BOE Tidbits
Conversations with Chinese display producers can be challenging both in that they are careful to choose which questions they answer, and those answers they do give can be quite difficult to decipher as wording is carefully chosen. That said, even with carefully chosen wording, Chinese panel producers are usually proud to discuss progress that is being made on fab capacity or new projects that project the company in a positive light and through these conversations and Q&A sessions, we can grab a few tidbits about the working of the display space on the Mainland.
BOE (200725.CH), as the largest of the Chinese panel producers has a number of projects at various stages across its swath of fabs, R&D centers, and other production lines, which are in a constant state of change, and those changes are of great importance to BOE’s supply chain. We recently noted that Corning (GLW) had officially opened its 6th glass plant in China, this one being in Wuhan on the site of BOE’s Gen 10.5 LCD fab, and is the primary (and likely sole) supplier of substrate glass to that fab, as local glass producers in China tend to be reliable for glass sizes up to Gen 6. The fab itself is in the process of its phase 2 expansion, which BOE expects to be completed this month, giving the fab a stated capacity of 120,000 sheets/month, which should be reflected in Corning’s volumes going forward. We note that a 30,000 sheet/month increase in capacity at this plant (Gen 10.5) consumes 80.1% more glass surface area than a 30,000 sheet/month expansion at a Gen 8.5 LCD fab, so the impact of such an increase is significant to any supplier that works with BOE on an area basis (glass, LCD materials, backplane, et.).
BOE is also in what it calls ‘ramp-up’ mode at its B7 Gen 6 OLED fab in Chengdu and its B11 Gen 6 OLED fab in Mianyang, both of which are in production but are expanding capacity, and the company is developing another Gen 6 OLED fab in Chongqing, which is currently under construction. While the two OLED expansions are proceeding ‘smoothly’ according to the company, the Chongqing fab, when the construction is completed, will begin ramp-up mode and be ’carried out according to customer needs’, which are ‘climbing’. We expect this to be a reference to Apple (AAPL) and its quest to further diversify its OLED display supplier list, which now consists of Samsung Display (pvt) and LG Display (LPL), with BOE providing relatively small volumes, primarily for screen replacement. As we have noted, BOE is trying to become a full-scale supplier to Apple’s OLED smartphone production, but has faced difficulties in maintaining yields comparable to others. We expect the Chongqing fab is intended to prove to Apple that BOE is capable of becoming a primary supplier.
BOE expects to increase its shipments of flexible OLED displays by more than 100% this year, but much will depend on the Gen 6 fab ramps and demand from customers other than Huawei (pvt), who has been facing extreme component and semiconductor shortages due to US sanctions. Last year Huawei released 32 smartphone models with OLED displays. This year they have released 7 to date, which makes it incumbent on BOE to broaden its OLED customer base in order to meet its goal.
BOE is also developing a 12” silicon substrate line for the production of ultra-high resolution AR/VR displays to complement its existing 8” line from which it says it has shipped both ‘fast LCD’ and micro-OLED displays, however while the company has shown demos of silicon-based OLED AR displays at shows over the years at high resolutions, we have yet to see any actual product above 5,644 ppi, although the company says they have a number of sizes under development. In terms of micro-LED BOE says they are mass producing a 75” COG (Chip-on-Glass) micro-LED panel, although we believe it is a modular component that can be assembled into a larger system.
As noted, BOE is very aggressive in terms of growing its capacity, not only in display production but in a number of associated areas, albeit most associated with BOE’s LCD or OLED capacity in some way, yet as always in the CE space, much is done with smoke and mirrors. Non-specific measurements are the stock and trade of panel producers and are helped by rags whose headlines often read, “…expanding capacity…” only to find out that the company mentioned is ‘considering expanding capacity if customer demand warrants the expansion and capital can be secured…’ That’s why analysts have grey hair at an early age.
BOE (200725.CH), as the largest of the Chinese panel producers has a number of projects at various stages across its swath of fabs, R&D centers, and other production lines, which are in a constant state of change, and those changes are of great importance to BOE’s supply chain. We recently noted that Corning (GLW) had officially opened its 6th glass plant in China, this one being in Wuhan on the site of BOE’s Gen 10.5 LCD fab, and is the primary (and likely sole) supplier of substrate glass to that fab, as local glass producers in China tend to be reliable for glass sizes up to Gen 6. The fab itself is in the process of its phase 2 expansion, which BOE expects to be completed this month, giving the fab a stated capacity of 120,000 sheets/month, which should be reflected in Corning’s volumes going forward. We note that a 30,000 sheet/month increase in capacity at this plant (Gen 10.5) consumes 80.1% more glass surface area than a 30,000 sheet/month expansion at a Gen 8.5 LCD fab, so the impact of such an increase is significant to any supplier that works with BOE on an area basis (glass, LCD materials, backplane, et.).
BOE is also in what it calls ‘ramp-up’ mode at its B7 Gen 6 OLED fab in Chengdu and its B11 Gen 6 OLED fab in Mianyang, both of which are in production but are expanding capacity, and the company is developing another Gen 6 OLED fab in Chongqing, which is currently under construction. While the two OLED expansions are proceeding ‘smoothly’ according to the company, the Chongqing fab, when the construction is completed, will begin ramp-up mode and be ’carried out according to customer needs’, which are ‘climbing’. We expect this to be a reference to Apple (AAPL) and its quest to further diversify its OLED display supplier list, which now consists of Samsung Display (pvt) and LG Display (LPL), with BOE providing relatively small volumes, primarily for screen replacement. As we have noted, BOE is trying to become a full-scale supplier to Apple’s OLED smartphone production, but has faced difficulties in maintaining yields comparable to others. We expect the Chongqing fab is intended to prove to Apple that BOE is capable of becoming a primary supplier.
BOE expects to increase its shipments of flexible OLED displays by more than 100% this year, but much will depend on the Gen 6 fab ramps and demand from customers other than Huawei (pvt), who has been facing extreme component and semiconductor shortages due to US sanctions. Last year Huawei released 32 smartphone models with OLED displays. This year they have released 7 to date, which makes it incumbent on BOE to broaden its OLED customer base in order to meet its goal.
BOE is also developing a 12” silicon substrate line for the production of ultra-high resolution AR/VR displays to complement its existing 8” line from which it says it has shipped both ‘fast LCD’ and micro-OLED displays, however while the company has shown demos of silicon-based OLED AR displays at shows over the years at high resolutions, we have yet to see any actual product above 5,644 ppi, although the company says they have a number of sizes under development. In terms of micro-LED BOE says they are mass producing a 75” COG (Chip-on-Glass) micro-LED panel, although we believe it is a modular component that can be assembled into a larger system.
As noted, BOE is very aggressive in terms of growing its capacity, not only in display production but in a number of associated areas, albeit most associated with BOE’s LCD or OLED capacity in some way, yet as always in the CE space, much is done with smoke and mirrors. Non-specific measurements are the stock and trade of panel producers and are helped by rags whose headlines often read, “…expanding capacity…” only to find out that the company mentioned is ‘considering expanding capacity if customer demand warrants the expansion and capital can be secured…’ That’s why analysts have grey hair at an early age.
Analyst - Age 23 - Source: Freepik
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