The Global LCD War History(1996 -2011)

The Global LCD War History(1996 -2011)

Feb 20, 2017

A transnational merger

CMO (CMO) is the parent company of Chi Mei Group Taiwan petrochemical giant, began operating in 1997 color filter, purchased from CMK company of Japan a second-hand small filter production line, which belongs to the 1 generation line, after the transformation capacity of 35000 months. But the latter investment after the discovery of in Taiwan almost can not find customers. At that time only unipac Optoelectronics Technology Heyuantai two production TFT panel, the filter all imported from Japan, the CMO is difficult to enter this market. CMO management in the assessment that, since no one to buy, rather than simply yourself. In other words, that's why. In 1998 the group's number two Chi Mei optoelectronics industry company, one of which is the production of color filter CMO, another is the odd crystal photoelectric LCD panel production TFT. In May 2000 to prepare for the listing, merger, unified to CMO name.

In July 2001, AUO announced less than four months after the merger. Taiwan CMO announced the acquisition of IBM in Japan Yasu 3 generation line (IBM exit from the LCD panel industry), and set up a joint venture company and the other IDT. Wild Delta this 3 generation line capacity is 75 thousand, equivalent to HannStar two 3 line capacity. The factory is a Japanese veteran big technology companies, the transfer has transferred TFT technology to scientology. Through the establishment of the joint venture company CMO obtained a patent and the right to use the original customer base, the CMO become Taiwan enterprises only a technology transfer do not have to pay the costs of the enterprise, is the only company owned color filter manufacturers. The same year, the construction of a 4 generation line in Taiwan Chi mei. August 26, 2002 listing. By the end of 2003 to become the world's large size (20 inches or more) LCD panel, the largest supplier, second only to in Japan, SHARP. In 2005, the Japanese subsidiary IDT LCD panel production department CMO was acquired by SONY. The autumn of the same year, Chi Mei started building the first 7.5 lines, production by the end of 2006. In 2007, Chi Mei also build 6 and 7.5 generation and the 8.5 generation line, put into operation in 2008 the face of financial crisis.

PVI was founded in June 1992, is in addition to the Taiwan TFT panel manufacturers outside the old lianyou. Yongfeng is the main shareholder of PVI Yu paper group. When the boss He Shouchuan in view of the flat panel display will replace the trend of paper, a large scale into the TFT industry. In 1995 the construction of 2 generation line. In Japan could not get the technology transfer under the condition of PVI combined with Taiwan erso technology and technical personnel who returned from the United States, the production technology, specializing in small and medium-sized panels, finally profitability in 2003.

Third LCD industry downturn in 1997, so that enterprises get access to Taiwan opportunities. During the brief period of 1999-2000, all the companies in the industry benefited from it. The fourth recession creates more space for new entrants. Guang Hui, Innolux and TPO enterprises have entered in this period.

Guang Hui Electronics is the parent company of quanta group (the world's largest notebook computer OEM) and SHARP joint venture. May 1999, Guang Hui and SHARP signed a technology transfer contract. Invest 15 billion yuan NT construction of the 3.5 generation line, completed in November 2000. This is the 3.5 generation of Taiwan line fourth. In 2000, Quanta beat Toshiba, becoming the world's largest notebook manufacturer. But for the LCD panel price of notebook computer 1/3 manufacturing costs have been rising, forcing quanta personally join the TFT panel industry. This SHARP and the expansion of production capacity target Guihui became agree without prior without previous consultation, Taiwan only a source of technology shares of TFT company.

Innolux was founded in January 14, 2003, its parent company, Taiwan's Hon Hai Precision (the world's largest electronics manufacturing enterprises). Sychip is the parent company of Compal computer group, the main small size low temperature polysilicon TFT panel. Technical team is the original technical team headed by the deputy director of the Institute of electronic technology research institute. February 2001 started construction of the 3.5 generation line, and SANYO to develop mass production technology.

In the fourth industrial recession, South Korean enterprises to build the 5 generation line competition with Taiwan manufacturers. The new 5 generation line led to a new round of prosperity of the industry, from 2003 to 2004, and entered the golden age of the industry. Taiwan manufacturers to build a large number of high generation line. At present, there is a trend of centralization in Taiwan panel industry. The 2006 merger AUO panel Wuhu "one of the wide Hui, once in the scale approximation of Samsung and LG. In October 5, 2009, with sychip qunchuang. In November 14th of the same year, Hon Hai group to 7 billion 400 million yuan acquisition of cmo. In March 18, 2010, Chimei and Innolux, TPO merged new CMO was formally established, it's beyond the world's third largest panel factory.

After the outbreak of the global financial crisis, Taiwan LCD manufacturers fall into the edge of production. 2009 1-6 months, to come forward by the Ministry of industry, the Taiwan Affairs Office, two consecutive organization China nine color TV manufacturers in Taiwan, purchasing the LCD panel, the total amount of up to $4 billion 400 million, a total of more than 12 million pieces, Taiwan LCD panel business, out of the financial crisis. And the Chinese get a return, is a stab in the back. South Korean companies from February 2009 onwards, suddenly in cash to the Taiwan purchase 4 million pieces of quanta, CMO inventory, and signed a purchase agreement for the year 2009. This control market supply behavior, so that the mainland began to face a serious shortage of panels. At the same time, the South Korean enterprises to reduce the amount of liquid crystal exports to China, began to price. 2009 3-8 month rose more than 30%, resulting in China's color TV companies once again in trouble. Taiwan enterprises allow this situation, follow up the production control, from large gains.

The global financial turmoil triggered by the industry changes

The second half of 2008, the global financial crisis once again hit the TFT industry, making it an early break from the start of the recession in 2007 and plunged into recession. But history has taught us that this recession provides opportunities for the laggards. This is the Chinese mainland enterprises.

