China Star Gen 11 – More than a hole in the ground
Back in April 2016 we noted that China Star (pvt) was planning to invest $7.7b to build a new fab in Shenzhen with the largest glass substrate format, Gen 11, which is just under 10 m2 or ~107 ft2, and could actually be larger, given that t no real “Gen 11” format size has been established. The massive project broke ground in May and is expected to be completed (phase 1) in April of 2019. That said, how far along is the project and will it meet its opening date?
The project site, seen in Fig.1, has completed geological survey work and plant pilings are nearing completion after the demolition of a substantial number of buildings that were on the site, but the telling point is that the land preparation work was completed in less than the 3 months allocated for the job, as the Shenzhen government has ‘encouraged’ bureaucrats to process licenses, variances and other paperwork more quickly than usual. According to project managers, the fab progress is already ahead of schedule, with the building cap, which had been expected for January 2018, potentially pulled forward as both China Star management and the Shenzhen government are already boasting about ‘Shenzhen Speed’, referencing the rapid pace at which the project is progressing.
While we know the fab will be based on IGZO backplane technology, China Star has yet to decide if some of the 45,000 sheet/month capacity will be allocated to producing large panel OLED displays, which are currently only produced by LG Display (LPL). As we believe the fab will be built out in three phases of 15,000 sheets/month each, we would expect the phase 1 build out to be LCD based, with the potential for some OLED capacity in phase 2 or 3. China Star is running a small Gen 4.5 OLED pilot line, which could lay the groundwork for a large panel OLED line in 2020 or 2021. China Star is owned by TCL Corporation (000100.CH) and Samsung (005930.KS), who has a 10% share and received ~14% of its panel supply from China Star last year.
The project site, seen in Fig.1, has completed geological survey work and plant pilings are nearing completion after the demolition of a substantial number of buildings that were on the site, but the telling point is that the land preparation work was completed in less than the 3 months allocated for the job, as the Shenzhen government has ‘encouraged’ bureaucrats to process licenses, variances and other paperwork more quickly than usual. According to project managers, the fab progress is already ahead of schedule, with the building cap, which had been expected for January 2018, potentially pulled forward as both China Star management and the Shenzhen government are already boasting about ‘Shenzhen Speed’, referencing the rapid pace at which the project is progressing.
While we know the fab will be based on IGZO backplane technology, China Star has yet to decide if some of the 45,000 sheet/month capacity will be allocated to producing large panel OLED displays, which are currently only produced by LG Display (LPL). As we believe the fab will be built out in three phases of 15,000 sheets/month each, we would expect the phase 1 build out to be LCD based, with the potential for some OLED capacity in phase 2 or 3. China Star is running a small Gen 4.5 OLED pilot line, which could lay the groundwork for a large panel OLED line in 2020 or 2021. China Star is owned by TCL Corporation (000100.CH) and Samsung (005930.KS), who has a 10% share and received ~14% of its panel supply from China Star last year.
China Star G11 Site Photo - Source: ofWeek
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