Does Saying It Make It True
We have criticized a number of Chinese suppliers and panel producers for aggrandizing their expectations for unit volumes, production capacity, or share, most recently Tianma’s (000050.CH) statements that they will expand volumes by 5x this year. In most cases as the year progresses there are the inevitable issues that reduce volumes or slow capacity expansion, with early targets rarely reaching those highly optimistic early predictions.
While it is still early in the year, and this being year two in the brave new world of COVID-19, it would be incumbent on most to step back a bit and perhaps pepper that optimism with a bit more reality. That said, we note that Chinese OLED panel producer Visionox (002387.CH), still a relatively small player in the small panel OLED world when compared to leader Samsung Display, seems to have landed a bit of volume confirmation from some of its customers. Not only did the company begin tweaking production at its new Gen 6 fab in Hefei just over a month ago, but it seems that smartphone brand Huawei has committed to purchasing over $850m in product this year (~5m units), more than double what it received (unaudited) from Huawei in 2020, with the estimates coming from Huawei rather than Visionox.
But it doesn’t end there, as reports that commitments from Honor (pvt), a former Huawei brand that was recently sold to a consortium of dealers and financiers, has also committed to purchasing up to 10m units from Visionox, despite it separation from Huawei. Visionox, while small compared to SDC, has a reputation for being an innovator, with high refresh rate displays, the first commercial under-display solution, rollable displays, and high pixel density displays, a number of which are used in Chinese high-end smartphones. Of course things could change radically at any point during the year and those numbers could easily be reduced, but it is refreshing to hear high expectations coming from customers rather than from producers for a change. Reliability is still a question when we live in a rapidly changing environment, but at least there is something behind expectations rather than marketing and hyperbole.
While it is still early in the year, and this being year two in the brave new world of COVID-19, it would be incumbent on most to step back a bit and perhaps pepper that optimism with a bit more reality. That said, we note that Chinese OLED panel producer Visionox (002387.CH), still a relatively small player in the small panel OLED world when compared to leader Samsung Display, seems to have landed a bit of volume confirmation from some of its customers. Not only did the company begin tweaking production at its new Gen 6 fab in Hefei just over a month ago, but it seems that smartphone brand Huawei has committed to purchasing over $850m in product this year (~5m units), more than double what it received (unaudited) from Huawei in 2020, with the estimates coming from Huawei rather than Visionox.
But it doesn’t end there, as reports that commitments from Honor (pvt), a former Huawei brand that was recently sold to a consortium of dealers and financiers, has also committed to purchasing up to 10m units from Visionox, despite it separation from Huawei. Visionox, while small compared to SDC, has a reputation for being an innovator, with high refresh rate displays, the first commercial under-display solution, rollable displays, and high pixel density displays, a number of which are used in Chinese high-end smartphones. Of course things could change radically at any point during the year and those numbers could easily be reduced, but it is refreshing to hear high expectations coming from customers rather than from producers for a change. Reliability is still a question when we live in a rapidly changing environment, but at least there is something behind expectations rather than marketing and hyperbole.
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