After the outbreak of the global financial crisis, South Korea's Samsung and LG have slowed down to stop the construction of the 8 generation line. Although Japan occupies an important position in the upper reaches of the industrial chain (equipment and raw materials), but a large number of manufacturers have stopped expansion. The first to establish the production line of NEC in February 2004 announced the withdrawal of the LCD industry, SONY chose to build a joint venture with samsung. Only SHARP is still competing with South Korean companies in the production line. November 2007, SHARP started construction of the world's first 10 generation line (2880 x 3130mm glass substrate). But affected by the financial crisis, SHARP lost $2008 in fiscal year 1 billion 300 million. This is SHARP's first loss since the listing on the Tokyo stock exchange in 1956.

Taiwan TFT industry despite the large size (after South Korea), but in the global financial crisis has exposed the fatal weakness of Taiwan unlike Japan and South Korea, with a large number of downstream industries (from the local computer and television terminal) the huge demand, must rely on Japan and South Korea and Chinese, purchasing. In the case of sluggish global demand, in August 2008, SONY, Samsung, LG and other Japanese companies canceled the previous orders for the Taiwan region, to their own supply. This directly led to the Taiwan panel enterprise operating rate fell to 4, almost on the verge of death line. At the same time, AU Optronics and Chi Mei will have built in the 7.5 and 8.5 generation line delayed production, and started the production workers on unpaid leave.

In the wake of the global financial crisis, only one country in the world has a growing demand for LCD panels, the Chinese market. In this case, the government China forgives, sent to the Taiwan provincial procurement group, signed a panel purchase orders of US $4 billion 400 million, Taiwan enterprises out of the abyss.

Taiwan and Japan are the most insidious role in the development of China's LCD industry. To Taiwan, which is behind the hope Taiwan timely assistance, panel enterprises would set up factories to the mainland, mainland enterprises or equity acquisitions Taiwan panel enterprises. However, in June 30, 2009, Taiwan announced the latest mainland investment policy to prohibit mainland enterprises to invest in Taiwan panel, while limiting the Taiwan panel companies to invest in the mainland. Until the year August BOE announced the construction of the 8.5 generation line, Taiwan in February 9, 2010, reluctantly agreed to release the announced panel companies investing in the mainland high generation line, and must maintain a generation more than the technology gap and the island of Taiwan. In addition to this discriminatory policy, Taiwan manufacturers have colluded with the Japanese and Korean manufacturers, continue to control the LCD panel prices, the erosion of the interests of manufacturers and the China; Chinese LCD panel industry continued penetration, attempt to obtain the control status. This LXGF behavior, ignoble.

In September 1998, Jilin caipin (owned by Jilin Electronics Group and the Chinese Academy of Sciences Changchun Institute and other units), $84 million from DTI Japan introduced a first generation TFT-LCD production line (DTI is built in 1991, the old line) and in October 1999 trial production in Changchun, followed by a series of factors such as capital, technology, market die.

Chinese flat panel display industry

Chinese tablet industry started in the last century at the end of 70s, the former Ministry of electronics industry 774 factory (Beijing electron tube factory, the BOE's predecessor), 77 factory (Hunan, Changsha Shuguang Electronic Tube Factory), China academy 713 factory (Henan Xinxiang) and the Shanghai electronic tube factory, has built 4 inch TN-LCD experimental production line glass substrate, used in the production of electronic watches, calculators and some instrument LCD products. Tsinghua University, Changchun Institute of physics and other research units have begun to set foot in the development of LCD technology. But until 1984, whether it is self assembling equipment or equipment are introduced from the United States, is a small scale experimental line, has formed a production scale, but the laboratory and experimental lines has laid the foundation for China LCD industry. A group of people who have worked on these experiments have played an important role in the development of China's LCD industry.

In 1984, Catic Shenzhen Tianma company built the first 4 inch specifications of TN-LCD production line, 77 factory, built the first 7 inch size equipment advanced production line (the scale of LCD major equipment introduced from Japan by Hongkong). Following this, Shenzhen SAST group and Singapore Hui group established a joint venture in Shenzhen hansfi company, they are also a 7 inch specifications of TN-LCD production line, Shenzhen Jinghua, almost at the same time also built a TN LCD production line, the production line to occupy first Kangli company in Hongkong is also transferred to the LCD output Guangdong Huizhou. Then Tianma two, crystal bud, Thailand and other more than 12 inch specifications have been built one after another more massive TN LCD production line. In addition to the domestic construction of the production line, the letter represented by many enterprises in Hongkong in that period have also been in the mainland to build TN - LCD production line. At the end of 80s, ninety at the beginning of this period is considered to be the first golden period China LCD industry, this period formed a considerable scale of TN-LCD industry, Shenzhen Tianma company from the beginning of the 4 inch line, and soon built 1 7 inch line, in early 90s and completed 1 12 inch line, when the size of when larger, better quality, gathered a group of high-level technical personnel, and thus established its position in the industry.

China is involved in STN-LCD from the beginning of ninety, the national 85 plan project "640 x 200 super twisted liquid crystal display project" by 77, factory and Tsinghua University, Nanjing fifty-five together. After 1993, Tianma three - Tianjun project, Hebei Hebei ya, Wuxi SHARP, Shanwei Xinli two, Shanghai radio and TV LCD, Mailcoat, has built a 12 x 14 x 14 inch or 14 inch specifications STN LCD production line, the production of large and medium sized STN-LCD products, while Anshan Sante electronic (now Anshan yes Shantou, photoelectric) ultrasound company built in STN-LCD production line, mainly for the production of small size products, other high technical level of TN-LCD line in this period according to the market demand, local transformation compatible with the production of STN-LCD products, such as Shenzhen, Formosa, Shanghai Haijing, but built more than STN-LCD production line in Wuxi SHARP the production of color STN-LCD, other production lines are only colored and black and white STN-LCD production mode.

