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Shenzhen Officially Launches 8.5-Generation LCD Panel Production Line

Signing ceremony for Shenzhen’s 8.5-generation TFT-LCD production line
Signing ceremony for Shenzhen’s 8.5-generation TFT-LCD production line

On November 16, the first day of the China Hi-Tech Fair (CHTF) in Shenzhen, the official launch of Shenzhen’s 8.5-generation thin film transistor liquid crystal display (TFT-LCD) production line was announced with a total investment of RMB 24.5 billion. Shenzhen Century Science & Technology Investment Corporation (hereinafter referred to as "Century Corporation") and TCL Corporation signed the relevant Cooperation Agreement. Meanwhile, the formal establishment of Shenzhen Huaxing Photoelectric Technology Co., Ltd. (hereinafter referred to as "Huaxing Photoelectric"), the project’s main operational body, was also announced. The move signifies that the 8.5-generation LCD panel production line, which is so far the highest-generation domestic TFT-LCD production line in China, has settled in Shenzhen. It marks a key step for China towards the establishment of flat-panel display industrial competitiveness and the implementation of industrial restructuring and upgrading, as well as a new milestone for China’s electronic information industry.

Member of CPC Central Committee, Deputy Secretary of Guangdong Provincial Party Committee and Guangdong Governor Huang Huahua, Deputy Director of the National Development and Reform Commission Zhang Xiaoqiang, Vice-Minister of the Ministry of Industry and Information Technology Lou Qinjian, Vice-President of Chinese Academy of Engineering Wu Hequan, Deputy Party Secretary of the CPC Guangdong Provincial Committee and Party Secretary of CPC Shenzhen Municipal Committee Liu Yupu, the Standing Committee of Guangdong Provincial Party Committee and Acting Mayor of Shenzhen Wang Rong, the Secretary General of the People's Government of Guangdong Province Xu Shangwu, Member of the Standing Committee of Shenzhen Municipal Committee of the CPC and Standing Vice Mayor of Shenzhen Xu Qin, Member of the Standing Committee of Shenzhen Municipal Committee of the CPC and Secretary-General of the Standing Committee of Shenzhen Municipal Committee of the CPC Dai Beifang, Member of the Standing Committee of Shenzhen Municipal Committee of the CPC and Vice Mayor Chen Yingchun, Member of the Standing Committee of Huizhou Municipal Committee of the CPC and Standing Vice Mayor of Huizhou Huang Shifang, together with TCL chairman Li Dongsheng and Century Corporation general manager Lou Chao attended the launch ceremony. In addition, leaders from the Ministry of Science and Technology, relevant departments and bureaus of Guangdong Province, and the Shenzhen Municipal Government and relative departments, as well as representatives of relevant industry associations and financial agencies also attended the ceremony.

Deputy Director of the National Development and Reform Commission, Zhang Xiaoqiang
Deputy Director of the National Development and Reform Commission, Zhang Xiaoqiang

 

It is reported that, with a total investment of RMB 24.5 billion, the project will be constructed by Huaxing Photoelectric, whose capital funds of RMB 10 billion were invested respectively by Century Corporation and TCL Corporation totaling RMB 5 billion each. Based on the principle of openness, in the future Huaxing Photoelectric will introduce other color TV manufacturers and liquid crystal vendors as strategic partners. They will strive to get manufacturers other than these two involved in the project and seek a wider scope of technical and marketing cooperation in an effort to jointly promote the core competitiveness and upgrading within Chinese local enterprises. The main products are 26-32 inch, 46 inch and 55 inch LCD TV modules. The design capacity is 100,000 per month and the annual output of LCD TV modules will be about 14 million. The project is located in Shenzhen Guangming New District Hi-Tech Industrial Park, and the construction will include production and production-support facilities, power facilities, environmental protection facilities, safety facilities, fire control facilities, management facilities, service facilities and corresponding buildings (structures). The construction of the site is scheduled to begin in mid-January 2010 and start trial production by the end of 2011. The project will push up- and down-stream industries forward to form a display industry with an annual worth exceeding RMB 100 billion. 

 

As the strategic industry of national developmental focus, the LCD panel display industry is greatly supported by the National Development and Reform Commission, the Ministry of Industry and Information Technology, the Ministry of Science and Technology and Guangdong Province. The Shenzhen Municipality gives its full support in capital investment and preferential industrial policies.

Vice-Minister of the Ministry of Industry and Information Technology Lou Qinjian
Vice-Minister of the Ministry of Industry and Information Technology Lou Qinjian

Deputy Director of the National Development and Reform Commission Zhang Xiaoqiang and Vice-Minister of the Ministry of Industry and Information Technology Lou Qinjian emphasized in the launch speech that, as an industry that the state gives special assistance to, the flat panel display industry has been included in the National Eleventh Five-year Development Plan and has become one of the most important developments in "The Medium- and Long-Term Program for Information Industry Development (2006-2020)". The launch and implementation of this project is a concrete manifestation of the spirit of the documents in the Reform of the Pearl River Delta Region Development Plan and the Readjustement and Development Plan of Electronic Information Industry, and will play an active role in enhancing electronics industry competitiveness in the entire Pearl River Delta Region and in the global market.

