Recently, the two largest touch screen companies in China, TPK Weihong Optics and Mudong Optoelectronics, shut down some production lines and factories and sold their equipment and related businesses. Another group of small and medium-sized touch-screen companies have been eliminated in the vicious price war due to overcapacity and inventory fullness, and a new round of mergers and closures has begun in the touch-screen industry.
"Golden Master" Apple abandoned downstream panel makers
On November 26, 2013, TPK Haohong Group, one of the original largest touch screen suppliers, closed its subsidiary, Weihong Optics. The company started to develop capacitive touch screen technology with Apple in 2004 and has supplied more than 50% of touch screens to Apple. It is the world's largest iPhone touch screen production base. But after Apple replaced the touch screen supplier with a panel company such as Sharp, the honeymoon period of the two companies came to an end.
Lin Zhong (pseudonym), the head of a touch-screen manufacturer in Shenzhen, told reporters that the main reason for the end of the cooperation between the two companies was Apple's adjustment of the screen technology, which directly led to the closure of the Xiamen manufacturing base by TPK. "TPK used to provide iPhone and iPad touch screens with GG architecture, that is, two panels of touch panel and LCD screen are attached together. The disadvantage is thick volume and high power consumption. Starting from iPhone 5, Apple switched to Japan. The manufacturer's in-cell structure, which adds touch function to the LCD screen, is very thin, but TPK can't do this technology."
The reporter learned that because TPK's largest "golden" customer Apple's iPhone 5, iPad and other new products use different touch technologies, increased Sharp, LGD and other Japanese and Korean suppliers, resulting in TPK continued to the production line and last year The plant area is adjusted. According to public information, TPK has started a large-scale “slimming†program, and the number of employees has shrunk from 50,000 in early 2013 to 44,000, and the number of layoffs has exceeded 8,700.
Dozens of companies have closed down or been merged
It is also not optimistic that most SMEs are facing a life-and-death barrier. A touch screen supplier told reporters that dozens of small and medium-sized touch-screen companies have closed down in the South, or they have been merged by panel makers and listed companies.
"At present, the touch screen has a variety of structures such as GF, GG, and in-cell. The GF architecture is a piece of glass and a film. The relative technical threshold is the lowest, and many small workshops are swarming, resulting in a serious excess capacity. Under the vicious price war, small and medium The manufacturer died a lot." Lin Zhong told reporters that a few years ago, the industry was frantically investing in a higher-capacity capacitive screen. In order to grab the price of each other, the gross profit margin of the ordinary GG architecture touch screen is less than 10 %. "A year ago, an ordinary GG screen could still sell for up to 140 RMB. Now it can only sell for about 90 yuan, and it has fallen more than 40 pieces. The era of high profit on touch screens has passed."
The greater risk comes from the shrinking supply and demand in the downstream market and the pressure on the capital chain caused by excessive stocks. DIGITIMES Research, a Taiwanese research institute, pointed out that the three major telecom operators have cancelled the subsidy policy for low-end smartphones below 4 inches, resulting in the accumulation of touch panel inventory in the market.
"The main thing is to supply OEMs, but their demand fluctuations are relatively large. For example, customers have 150,000 orders this month, but the actual demand at the end of the month has been reduced to 50,000. In this process, touch screen manufacturers will accumulate a large amount of inventory. In the case of technology replacement, outdated products are overstocked, and some manufacturers can only close down," said a touch industry supplier.
2014, touch screen manufacturers face life and death
An interesting phenomenon is that when large-scale touch-screen manufacturers have retreated, panel makers such as BOE and AUO have entered the industry, attracting orders from brand manufacturers with their integrated advantages of vertical integration.
"This year is really the first year of life and death in the domestic touch industry. If the result of the final market competition is that in-cells such as Japan and South Korea become mainstream, downstream mobile phone manufacturers have begun to turn to panel manufacturers to purchase integrated screens, touch screens. Manufacturers can't have this technology and supporting production line in a short time, orders will drop drastically, and some large touch-screen companies are also difficult to overcome this." Many industry insiders expressed this concern to reporters, but they are currently letting them Fortunately, because panel makers' in-cell screen production costs are still high, only some high-end models are used. For traditional touch-screen manufacturers, there are still opportunities in the low-end mobile phone market.