From the beginning of the end of 90s, STN-LCD entered the color production line hot construction period, PHILPS in Shanghai to build two 14 x 16 inch color STN-LCD line, STN module production line and pre built in Shanghai together, trying to build PHILPS Shanghai city LCD, and truly in the monochromatic STN-LCD production line into CSTN-LCD production line. And investment to build a special color CSTN-LCD production line, Japanese companies in Japan new appliances built a CSTN-LCD production line in Guangdong Dongguan. EPSON and OPTRIX respectively in Suzhou and Zhangjiagang, the establishment of the Suzhou EPSON and Zhangjiagang optrex electronics and built production line, specializing in the production of small and medium size STN and color STN-LCD, Shenzhen Tianma in 2003 to complete the four phase of Tianlong engineering, production of color screen, PDA STN-LCD hand machine with a 14 x 16 inch CSTN production line. South Korea's Samsung after STN module production line in Dongguan built a color STN-LCD production line, Changchun AlliedSignal built color STN-LCD production line to enter mass production stage, a Byd Co in Shenzhen, Shantou in 2004 after entering the ultrasound also have built color STN-LCD production line, has already begun trial production and batch production of color STN-LCD.

TFT industry difficult start painful lesson

Prior to 2000, China's work in TFT was limited to the basic research work of scientific research institutes. In September 1998, Jilin caipin (owned by Jilin Electronics Group and the Chinese Academy of Sciences Changchun Institute and other units), $84 million from DTI Japan introduced a first generation TFT-LCD production line (DTI is built in 1991, the old line) and in October 1999 put into trial operation in Changchun, but has been unable to break through the bottleneck of the yield is not high. Only the production uses only 16.1 inch and 10.4 inch edge products, the project led to the failure to real production. Xinhua Nanjing, at a cost of $54 million, the introduction of a 1 generation line from Japan NEC Kagoshima factory (built in 1991, back to the old line) after the country has been unable to mass production.

In April 2002, Shanghai radio and Television Group (formerly Shanghai TV factory) signed a letter of intent with the Japanese NEC, jointly invested 114 billion 600 million yen (10 billion yuan), in the construction of the Shanghai Xhenzhuang Industrial Zone, a 5 generation line, the SVA shares accounted for 75%, NEC accounted for 25%. By the joint venture company to purchase NEC related patents and technology, in October 8, 2004, China's first 5 generation line put into operation in Shanghai (the world's seventh line of the 5 generation), the main cut of 15 inch LCD screen.

In January 2003, Beijing BOE at a price of $380 million acquisition of the LCD business Korean modern electronic (including 2.5 generation line, 3 generation and 3.5 generation line), and in September of that year in Beijing Yizhuang economic and Technological Development Zone, invested $1 billion 200 million to build a 5 generation line (1100 x 1300mm glass substrate), production in May 2005. In June 2006, Jiangsu Kunshan Ivo, built third to 5 generation line China. Ivo for the Kunshan economic and Technological Development Zone, and Taiwanese engage in joint ventures. Kunshan land, infrastructure, preferential policies and other factors of shares, accounting for 51% of shares. Taiwan Baocheng group (the world's largest footwear manufacturers), moderate (Can Yu) is a major shareholder, there is a small amount of shares by the general manager of IDTech company of Japan, Hashimoto Takaku, former CMO of TFT factory director Wang Guohe et al technology consulting firm NVTech, the technology investment holding. Ivo rely on technology and management from Taiwan more than 130 teams of engineers.

By the end of 2008, Chinese entered the main enterprises in TFT industry with SVA, BOE and Kunshan dragon, then they have a 5 generation line. But this emerging industry situation is not good, the 2008 outbreak of the global financial crisis, destroyed the LCD panel market profit cycle. In March 2009, SVA due to insolvency and reorganization trustee, its 5 generation line is the main source of losses (2008 loss of 1 billion 800 million yuan), so in the process of restructuring is to sell 2 billion 500 million yuan to CATIC group (Shenzhen Tianma). BOE and Ivo also suffered losses. In addition, due to the 5 generation line products are not suitable for large screen LCD TV (only cut 15-27 inch panel), so China's color TV industry is still needed to rely on the LCD panel imports.

SVA NEC fall behind, the more is the market strategy and human factors in the left and right. In October 2004, after the operation to cut SVA 15 inch computer LCD screen, the mainstream market has gradually turned to the 17 inch screen. When 2005 SVA decided to turn to 17 inch market, South Korean manufacturers in Taiwan with its large production scale hit the market, oversupply situation, 17 inch panel prices quickly fell to less than $160, resulting in SVA unprofitable. Then in September 2006, the former general manager of SVA NEC Zhou Jiachun retired, the general manager Yue Zhi Dianguang electronic original (Taiwanese) took over. After Shi Yuezhi airborne, but also from Taiwan to bring a large number of employees, and a large number of replacement Taiwan suppliers. SVA NEC entered the "Taiwan" dominated era. Just over 1 years, November 2007, SVA general level collective, Shi Yuezhi resigned from President Gu Weimin as SVA Electronics Co Ltd. The personnel management turmoil and two Huanshuai the confusion, let's just put into operation 3 years of the 5 generation line has suffered huge losses in moderate day. In the high end equipment depreciation, the high price of imported raw materials, products, lack of competitiveness and technical personnel turbulence, rely on Japan's NEC (high technology licensing fees, accounting for five of the annual sales of 3%) heavy blow, SVA NEC's "Introduction assimilation" mode of the end. Japan's Mitsui consortium has become the ultimate beneficiaries in them. Taiwanese have a potential rival.

