Chinastar to Expand Capacity
According to an announcement by the Shenzhen government, TCL (000100.CH) owned Chinastar (pvt) aka Huaxing Optoelectronics, has petitioned to acquire land adjacent to its T6/T7 production fab in order to scale production. The overall project is expected to increase T6/T7 combined capacity by 60,000 sheets/month. The project includes an operations center and R&D center for TCL’s TV products and commercial display business, the additional production capacity, and housing for company employees.
Chinastar currently operates two Gen 8.5 and two Gen 10.5/11 fabs in Shenzhen, with the larger capacity fabs currently totaling 180,000 sheets/month maximum capacity. While some of that capacity is shared with OLED production, Chinastar/TCl has barely begun to produce OLED displays and we have seen no indication that they have solved OLED production issues for large panel production on Gen 10.5/11 lines.. That said, part of the new construction project, aside from the increase in LCD capacity, is to go toward “a production base for semiconductor display materials, devices, equipment and downstream applications” which would likely indicate a module line, and “…high-performance vapor-deposited organic light emitting display tube localization project, printed OLED display localization material project…” which sounds like it would be either an OLED pilot line or similar type project.
While the ultra-large LCD panel market remains the most lucrative in terms of LCD TV panel production and as a source for TCL’s growing TV business internally sourced production is ideal, we wonder whether consideration has been given to the longer-term prospects for large panel display production. There are certainly efficiencies to be had by using Gen 10.5/11 fabs to produce 77” and 88” TV panels, but at ~14% of the TV market currently, those sizes will be somewhat limited to a subset of consumers despite an increase of 4.4% share over 2020
Chinastar currently operates two Gen 8.5 and two Gen 10.5/11 fabs in Shenzhen, with the larger capacity fabs currently totaling 180,000 sheets/month maximum capacity. While some of that capacity is shared with OLED production, Chinastar/TCl has barely begun to produce OLED displays and we have seen no indication that they have solved OLED production issues for large panel production on Gen 10.5/11 lines.. That said, part of the new construction project, aside from the increase in LCD capacity, is to go toward “a production base for semiconductor display materials, devices, equipment and downstream applications” which would likely indicate a module line, and “…high-performance vapor-deposited organic light emitting display tube localization project, printed OLED display localization material project…” which sounds like it would be either an OLED pilot line or similar type project.
While the ultra-large LCD panel market remains the most lucrative in terms of LCD TV panel production and as a source for TCL’s growing TV business internally sourced production is ideal, we wonder whether consideration has been given to the longer-term prospects for large panel display production. There are certainly efficiencies to be had by using Gen 10.5/11 fabs to produce 77” and 88” TV panels, but at ~14% of the TV market currently, those sizes will be somewhat limited to a subset of consumers despite an increase of 4.4% share over 2020
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