's Guangzhou factory sales plan is being accelerated. Negotiations will be held with BOE, Huaxing Optoelectronics and Skyworth on 24H1. If Chinese manufacturers successfully acquire LGD's Guangzhou factory, the market share of Chinese LCD panel manufacturers in 2025 (based on production volume) will reach nearly 80%. The voice of leading domestic companies has increased markedly. TV panel prices have continued to rise since the end of January 2024. The latest data from TrendForce is showing that from the end of March to April 8, 55-inch LCD_TVs have continued to rise by an average of 1 dollar since February It has risen continuously by $4.

LCD is highly competitive in the TV field, and OLED has an advantage in the lightweight and portable IT field. LCD technology is based on the photoelectric properties of liquid crystal molecules, has low energy consumption, is relatively superior in terms of production costs and large-scale production, and is widely used in various devices such as televisions, displays, mobile phones, and tablets. OLED technology is displayed through a layer of organic material that emits light and can produce high-contrast images. LCD technology is mature, production costs are lower, and extremely competitive in the field of large sizes. Unlike LCD, OLEDs do not require backlighting, so they can be made thinner and can achieve a larger viewing angle and higher contrast. They are ideal for high-quality video and dynamic image scenarios, and are the first choice for smartphones, high-end TVs, and wearable devices.

According to Omdia data, TVs accounted for 72.1% of LCD downstream products in 2022, followed by displays, accounting for 12.3%, OLED downstream smartphones accounting for 75%, followed by smartwatches, accounting for 18%.

Investment advice: It is recommended to focus on BOE (000725.SZ), TCL Technology (000100.SZ), Rainbow (600707.SH), Shentianma (000050.SZ), Vicino (002387.SZ), Olaide (688378.SH), and Wright Optoelectronics (688150.SH).

Risk warning: Market competition intensifies; downstream demand falls short of expectations; new product development and introduction falls short of expectations.