Just under the pessimistic mood of the Chinese TFT industry. In 2009, still a loss in the BOE, began to expand beyond all expectations, continuously launched the 6 generation line of Hefei Beijing and Yizhuang 8.5 generation line, set off a storm of liquid crystal". Foreign major TFT companies (Samsung, LG, SHARP, etc.) overnight changed the attitude of China's technology blockade, have started in China to build a high generation line project.

An industry leader from destruction

Destroy the BOE LCD strategic originated in that it has experienced "Destruction". It has not only experienced the market destruction of most state-owned enterprises in China, but also experienced the destruction caused by industrial technological change. Over the past 30 years, many old state-owned enterprises in market competition to fall, all must be strong, BOE is one of them.

The BOE is the predecessor of the Ministry of electronics industry under the Beijing electronic tube factory (factory code 774). 15, China's electronic industry. 1952, in the Soviet Union and the German Democratic Republic (East Germany) technical support, Beijing began to build Jiuxianqiao electronic industrial zone. October 15, 1956, Beijing electronic tube factory held a groundbreaking ceremony, Vice Premier Li Fuchun, marshal Nie Rongzhen and other leaders attended the speech. The plant has a total investment of 100 million yuan, with an annual output of 12 million 200 thousand electronic tubes, is Asia's largest electronic tube factory in 60s, the total number of employees nearly ten thousand. In addition, Jiuxianqiao also built a large Beijing motor factory, North China Radio equipment joint factory (706, 707, 718, under the jurisdiction of 751, 797, 798, Beijing cable factory) power plant (738 factory), North China photoelectric technology research institute. Now the famous Beijing 798 Art Zone is formed in the reconstruction of factory site.

Before 80s, Beijing electronic tube factory has been China's largest and most powerful electronic components factory, is China's electronics industry and the backbone of the national defense industry. But after the reform and opening up, with the development of semiconductor integrated circuit technology is rapidly replacing the electron tube technology, civil and military orders shrinking rapidly, the "million Dachang" foundation collapse. In 1985, the factory developed from electronic men in Beijing, companies need to bear the heavy burden: not only to maintain the complex product chain (diode, triode, protection tube, glass, mold, electronic parts processing, power, etc.) to maintain kindergartens, schools, canteens, and other social property maintenance company baggage, there are more than 8000 retired workers. With the shrinking of the product market, Beijing electronic tube factory from 1986 to 1992 for 7 consecutive years of losses, into the debt can be raised on the brink of bankruptcy.

The root of the problem lies in the planned economic system, deprived of the power of R & D enterprises, resulting in the rapid decline of the enterprise in the wave of technological upgrading. In fact, the 774 plant has its own technical research and development capabilities. China's first single crystal silicon, the first semiconductor integrated circuit project is the electronic tube factory. However, under the planned economy system, once a project is mature, it will be free to go to higher authorities, to build a new factory. Only 774 factories in China built electronic factory is up to more than 20, 70 years was also points out several workshops in Guizhou, Sichuan, Shaanxi and other regions three line construction.

Beijing electronic tube factory is also one of the earliest companies in China to carry out the research and development of liquid crystal display technology. In 1981, the company has successfully developed the TN-LCD LCD screen, but the lack of funds and abortion. Since then decided on the STN-LCD project, eventually abortion. By 1992, the Dachang 14000 people, annual revenues of only 80 million yuan, asset liability ratio reached 90%, every month to borrow money wages, the enterprise has to the brink. In September 2, 1992, the 35 year old Wang Dongsheng (Zhejiang, Dongyang, graduated from Hangzhou Institute of Electronics Engineering) as the electron tube factory, began to make snap joint-stock transformation of enterprises, reduce the bloated bodies redundancies, folded and lax people, to rectify the order (when plant plant and even chicken); to introduce external funding, the mobilization of workers in shares. In April 1993, Beijing electronic tube factory to manage assets investment, more than 2600 cadres and workers to raise 6 million 500 thousand yuan (only enough to send a 3 month salary) investment, and bank debt, the establishment of mixed ownership of the Beijing Orient Electronics Group Co, Wang Dongsheng Ren Dong, chairman and president. He also raised 6 million 500 thousand yuan in the hands of workers for the mortgage, get an equal to bank loans, this is the first BOE "seed money".

Phoenix Nirvana rebirth

The newly established BOE, the first problem is survival. In order to solve the lack of cash flow, the company in cooperation with a Singapore company established the Oriental Hengtong property company, the office of electronic tube factory and part of the plant development has become the "Oriental Garden", attract Nestle, ABB and other famous enterprises, and rental income to maintain the company's operation. All the management of the company moved from the building to the simple room office, the original production has moved to the old cottage.

Followed by the adjustment of product structure, the company's production capacity to CRT tube fittings. Early 90s is the rapid rise of China's color TV industry, but the key components such as glass rods, electronic guns, etc. are imported from Japan, a great deal of localization. While the traditional vacuum tube technology and CRT tube technology has a certain relevance, the BOE decided to intervene in the electron gun, such as glass forming much of the investment business.

In November 1993, the BOE and Asahi Corporation, a joint venture in Beijing Asahi Electronic Glass Co. Ltd. (later renamed the Beijing Asahi Electronic Glass), production of kinescope glass rod and low melting point solder glass. The company full postpartum, accounting for 62% of the domestic market share, accounting for the world market share of 20%. Since December 1995, the BOE and Japan terminal Corporation joint venture, the production of terminals and connectors; April 1996 and nishin Corporation joint venture, the production of electronic gun and its accessories. At this stage, the BOE in a weak position, the joint venture can not exceed 50%.