"Golden Master" Apple abandoned downstream panel makers
On November 26, 2013, TPK Haohong Group, one of the original largest touch screen suppliers, closed its subsidiary, Weihong Optics. The company started to develop capacitive touch screen technology with Apple in 2004 and has supplied more than 50% of touch screens to Apple. It is the world's largest iPhone touch screen production base. But after Apple replaced the touch screen supplier with a panel company such as Sharp, the honeymoon period of the two companies came to an end.
Lin Zhong (pseudonym), the head of a touch-screen manufacturer in Shenzhen, told reporters that the main reason for the end of the cooperation between the two companies was Apple's adjustment of the screen technology, which directly led to the closure of the Xiamen manufacturing base by TPK. "TPK used to provide iPhone and iPad touch screens with GG architecture, that is, two panels of touch panel and LCD screen are attached together. The disadvantage is thick volume and high power consumption. Starting from iPhone 5, Apple switched to Japan. The manufacturer's in-cell structure, which adds touch function to the LCD screen, is very thin, but TPK can't do this technology."
The reporter learned that because TPK's largest "golden" customer Apple's iPhone 5, iPad and other new products use different touch technologies, increased Sharp, LGD and other Japanese and Korean suppliers, resulting in TPK continued to the production line and last year The plant area is adjusted. According to public information, TPK has started a large-scale “slimming†program, and the number of employees has shrunk from 50,000 in early 2013 to 44,000, and the number of layoffs has exceeded 8,700.
Dozens of companies have closed down or been merged
It is also not optimistic that most SMEs are facing a life-and-death barrier. A touch screen supplier told reporters that dozens of small and medium-sized touch-screen companies have closed down in the South, or they have been merged by panel makers and listed companies.
"At present, the touch screen has a variety of structures such as GF, GG, and in-cell. The GF architecture is a piece of glass and a film. The relative technical threshold is the lowest, and many small workshops are swarming, resulting in a serious excess capacity. Under the vicious price war, small and medium The manufacturer died a lot." Lin Zhong told reporters that a few years ago, the industry was frantically investing in a higher-capacity capacitive screen. In order to grab the price of each other, the gross profit margin of the ordinary GG architecture touch screen is less than 10 %. "A year ago, an ordinary GG screen could still sell for up to 140 RMB. Now it can only sell for about 90 yuan, and it has fallen more than 40 pieces. The era of high profit on touch screens has passed."
The greater risk comes from the shrinking supply and demand in the downstream market and the pressure on the capital chain caused by excessive stocks. DIGITIMES Research, a Taiwanese research institute, pointed out that the three major telecom operators have cancelled the subsidy policy for low-end smartphones below 4 inches, resulting in the accumulation of touch panel inventory in the market.
"The main thing is to supply OEMs, but their demand fluctuations are relatively large. For example, customers have 150,000 orders this month, but the actual demand at the end of the month has been reduced to 50,000. In this process, touch screen manufacturers will accumulate a large amount of inventory. In the case of technology replacement, outdated products are overstocked, and some manufacturers can only close down," said a touch industry supplier.
2014, touch screen manufacturers face life and death
An interesting phenomenon is that when large-scale touch-screen manufacturers have retreated, panel makers such as BOE and AUO have entered the industry, attracting orders from brand manufacturers with their integrated advantages of vertical integration.
"This year is really the first year of life and death in the domestic touch industry. If the result of the final market competition is that in-cells such as Japan and South Korea become mainstream, downstream mobile phone manufacturers have begun to turn to panel manufacturers to purchase integrated screens, touch screens. Manufacturers can't have this technology and supporting production line in a short time, orders will drop drastically, and some large touch-screen companies are also difficult to overcome this." Many industry insiders expressed this concern to reporters, but they are currently letting them Fortunately, because panel makers' in-cell screen production costs are still high, only some high-end models are used. For traditional touch-screen manufacturers, there are still opportunities in the low-end mobile phone market.
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