The Standing Committee of Guangdong Provincial Party Committee and Acting Mayor of Shenzhen Wang Rong said, "The Shenzhen Municipality attaches great importance to the development of this new-type of flat panel display industry, holds on to treat it as a strategic initiative to accelerate industrial restructuring and upgrading and to seize the opportunity to reach new industrial heights in the future, and does everything possible to create a good environment for the panel display industry to develop rapidly." The launch of Shenzhen’s 8.5-generation LCD panel production line project is bound to be of significant strategic meaning in consolidating Shenzhen’s status as the display and IT industrial base at home and abroad, promoting the strategic restructuring of China’s TV industry, enhancing the overall competitiveness of Shenzhen’s electronic information industry, promoting the city’s high-end industrial orientation and speeding up the construction of a modern industrial system strategically.

 

The Standing Committee of Guangdong Provincial Party Committee and Acting Mayor of Shenzhen, Wang Rong
The Standing Committee of Guangdong Provincial Party Committee and Acting Mayor of Shenzhen, Wang Rong

TCL chairman Li Dongsheng said that, in terms of technical development, Huaxing Photoelectric’s 8.5-generation LCD panel production line project is of great significance to the domestic color TV industry. China's local enterprises extend the industrial chain upward to the field of core components and complete the vertical integration of the new-type of flat-panel TV industrial chain to form good upstream-downstream coordination, thus enhancing the competitive strength of China's color TV enterprises as a whole. This will not only speed up the restructuring and upgrading of China's color TV industry, but also will promote other enterprise operations including further international-oriented development. Take TCL for example, the company’s sales volume of LCD TVs was 4.2 million last year, and the expected sales volume this year will exceed 8 million including more than 3 million for overseas, thus becoming the domestic color TV manufacturer with the largest production and sales volume. The start and implementation of Huaxing Photoelectric’s project allows the Chinese mainland to take the lead in giving birth to enterprises with a full-run TFT-LCD color TV industry chain. It is also significant in helping to change the status quo of "no core and screen" in China's color TV enterprises, winning out from the passive situation of being controlled by others, improving local enterprises’ right to speak in the global flat panel display industry and enhancing the core competitiveness of China's color TV industry as a whole.

It is understood that Huaxing Photoelectric will adhere to independent innovation in technology; at the same time, it will actively seek international cooperation and extensively participate in international technical cooperation. More importantly, over a long period of independent innovation and technical cooperation, domestic enterprises have accumulated considerable technical reserves in product development, process design and personnel, with the technical capability to operate complex projects. Previously, Century Corporation has successfully operated the 5-generation TFT-LCD production line project of Century Photoelectric. TCL Corporation relies on its own forces to successfully operate the large-size TFT-LCD back-end, or the module production line. In today's high-generation production line technologies, construction technology, process technology and product technology are the three major components. The technology to construct plants is already very mature and can be resolved by engineering design institutes and construction units; most of the processing technology has been solidified in processing facilities and can be guaranteed by equipment manufacturers; and it is believed that the level of difficulty in techniques will not be very high in product development, design and manufacturing if product technology is based on independent research and technical cooperation.

 

TCL chairman Li Dongsheng interviewed by reporters
TCL chairman Li Dongsheng interviewed by reporters

In terms of the Huaxing Photoelectric project, industry market experts pointed out that the time was right for Huaxing Photoelectric to launch LCD panel projects. With TFT-LCD accelerating the pace to replace traditional CRT TVs, the consumption of LCD TVs will be in great demand and exceed previous predictions. Demand will grow rapidly in the future, thus the market demand for TFT-LCD display panels will correspondingly see a rapid increase. According to the latest forecast of Display Search, the market demand for LCD TVs in 2009 will reach 127 million units, an increase of 21% over the same period of the previous year; in which the sales volume in the Chinese market reaches 23.60 million units, accounting for 19% of the global pie. It is estimated that the global sales volume will reach 188 million units in 2012, with the average annual compound growth rate (CAGR) reaching 15%. By then, China will have a 21% market share and become the world's largest LCD TV consumer market. The market demand is huge. However, as matters stand, because almost all the large-size LCD TV panels used in mainland China need to be imported, the proportion of LCD TV shipments only accounts for 4% of the world’s total. The launch of the project is expected to change the fact that upstream resources of the TFT-LCD industrial chain are controlled by a small number of enterprises in Japan, South Korea and Taiwan, thus effectively easing the lack of screens in domestic color TV manufacturers and speeding up localized coordination of the flat panel display industry chain. This will in turn push forward the independent innovation and localization process of TFT-LCD manufacturing equipment, safeguarding national industrial security, and promoting stable and rapid economic development.

Industry analysts also said that, according to the current production, the 8.5-generation LCD panel production line is the most competitive and it is also the mainstream production line for future TV panels with the most complete product coverage. As predicted by authoritative institutions, the main display panel sizes for future home-use should be 32~37', 40~47' and 52~55'. Taking into account China's rural market, the main sizes should also include 26'. The products provided by the 8.5-generation panel production line exactly cover the above size range, together with high cutting efficiency and production flexibility. Only one manufacturer has declared higher-generation panel technology. But other manufacturer will not be more cost-effective in terms of raw material costs, capital investment, technology inputs, market prospects and other aspects. Therefore, the 8.5-generation is the mainstream production line for TV panels in the future, as well as the TV panel production line suitable for the Chinese market. It has excellent market prospects.