After 4 years of time savings strength, BOE gradually mastered the holding status in the joint venture of energy. In 1997, the BOE and Taiwan AOC technology joint venture, set up Oriental AOC Electronics Co Ltd (BOE shares accounted for 51%), put into operation in 1999 after the success of profit, the desktop computer display to achieve the world's first CRT.

The right of survival strategy, BOE help overcome the most difficult period of entrepreneurship. Profit from 1994 (8 million yuan), in 1997 reached a profit of $50 million. In June 10, 1997, the BOE B shares listed on the Shenzhen Stock Exchange, raised HK $350 million. This is the first time the BOE can be used to invest the money. In the living conditions of enterprises thoroughly improved, BOE proposed aggressive business strategy. One had been the industry leader in the enterprise, will not be willing to others. Military enterprises tough character, and the substitution of fear, let the BOE management decision: to enter from the traditional domain to the new display industry.

Previously, even in the most difficult time of the enterprise, still maintained in the BOE LCD division. It is difficult to support, a large number of technical personnel asked to leave. At that time, the chief engineer proposed to go to the Tsinghua University engineering center. Wang Dongsheng did not agree, but then I thought, no money, not simply to let them go, with state money to maintain the culture liquid of talent, as long as you can come back on the line. Therefore, in the first 5 years of the BOE take survival strategy, the biggest goal is to maintain the personnel training system. They will not only be a large number of personnel to the joint venture and training in Colleges and universities for further study, gave some people to go to Japan for training. The long-term strategy clearly, let the BOE began several years ahead of industry talent reserves, which is an important factor in winning.

In 1998, TFT-LCD in the global flat-panel display technology advantage gradually clear, the BOE began to layout in the flat panel display field. In November of that year the acquisition of Zhejiang Vacuum Electronics Co., Ltd. 60% of the shares, the formation of Zhejiang BOE, in order to enter the VFD field (small size display). 1999 acquisition of Shenzhen letter Bridge intelligent technology company, established Shenzhen BOE intelligent display system, in order to enter the LED. In December 2000, BOE A shares issuance in Shenzhen, financing 970 million yuan. So far, the BOE had to flex its muscles strength.



Acquisition of modern Korean LCD business

The opportunity always favors those who are prepared. After the Asian financial crisis in 1997, Hyundai Group in 2000, the emergence of a cash flow difficulties, resulting in the Korean stock market turmoil. The modern group into the modern electronic will fall apart, separated, renamed HYNIX Semiconductor Corporation, and HYDIS (Modern Display Technology Co Ltd) is responsible for the LCD business subsidiary. By 2001, Hyundai has been unable to continue to invest in the LCD business, and decided to sell the HYDIS stake.

For the TFT-LCD industry is the threshold, looking into the opportunity of the BOE, this is a chance of a lifetime. HYDIS has 2 and 3 generation, 3.5 generation of three production lines, annual production capacity of more than 3 million, ranking ninth in the world's more than 20 panel enterprises, it produces a 17 inch display is ranked third in the world; it has an independent R & D institutions, R & D projects covering materials, spare parts, liquid crystal device and its device is actively developing the 4 lithography and liquid crystal dropping technology, with 300 patents, the development of the FFS wide perspective of technology is one of the world's three mainstream technology; it also has a marketing network resources complete market ability, all over the world.

At that time showed the acquisition of interest in the United States, Japan, Taiwan and other enterprises, in order to reduce the risk of overseas mergers and acquisitions, BOE selection and Taiwan joint bid for the company of the sword. In June 2001, the BOE joint enterprises and modern group signed a letter of intent, the transferee 80.1% stake in HYDIS, the remaining 19.9% is held by the Hyundai group. In November of that year, the BOE is independent of the acquisition of STN-LCD and HYNIX's OLED business, and established an independent company in South korea. (Taiwan sword degree in process and the BOE cooperation, even small movements, the BOE's intelligence to South Korea and South Korea; but this time the BOE has established a good relationship, timely informed to the BOE BOE, then exit. The Taiwan company signed an exclusive agreement with HYDIS to buy HYDIS for $650 million and pay a deposit of $10 million, but ultimately failed to raise money for abortion. Taiwan sword in 2004 by the Taiwan's takeover, renamed as Hong Technology).

Taiwan sword of exit, the BOE comeback in 2002 and HYNIX signed an agreement of intent, because of the modern group debt crisis deepens, coupled with the second half of 2002 LCD suffered recession period, the rush to sell. South Korea agreed to the final price of $380 million, all of the equity transfer of HYDIS to the boe. In order to avoid risks, the BOE set up BOE in South Korea (BOE) -HYDIS, and to the South Korean assets mortgage subsidiary, successful loan of $230 million from the Bank of Korea, plus the BOE investment of $150 million, the two sides in January 21, 2003 officially sold, this time from the beginning for nearly two years.

The appropriate transaction, the delivery of assets in January 2003 after the completion of the preliminary, the global panel market prices immediately began to rise, prosperity continued until June 2004. During this period BOE-HYDIS earnings $60 million. The acquisition of resources, solve the technical sources, BOE patent barriers, starting the market and core technical personnel and other strategic issues. To lay a solid foundation for the BOE "overseas acquisitions, domestic rooted road.

