Is Visionox ahead of schedule?
The Chinese press has indicated that Kunshan, China based Visionox (pvt), known for its PMOLED[1] displays, has expanded its production at its Gen 5.5 production line, and now has reached its phase 2 goal of 15,000 sheets/month. The company has been producing 5.5” and 5” FHD and HD Displays, along with 1.2” circular and 1.45” AMOLED displays on a 5,000 sheets line previously. What makes this noteworthy, should it be confirmed as true, would be timing, as we had expected the phase 2 expansion (15,000) to be completed in September of 2018, and phase 3 (15,000) to be completed in September 2019. We do note that back in December 2016, Visionox signed a supply contract with SFA Engineering (056190.KS) for $93.5m worth of equipment and services for the expansion of the Visionox Gen 5.5 line, but with a scheduled delivery date of August 2017.
Both translation and hyperbole issues surround a number of smaller Chinese companies on a routine basis, making it a bit difficult to pinpoint the level of production at such companies, and Visionox is no exception, as the press seems to be quoting two company managers that stated, “In January (2017), the project has not yet formed such a scale, Nissan (poor translation of fab location or company name) can only 3,000, and now the Nissan (sic) can reach 15,000.” This seems to imply that the new 15,000 sheet/month line is in production, a few months ahead of the SFA equipment delivery date. Again, the quotes here could be referencing the actual capacity of the phase 2 expansion when completed, which is more likely the case. Further references included a total of 12 OLED lines, which would represent a full 30,000 sheet/month build out, at 2,500 sheets/month each, but no timeframe is mentioned for completion.
We do not update our OLED industry model without at least tacit confirmation that the Visionox fab expansions have been pulled forward by such a significant amount, although we do expect that the small lines are being added on an individual basis, so the reference to 15,000 sheets of additional capacity is likely to be added in 2,500 sheet increments, and the ramp time for each should be at least 6 months, While this could put some capacity at Visionox into production ahead of our estimates, we are cautious about making any major changes in scheduling. As it stands, even with the full phase 3 capacity build out, Visionox would represent slightly over 1.5% of OLED capacity in 2020.
[1] PMOLED – Passive Matrix OLED
Both translation and hyperbole issues surround a number of smaller Chinese companies on a routine basis, making it a bit difficult to pinpoint the level of production at such companies, and Visionox is no exception, as the press seems to be quoting two company managers that stated, “In January (2017), the project has not yet formed such a scale, Nissan (poor translation of fab location or company name) can only 3,000, and now the Nissan (sic) can reach 15,000.” This seems to imply that the new 15,000 sheet/month line is in production, a few months ahead of the SFA equipment delivery date. Again, the quotes here could be referencing the actual capacity of the phase 2 expansion when completed, which is more likely the case. Further references included a total of 12 OLED lines, which would represent a full 30,000 sheet/month build out, at 2,500 sheets/month each, but no timeframe is mentioned for completion.
We do not update our OLED industry model without at least tacit confirmation that the Visionox fab expansions have been pulled forward by such a significant amount, although we do expect that the small lines are being added on an individual basis, so the reference to 15,000 sheets of additional capacity is likely to be added in 2,500 sheet increments, and the ramp time for each should be at least 6 months, While this could put some capacity at Visionox into production ahead of our estimates, we are cautious about making any major changes in scheduling. As it stands, even with the full phase 3 capacity build out, Visionox would represent slightly over 1.5% of OLED capacity in 2020.
[1] PMOLED – Passive Matrix OLED
Visionox Production Factory in Kunshan - Source: Ofweek
RSS Feed