The development history of the Japanese display panel industry: from monopolizing 94% of the world’s share to only JDI’s “single seedling”

Jiwei.com reported that looking back on the development history of the global panel industry, it has gone through the process of the origin of the United States – the development of Japan – the overtaking of South Korea – the rise of Taiwan, China – the development of mainland China. It is undeniable that Japan has added a number of splendid strokes in this history. From accounting for 94% of the global panel market share to today, there is only one “single seedling” of JDI, and the current situation of the Japanese panel industry “precarious” is inevitable. Makes people sad.

The original “king” of the panel industry

The brilliance of the Japanese panel industry also begins with the birth of the liquid crystal display panel (LCD). In 1960, George Heilmeier, who worked part-time at the American Radio Corporation (RCA), discovered the new electro-optical properties of liquid crystal materials. After 8 years of painstaking research, the world’s first LCD came out. However, after RCA showed LCD flat-panel TVs, there was no more following, and American companies such as Motorola, AT&T, Hewlett-Packard, etc. were also defeated in the face of huge capital investment and long R&D cycle, and successively withdrawn from the panel field.

When American companies gave up LCD, Japanese companies chose to enter the game. Suwa Seiko and Sharp were the pioneers of the two “head irons”. The two bought LCD technology from RCA and American Ferguson in 1972 respectively, and from Micro LCD started off an unusual path.

Among them, Suwa Seiko launched the world’s first LCD local gold watch that can display 6 digits in 1973, and 10 years later, it developed a thin-film transistor liquid crystal display (TFT-LCD) TV, which also attracted Panasonic and Toshiba. , Hitachi and many other old Japanese electrical companies have devoted themselves to the research and development of TFT-LCD.

Pictured: Suwa Seiko LCD Tuhao Gold Edition Watch

Sharp used LCD in calculators in 1973, and began to catch up with the stimulation of Seiko TFT-LCD TVs. In 1987, Sharp managed to get the 3-inch LCD TV into production, but the output was not satisfactory. It was not until the following year that it became famous with the world’s first 14-inch TFT-LCD, and then began to try the possibility of mass production of large-size TFT-LCD. % increased to 80%.

At the same time, more Japanese companies are trying to build panel production lines. For example, IBM Japan and Toshiba established the DTI manufacturing alliance in August 1989 and jointly invested more than 100 million US dollars to build a TFT-LCD mass production line; in August of the following year, NEC also announced its entry. According to data, between 1991 and 1996, at least 25 large-scale panel production lines were built around the world, of which 21 were built in Japan.

With the participation of more enterprises, Japan has established a complete industrial chain system from raw material supply, equipment assembly, to manufacturing and process specification. It is worth mentioning that in 1994, Japan’s share of the global panel industry jumped to 94%, and Sharp was even more popular, known as the “father of liquid crystal”, and even held the pricing power for a long time.

The United States and South Korea “flanked”

When Japan monopolized 95% of the global panel industry market share, the United States accounted for less than 3%, which naturally caused dissatisfaction in the United States. So in the early 1990s, the United States instituted anti-dumping lawsuits against Japanese flat-panel display manufacturers and raised tariffs on TFT-LCDs in an attempt to suppress Japan. On the other hand, South Korea has also become a strong challenger to Japan in the panel industry. Samsung, LG and other companies started TFT-LCD research and development and trial production around 1990. Although they have been losing money for many years, they have always insisted on investing in research and development and process improvement. , and finally achieved mass production of LCD panels in 1995.

In order to seize the market, Japan and South Korea have launched fierce competition. Around 1997, under the multiple blows of the Asian financial crisis, the panel industry downturn, and the “suppression” by the United States, most Japanese panel manufacturers faced the dilemma of losses. On the other hand, Korean companies such as Samsung and LG have adopted a counter-cyclical investment strategy, disregarding the immediate losses, and decisively investing heavily in the expansion of production lines. Samsung even set up factories directly in Japan and hired unemployed Japanese panel engineers. Such a radical strategy has allowed Korean companies to eat away most of the market share of Japanese companies when the industry picks up.

However, Japan, which mastered cutting-edge technology, did not give up. It aimed at Taiwan, China, which was the least affected by the financial crisis in Asia at that time, and signed a TFT-LCD technology transfer contract with a local partner, which made up for the lack of Japanese production capacity. Large patent transfer fees. And this move also laid a scourge for Taiwan, China’s ability to compete with it for global panel share in the future.

The time comes to 1999, which was the “darkest moment” for the Japanese panel industry. Samsung ranked first in the global flat panel display market with a share of 18.8%, and LG ranked second with 16.2%. Sharp, who has dominated the list for many years. At the same time, major companies have also begun to turn to Korean companies to cooperate. In May of the same year, Philips exchanged $1.6 billion for a 50% stake in LG’s panel business; in July, Apple invested $100 million in Samsung’s panel business; in October, Samsung received a $8.5 billion contract from Dell for a large TFT-LCD order.

Today, South Korea’s Samsung and LG also occupy a high position in the global panel industry, and have already surpassed JDI and other Japanese panel industries in terms of technology and market share.

There is only one “single seedling” left in JDI

In the process of industrial development, some people go out and some people rise up. This is an eternal law. This is especially true for the panel industry, which has a long technology research and development cycle and is capital-intensive. Suwa Seiko, NEC and other companies are the representatives of the exit, and the acquisition of Sharp by Hon Hai has become a sign of the decline of the Japanese panel industry.

One of the pioneers of the Japanese panel industry, Suwa Seiko, after investing a lot of money in setting up factories, configuring equipment, and establishing production processes, was unable to withstand the economic crisis in Japan in 1989. The huge capital investment in the early stage forced it to work hard to repay the loan. Eventually exit the panel market.

After Sharp dominated the world with LCD TVs from 2001 to 2007, due to external reasons such as the global financial crisis and the appreciation of the yen, as well as its own business reasons, it began to decline, and its performance began to suffer consecutive losses since 2008. Taking measures such as layoffs and closing some panel production lines also failed to reverse the situation. Since then, it has begun to seek external financial support to get rid of its operating difficulties. In 2016, Hon Hai acquired a 66% stake in Sharp for 388.8 billion yen, which has also become a sign of the declining Japanese panel industry.

Another Japanese company, NEC, also closed its Kagoshima LCD panel factory in 2009; two years later, NEC sold 70% of its company’s shares in the production of small and medium-sized LCD panels to Shenzhen Tianma Group in mainland China, and has since withdrawn from LCD panel manufacturing.

However, the remaining Japanese companies have not given up. In 2011, led by the Japanese government, Toshiba, Sony and Hitachi integrated their LCD panel businesses and established Japan Display Inc (JDI), so JDI became the only company with manufacturing capabilities in the Japanese panel industry.

In fact, JDI was also brilliant in the early days of its establishment. iPhone 7. In the 7Plus era, Apple LCD screens were supplied, and the flagship mobile phones of Huawei, Xiaomi and other manufacturers in mainland China also used JDI screens. However, the good times did not last long, and JDI did not keep up with the trend of panel focus from LCD to OLED. In 2019, it began to fall into the predicament of consecutive years of losses, fraudulent performance, shutdown of panel factories, expansion of layoffs, and the resignation of the president. Although JDI has now entered the OLED field, it has fallen behind in the beginning, and has been left far behind by Korean companies such as Samsung and LG, as well as panel manufacturers in mainland China such as BOE.

Conclusion: The secret to the success of the Japanese panel industry lies in the development of the application market from the micro LCD and the resilience against failure. With JDI left, it is still unknown how long this “single seedling” representing the Japanese panel industry will last.