In September 26, 2003, the BOE to invest 10 billion 300 million yuan in Beijing Yizhuang economic and Technological Development Zone, built the first 5 lines (second). The BOE BOE shares accounted for 75%, South Korea $125 million investment in shares accounted for 25%. The success of overseas acquisitions, domestic 5 generation line construction and the time of liquid crystal cycle increases, prompting Wang Dongsheng's "ambition" expansion, he will rapidly expand the business scale, go with liquid crystal giants. The BOE has carried out three major strategies: immediately grounded plan, overseas listing and team ownership. The "root plan" is through the 5 line construction, the ability to acquire the localization; "overseas listing" is based on the LCD business in the overseas market, to raise the funds required for the 5 generation line; "team ownership" is the implementation of equity incentive plan, with the BOE together into the back lock shaft. Wang Dongsheng's wishful thinking is this: if the overseas listing is successful, can be used to raise $1 billion 200 million in funding the 5 generation line investment within 5 years, then holdings of 12 to $3 billion, while the construction of the 6 generation and the 7.5 generation of a line. If these goals can be reached, the BOE in 2008 to enter the world top 5, a chance to win the top three industry.

But this idea was destroyed by a small event. In June 2, 2004 the "Beijing News" published an article on "BOE curve MBO hidden wealth surge puzzle" article executives, questioned the BOE management stock ownership plan, the Commission halted the BOE Hongkong listing plan. Listing and financing after the bursting of the BOE had to seek bank loans for the construction of the 5 generation line financing. In April 8, 2005, led by the Construction Bank China, including CDB, Chinese bank, bank, bank, Huaxia Bank, China Merchants Bank, Beijing bank, Xiamen international bank, nine bank syndicate, signed a $740 million loan contract with the BOE 5 generation line for construction. In addition, the Beijing municipal government provided 2 billion 800 million yuan of loans. 90% of the total investment of the 5 generation line from bank loans, such a financial structure was later proved to be a lot of risk, but also to make its original idea of the expansion plan aborted.

In order to ensure that there is a market starting in 2003, BOE spent HK $1 billion 30 million acquisition of Taiwan AOC 26.38% stake, becoming its largest shareholder. AOC was the world's largest computer monitor on behalf of industry and commerce, annual sales of more than 22 million units, accounting for the global market share of 35%. The acquisition of AOC to solve the marketing problems of BOE 5 generation line 1/3. In May 25, 2005, BOE 5 generation production line successfully. Since then, the production of high yield, from the initial stage of the monthly production in March, expanded to 60 thousand in August 2006, in September 2007 reached 80 thousand, in July 2008 has reached a monthly output of 100 thousand. Become one of the best production lines of international operation efficiency and profitability.

The 5 generation of the successful production line, as the BOE industry personnel training "learning platform". In the process of development, the BOE professional engineers from less than 300 people, the rapid growth to more than 2 thousand people; then continue to expand production capacity, to provide manpower reserve. In the aspect of technology, the BOE in acquiring the South Korean modern FFS wide viewing technology, continuous research and development of a large number of additional proprietary patents, especially the HYDIS 3.5 generation line amplification to the 5 generation line, a large number of unique technology breakthrough, the formation of AFFS wide angle patent system. Because AFFS is more advanced than SHARP's VA technology, Samsung and LG have proposed cooperation with. At the same time, the BOE 5 generation line, also attracted dozens of upstream manufacturers (by international enterprises) investment in the vicinity of Yizhuang, the. Suppliers to join, become an important source of BOE absorb external of the latest technology.


Beijing Yizhuang BOE 5 generation line production workshop

Almost died before dawn

The liquid crystal cycle began to rise from 2003, 15 inch LCD panel prices had soared to $230 per piece, which had just acquired South Korea HYDIS BOE group, 11 billion 180 million yuan, a record year revenue soared 133.7%; net profit of 403 million yuan, increased 386.7% over the previous year. But from the beginning of the second half of 2004, the LCD cycle into the recession, 15 inch panel prices fell to $145. Not only South Korea began to BOE Beijing 5 generation line losses, and in 2005 the first production also coincided with the trough. Because this is the first production line of BOE, the initial yield is not high resulting in operating losses, coupled with the 5 generation line that must be extracted 1 billion 300 million yuan of equipment depreciation, loss of 1 billion 600 million yuan in 2005 boe. This is the first annual loss since the company was founded in 93. In 2006, the market is still sluggish, prices continue to decline, BOE annual loss of more than 1 billion 700 million yuan.

Two consecutive years of losses brought great pressure to the boe. An important reason is that the pressure is almost unbearable: when the 5 generation line not listed overseas financing, but with bank loans, the BOE's financial burden is very heavy. 5 generation line equipment depreciation takes 7 years, and bank loans require settlement in 5 years. By April 2007, the 5 generation line into the syndicated loan repayment period. At this time the BOE is unable to repay, the only way is to get the loan, otherwise the company's cash flow will break.

Under great pressure, the BOE began around for help, please Beijing municipal government to coordinate, and invited each bank in syndicated to Beijing 5 generation line to visit, to explain why they need extension. After hard work, in the end of May 2007, the banks agreed to extend the loan period from 5 years to 10 years. This is what makes the BOE back to life. In order to alleviate the financial crisis, some BOE began to sell assets to obtain cash. In May 2007, the BOE to HK $2 billion 400 million sold a stake in AOC. The money used to repay the loan, the company's debt ratio decreased from 78% to 50%.

Later BOE Korea BOE-HYDIS shares are sold, although not entirely out of the financial pressure. After entering the LCD recession, BOE-HYDIS began to lose. Originally prepared to adjust structure of the BOE (such as the production of labor-intensive Chinese moved from 1700 workers, will be cut to 800), but was firmly opposed to the local union. The BOE had put forward the patent ownership buy it all as the injection conditions, but did not talk to. Due to insolvency, BOE-HYDIS entered the judicial process. In May 2007, the Korean court will start the regeneration process, BOE-HYDIS to $300 million transferred to Taiwan PVI, BOE all exit (BOE-HYDIS also holds a 10% stake in Beijing 5 generation line).

