Chinese companies actively infiltrate the LCD industry upstream

In the capital market, there is a group that is quietly growing. This is the upper reaches of the LCD panel companies. With the Jinfu new material meeting, the group will add a new member. Upstream of the LCD panel is the most profitable part of the entire industry chain. According to industry sources, several companies are actively preparing for listing.

The main products of Jinfu New Materials are optoelectronic display thin film devices, heat insulation and shock absorbing products and precision die cutting equipment. The optical films mainly use the optical properties of various special materials to enhance the light source and ensure the uniformity of display brightness in all areas of the screen. Such as the role of its downstream companies for the backlight module factory, the backlight module plant products eventually provided to the LCD panel manufacturers. This is similar to Yongtai Technology, which was listed at the end of last year. Yongtai Technology's main business is fluorine fine chemicals. Its liquid crystal monomers and liquid crystal intermediates are supplied to Germany's Merck and are eventually used in LCD panels.

Others such as Shenzhen Textile's polarizer, Rainbow shares glass substrate, LEYBOLD high-tech conductive glass and color filters, and its investment project capacitive touch screen, are located in the upper reaches of the LCD panel. Zhang Xingang, editor-in-chief of China LCD Network, said that the LCD panel industry is still growing, Chinese companies are expanding upstream, and more and more listed companies will be involved. "Some other companies are actively preparing for listing."

The upstream raw materials have always been monopolized by foreign capital. For example, the glass substrate industry engaged in Rainbow shares is monopolized by companies such as Corning and Asahi Glass. The competitors of Jinfu New Materials are Huahong New Tech, Shangda Group, Yangxu Technology and Hongsen Optoelectronics, all of which are Japanese and Taiwan-funded enterprises. In the LCD panel industry, Japan, South Korea and Taiwan-funded enterprises have always had an advantage. "Jinfu new materials can enter the top three, it is quite difficult." Zhang Xingang, editor of China LCD Network, said.

The liquid crystal panel production line is large in investment and competition is fierce. There is little chance for domestic SMEs, but the upstream industry has many opportunities, and the upper reaches of the liquid crystal industry chain have higher gross margins. For example, the gross profit rate of liquid crystal chemical products of Wing Tai Technology is 46.82%. Twice as many medicinal chemicals. Industry insiders expect Yongtai Technology will develop from liquid crystal single crystal to mixed crystal, and may break the monopoly position of German Merck, so Yongtai Technology is highly sought after in the secondary market.

In recent years, many industries have been shifting to China. The same is true for the LCD panel industry. Japanese and Korean companies that have always refused to transfer high-generation production lines to China have announced that they will invest in building high-generation LCD panel production lines in China. The production line has reached 8 on behalf of the above and the total investment has exceeded 200 billion yuan. It is expected that by 2012, the panel production capacity in Mainland China will increase by 6.4 times from 2009, and the proportion of global production capacity will jump from 5.5% to 32%.

The rapid development of liquid crystal flat panel display industry and the rapid transfer of liquid crystal production capacity to China have brought opportunities to upstream glass substrates, liquid crystals, and polarizers. These companies have also expanded their production capacity, but compared with Japanese and Korean companies, domestic companies in China have adopted LCDs. The upstream sector is only partially penetrated, but it also appears to be weak. For example, the upstream raw materials of Jinfu New Materials are required to be provided by Japanese companies, and the products are also supplied to foreign companies. Yongtai Science and Technology LCDs are also sold to foreign companies. Glass shares of Rainbow shares have not contributed profits, and Shenzhen Textile's polarizers are not large.