The Razor-thin Profit Margins and Volatile Price Swings Make It Toughe

“The likelihood that China will pass Japan may indicate the beginning of a phase in which China plays a more important role in the global flat panel display industry,” said Shawn Lee, senior analyst for DisplaySearch, in a press release.

In a report published on Monday, DisplaySearch said Chinese production of large-area, thin-film transistor LCD panels (liquid crystal display panels) will pass Japanese output in the current quarter. China's share of the global large-area LCD panel market is expected to reach 5.3 % in the second quarter, compared to Japan's 3.5%. In the most recent quarter, Japan's share was 5.8% versus China's 4.8%.

One reason leading to this result on LCD panel market, according to the current manufacturing conditions on this market is the profits on this part of electronic component market, which includes the below two factors, the razor-thin profit margins and volatile price swings.

Because of these two factors, so far with the notable exception of Sharp Corp. and Panasonic Corp., Japanese firms have largely given up manufacturing large-sized LCD panels.

DisplaySearch has identified the shift, this time in the production of large-sized liquid crystal display panels, the basic screen component for flat-screen televisions, computer monitors, laptops and tablet computers.


Although, currently Korea and Taiwan, the top two regions in the world, received little impacts by China and Japan in this market, sharing a combined 90% of LCD panel market, that situation may be changing with the increasing number of new LCD panel plants in China.


One phenomenon that we have to notice is that even Sharp, Japan's biggest maker of large
LCD panels, is also moving some production to the Chinese market. By adding more supply and competitors to an already-cutthroat industry, the large-sized LCD panel market is expected to grow even tougher.

However, one thing Chinese must pay more concerns is that, China cannot always rely on the low price human resources, instead to foster and develop their own technologies and excellent talents are the core competitive forces in this market. As a result, it is a tougher time for Chinese manufactures to make more benefits from LCD panel market as well. China might have to put more efforts on technologies to be stronger in this fierce competition.

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