The crisis also contributed to the growth of enterprises, in the huge financial pressure, the BOE internal started the "3020" action, that is to improve the product value of 30%, 20% to reduce the unit cost, speed and quality. All the staff were mobilized and several thousands of improvement measures were put forward to reduce the production cost. In order to stabilize the team, the BOE will wages increased by 20-40%, the initiative to further stimulate the employees. At the same time, the BOE to further strengthen the marketing power, reorganization of the sales department, the sales team stationed in the factory to the customers, enhance customer service response speed. By 2006, the BOE has customers including Samsung, LG, PHILPS and DELL and other famous company. At the same time, efforts to explore the market crisis, the BOE in China market rapidly rising sales, by July 2007, China district sales have reached 55 thousand a month, 8 times a year ago, China similar products in the market, almost entirely by the BOE occupation.

The ability of rapid growth in the crisis, which laid the foundation for the BOE better operating conditions. In June 2007, the global LCD panel market began to pick up, the BOE realized the first quarter earnings. The 5 generation of all-round improvement of the operation of the line, the BOE in 2007 net profit of 700 million yuan, and at this stage quickly paid off most of the debt. But the roller coaster effect LCD cycle continues, the first half of 2008, BOE profit 700 million yuan, to the second half of the year, the financial tsunami, the global TFT market once again plunged into recession. The BOE flagship 19 inch LCD screen as an example, the first half of 2008 the price of $120 per piece, to January 2009 has dropped to about $50, resulting in the first half of the loss of more than 1 billion 300 million yuan. The draw, 2008 annual loss of 800 million yuan boe.

But with a recession confound different, the latest round of this recession, despite the losses, the financial basis of the BOE, because most of the pay off bank loans, much more stable than before. Especially after 1 years before the test of life and death, the BOE for LCD cycle has a very strong psychological ability. Then, with a struggle for survival on the contrary, in the liquid crystal recession cycle has not ended, the BOE began a massive expansion of the pace. This is a global TFT LCD panel industry nervous cycle of anti cycle.

A contrarian expansion LCD storm

As the LCD industry development calendar proves, enter this industry was like riding a tiger, uncomfortable riding down, but more dangerous. As long as you do not want to quit, you must continue to expand the scale of investment. BOE management is very clear: the 5 generation line cutting panel, and can supply the most potential market, large screen LCD tv. China is the world's largest LCD TV market, annual sales of more than 30 million units, the output value of more than one hundred billion yuan. As the core of the large-size LCD panel, all rely on imports.

BOE 5 generation line after the completion of the expansion plan, should start from the "dragon plan" in Shenzhen. The second half of 2005, in support of the Shenzhen municipal government, by restricting the import panel the pain of SKYWORTH, TCL, Konka, Changhong and other four color TV giant, plans for a joint venture in Shenzhen construction of the 6 generation LCD panel production line. But in the pursuit of technical support to foreign companies, or simply refused, or be asked for a huge transfer fee. So they take the initiative to find the BOE, each accounted for 40% of the shares, plus the super company (on behalf of the Shenzhen municipal government) accounted for 20% of the shares, the formation of the Shenzhen Julong photoelectric company (registered capital of 8 million yuan). Shenzhen municipal government also expressed willingness to provide 7 billion 700 million yuan of financial support.

In fact, in the preparation of BOE 5 generation line, while the establishment of the B2 project of the 6 generation line, just because the overseas listing plan to implement the abortion. Dragon plan agreed immediately on the formation of the BOE technology team of hundreds of people. But after the news came out of the Dragon plan, the Japanese SHARP in June 2006 to take the initiative to build a 7.5 generation line of Shenzhen's plan, the Shenzhen municipal government and the four major color TV giants have shaken. Changhong simply do the withdrawal of plasma (PDP), BOE languishes in. After a year of negotiations, SHARP violated its original commitment to require the transfer of technology under the control of the case, leading to negotiations to terminate in September 2007. SHARP later went to Shanghai when the spoiler, SHARP and SVA cooperation of the 6 generation line project has been approved, it withdrew from the. In this way, the Japanese played around the country after a circle, so that China's high generation LCD panel production line at least postponed 2-3 years. China's imports of more than 30 billion U.S. dollars a year panel.

At the end of 2006, the BOE and SVA NEC losses were 1 billion 500 million and 2 billion yuan, Ivo is difficult. In this case, the three companies have explored the integration, but it is difficult to reach a consensus on the management of the dominant. By 2007 the market improves, it will settle a matter by leaving it unsettled. In the next development strategy, think on the high generation line of BOE to the risk is too big, so I decided to choose a into can attack, retreat to the road of low generation line construction investment scale is small, small and medium-sized market in the LCD panel market to the strongest, and then to Gao Shidai to Xian Kuozhang.

In 2007 through the financial crisis, the BOE had started to expand the opportunity, and the first step is the construction of Chengdu in a 4.5 generation line. This project comes from the Dragon plan, several local governments (Wuhan, Chengdu, Changchun etc.) the possibility of actively looking for talks at the local BOE production line. Because of Chengdu city to provide better conditions, the two sides hit it off.

Although not built high generation production line, but the Chengdu 4.5 generation line to take the mode of financing, is a significant breakthrough for later BOE construction of the 6 generation and 8.5 generation line opened a financing channel. The success of this model from the Beijing municipal government to invest in the 5 generation line. Previously, the Beijing municipal government (by SASAC Beijing industrial investment company) 2 billion 800 million loan to the BOE to support the 5 generation line construction. In the later encountered financial difficulties, the BOE BOE loans into shares, on the one hand can help the BOE survive, while the government can still through the capital market recovery funds.

