TCL Signs New Fab Deal
Back in January (1-21-21) we noted that Chinese CE brand TCL (000100.CH) and affiliate Chinastar (pvt) were considering a project that would entail the development of a new Gen 8.5 LCD fab in Guangzhou, China, with the potential for another fab dedicated to producing flexible and rollable OLED displays using printing technology. TCL has now signed an agreement with the Guangzhou Municipal People’s Government and the Guangzhou Development Zone, both state-owned organizations, to build a new Gen 8.5 LCD fab, owning a 55% stake, with the government’s stake at 45%.
The project, which is expected to cost 35b yuan ($5.35b US) is expected to begin construction in September of this year, although it is contingent on TCL raising 12b yuan ($1.83b US) in a private share sale to up to 35 investors, of which 9b yuan ($1.375b US) will be used for the new fab. According to the company, the new fab will take two years (from construction start) to begin production and will have a stated capacity of 180,000 sheets/month, which is in line with our original expectations, although the fab’s start date is a bit earlier than our expectations if they meet their stated goal. The backplane technology is expected to be IGZO and the fab is expected to be focused on producing IT oriented displays, such as monitors, notebooks, automotive displays and similar mid-sized panels.
While still based on the capital raising contingency, we expect TCL has already found close to the required investment needed for the project and it seems that the government has helped to move the project along more rapidly than expected. No word on the status of the OLED fab has been made as part of this project agreement.
The project, which is expected to cost 35b yuan ($5.35b US) is expected to begin construction in September of this year, although it is contingent on TCL raising 12b yuan ($1.83b US) in a private share sale to up to 35 investors, of which 9b yuan ($1.375b US) will be used for the new fab. According to the company, the new fab will take two years (from construction start) to begin production and will have a stated capacity of 180,000 sheets/month, which is in line with our original expectations, although the fab’s start date is a bit earlier than our expectations if they meet their stated goal. The backplane technology is expected to be IGZO and the fab is expected to be focused on producing IT oriented displays, such as monitors, notebooks, automotive displays and similar mid-sized panels.
While still based on the capital raising contingency, we expect TCL has already found close to the required investment needed for the project and it seems that the government has helped to move the project along more rapidly than expected. No word on the status of the OLED fab has been made as part of this project agreement.
Chinastar - LCD Capacity - Source: SCMR LLC, Displaysearch, IHS, Company Data
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