China operates the second 10.5-generation LCD factory

China Star (CSOT). announced that it has begun the mass production of the 10.5th generation liquid crystal display (LCD) plant (T6) in Shenzhen on the 14th. It is the second time since BOE started operating the first 10.5G LCD plant (B9) in Hefei in December last year. T6 has a production capacity of 90,000 items per month based on the board input, and B9 has a production capacity of 120,000 items.

CSOT announced it was in a state of “mass production”, but it’s expected that it will take a considerable amount of time until they will be able to supply the set marketers. Even BOE, which are considered to be more advanced in terms of their technological strengths, has put forth substantial effort to increase the yield values of 10.5G LCD lines. It took about 6 months from the time of operation to the delivery of supplies to the set marketers. Although the exact figures are not disclosed, the industry estimates that the overall yield value of the LCD panels is less than 60%.

Kang Won-seok, a researcher of Hi Investment & Securities explained "CSOT T6 is significant as the second 10.5G LCD plant in China following BOE”, and “The operation has started, but there will not be enough volume for it to be considered to be mass-produced. The impact on prices will continue through the first half of next year. "

Regardless of the operation of the second 10.5G LCD plant in China, LCD panel prices grew weaker in the fourth quarter. HIS Markit, the market research corporation, predicted that 55-inch UHD panel prices will drop from $154 in October to $ 146 by March next year due to aggressive inventory adjustments by set makers and entry of off peak season. During the same period, the price of 65-inch UHD panels is expected to decline from $ 241 to $ 217. If there is a change in the supply-demand situation, there is room for a rebound in the second half of the year.

On the same day, CSOT held a groundbreaking ceremony for T7, a new 10.5G plant next to T6. LCD and organic light emitting diode (OLED) panels are also planned to be produced. The investment cost of T6 and T7 are 46.5 billion CNY (about 7.6 trillion KRW) and 42.7 billion CNY (about 6.9 trillion KRW) respectively.