BOE_2207_2515_4337Chinese display panel giant will secure 20 billion yuan in funds to expand its Chongqing display line, known as B12, which produces OLED panels for smartphones, according to local media Yicai.

The funds will also be used to secure additional shares of Wuhan BOE Optoelectronics __ its Gen 10.5 liquid crystal display (LCD) panel factorythat produces display panels over 32-inches.

BOE said the Wuhan factory will begin to produce in full capacity in the first half of 2021. The factory is the company’s second after its Gen 10.5 LCD factory at Anhui.

Wuhan factory started operation in 2019 and BOE initially aimed to expand production last year but this was delayed due to the pandemic. Production temporary halted in the first half of 2020 due to the outbreak. Both Gen 10.5 factories has a production capacity of 120,000 substrates per month.

The expanded production will likely intensify BOE and CSOT’s dominance in the LCD market going forward. BOE last year bought Gen 8.5 LCD factory, C2, and Gen 8.6 LCD factory, C4, from CEC Panda. In the meantime, CSOT is planning to buy Samsung Display’s Suzhou LCD factory.

The decreased competition in LCD may stabilize fluctuation caused by seasonality. 

Seasonality will weaken and Chinese panel companies will have a bigger voice in the global display panel industry, an analyst at Northeast Securities told TheElec. 

BOE has told investors that LCD panel supply will be tight in the first quarter. LCD panel price increase that started in the second half of 2020 is continuing. The pandemic has launched production expansion delays in Sharp’s Gen 10.5 Guangzhou factory, TCL’s Gen 10.5 T7 factory and HKC’s Gen 8.6 Mianyang LCD factory, besides those of BOE. Samsung Display and LG Display’s reduction in LCD production is also causing prices to increase.

BOE is also planning to use the new funds to invest in its B12 OLED line. The company said it is aiming to increase market share in OLED. The company currently operations two flexible OLED lines __ B7 and B11. When B12 goes live, it will have a OLED production capacity of 144,000 sheets per month. B12 is expected to go live in the second half.