The Beijing municipal government agreed to this approach. It turned out that this investment is very cost-effective for Beijing. In addition due to the project and get revenue (profit and $about 1000000000 each year on the 5 generation line upstream matching enterprises taxes paid 2 billion 780 million yuan), later BOE's stock price from 2.72 yuan debt of up to 12 yuan, the Beijing municipal government in the share price of 10 yuan will be half of the Equity Cash sold 2 billion yuan and the rest of the equity market capitalization of more than 2 billion 500 million yuan.

This experience shows a new way of financing for the BOE: to the government or the specific "strategic investors" issuance of shares to obtain enough capital. So this model is applied to the Chengdu project. Chengdu in addition to providing land, tax and other aspects of support, but also provide financial support. In July 2008, the BOE had a private placement for the Chengdu 4.5 generation line, Chengdu to the issuance of shares of 1 billion 800 million yuan. In addition, the National Development Bank led consortium to provide 1 billion 600 million yuan of loans, and the repayment period is 10 years. In March 2008, second of the TFT line of BOE, Chengdu 4.5 generation line project, a total investment of 3 billion 400 million yuan, to mass production in October 2009, April 2010 reached full production. The utility model relates to a small size liquid crystal screen which is mainly used for mobile multimedia terminals. The completion of this round of investment, the BOE's capital channel and industrial development through the basic relationship.

Once you find a new financing mode, the BOE "ambition" re initiation, start looking for the construction of the 6 generation line opportunities; and the target is mainly aimed at three areas of the Yangtze River Delta, Pearl River Delta and Bohai bay. Originally the BOE still consider the choice of Shenzhen, in addition to transportation, market and other factors, the 6 generation line to finance 17 billion 500 million yuan, must be with the city has the resources to talk about cooperation. In April 2008, the management of the BOE was invited to visit Anhui Hefei, a Hefei municipal government moved. Site of the Hefei land area has been ready, Shenzhen also promised to how much they gave much. After the evaluation, the BOE found that Hefei is a good choice. Here the east west of the Yangtze River Delta, the hinterland of central China, more important is full of water and electricity supply (a 6 generation line of daily water consumption of more than 20 thousand tons, the power consumption, the Yangtze River amazing) and Chaohu, and Anhui province is a power output. In addition, Hefei's technical personnel intensive, ranking fifth in the country, but the staff is relatively stable. At the same time, Hefei has accumulated a number of relative size of the household electrical appliance industry, but because of the technical content is not high and unstable. Hefei municipal government in full consideration of the risks, make the BOE 6 generation line project.

The autumn of 2008, BOE signed with the Hefei city 6 generation line capital framework agreement, Hefei promised invested 6 billion yuan, and 9 billion yuan in additional promise guarantee is not successful. In April 13, 2009, plans to invest 17 billion 500 million yuan in the BOE 6 generation line in Hefei started. Due to the construction of the BOE 6 generation line, has been for 3 years, so technically very confident. November 17, 2010 Hefei 6 generation line production, the design of the monthly production capacity of 90 thousand, the main cutting 18-37 inch TV and computer display.

In June 8, 2009, the BOE is approved by the Commission after the announcement, the issuance of 12 billion yuan for the Hefei 6 generation line orientation. As the community optimistic about the LCD industry (the central government has been listed as the focus of the development of new types of monitors), coupled with the local government to join, making investors confidence. The BOE smoothly from the capital market to raise 12 billion yuan, the Hefei municipal government only paid 3 billion yuan, let the 6 generation line settled in Hefei. And after the 6 generation line construction, has attracted more than a dozen supporting enterprises in Hefei development zone. This cluster of industries, so that Hefei had to apply to the central government to increase the Development Zone land permit.

After the financial crisis in 2008, in response to the threat of recession, the Chinese government has also launched a counter cyclical investment, launched a 4 trillion investment plan. Beijing municipal government for stimulating domestic demand, investment projects, the person in charge of the Yizhuang Development Zone, immediately think of the BOE 8 generation line. In fact, early to declare BOE 8 generation line project to the city, but was then busy with the Olympic leaders to attend to the matter. The support from the government, the BOE 8 generation line immediately enter the program implementation phase. In August 31, 2009, BOE 8 generation line (after adjustment for the 8.5 generation line) foundation in Beijing Yizhuang Development Zone, a total investment of 28 billion yuan. Since the 8.5 generation line in the process of the line with the 6 generation and there is no essential difference, but the process has increased the difficulty, so the project is advancing very quickly. Samsung, LG, SHARP are built in the 5, after the 6 generation line, built the line of the 8 generation

BOE 8.5 generation line project construction area of about 710 thousand square meters, is located in Beijing Yizhuang economic and Technological Development Zone East of C1, C2, C5, C6 block, including the array of factories, into a box factory and color film factory, factory module and comprehensive power station, comprehensive office building, sewage treatment plant and other facilities. Design capacity of 90 thousand glass substrates per month, substrate size 2200mm * 2500mm. In July 31, 2010, building the main structure of the cap, the end of December 2010 began to move into the process equipment. Plans to put into operation in 2011, the three quarter of June 2011 to achieve mass production. After the project put into operation, can drive a large number of supporting enterprises, the annual output value of nearly 100 billion yuan, providing more than 20 thousand jobs. Beijing municipal government, the national development and Reform Commission and the Ministry of industry has given strong support for the project. In April 2009, the national development and Reform Commission approved the first Chinese TFT-LCD technology in the establishment of the National Engineering Laboratory, boe. In order to promote the development of liquid crystal display devices, the integration of upstream and downstream technology, marking and personnel training.



The remnants of the 798 Art District in Beijing bauhaus. This huge factory was originally Beijing radio three factory, built in 1957. Since the 50s of last century, China has built a large number of electronic enterprises, but in the planned economy system, most of these enterprises failed to form competitiveness. To the 80s of last century, a large number of technological transformation in bankruptcy.