Huawei's new mobile phone Mate60 for the high-end market is currently in short supply. China Business News reporter learned that Mate60's flexible OLED screens are mainly supplied by BOE (000725.SZ) and Visionox (002387.SZ), which will help the domestic flexible OLED panel industry expand market share and improve operating efficiency.
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Huawei Mall
Regarding inquiries about the details of supplying screens to Huawei's new mobile phones, BOE related people responded that they would refer to public information; while Visionox related people also said on the same day that it was inconvenient to make official announcements to the outside world.
Li Feng, chairman of Wuhan Industry and Trade, told China Business News that during the Mid-Autumn Festival and National Day golden weeks that just passed, the supply of Huawei Mate60 mobile phones exceeded demand. They received a large deposit or even full payment but were unable to deliver the goods. Zhang Keqin, general manager of Dongguan Fashion Electrical Appliances, also said that during this year’s Mid-Autumn Festival and National Day holidays, its mobile phone sales increased significantly year-on-year, driven by the launch of Huawei’s Mate60 series.
"Shipments of Huawei Mate60 series mobile phones are expected to reach 17 million to 18 million units, and the demand for flexible OLED screens for Huawei mobile phones in 2024 is estimated to be 45 million to 50 million pieces." Chen Jun, deputy general manager and chief analyst of Sigmaintell, predicted to China Business News.
He revealed that BOE and Visionox are suppliers of flexible OLED screens for Huawei’s Mate60 series mobile phones. "The return of Huawei mobile phones will increase the demand for flexible OLED screens and will also provide some support for the price of flexible OLED panels."
There are rumors that Huawei’s demand for flexible OLED screens reaches 50 million to 60 million pieces. Zhou Hua, chief analyst of CINNO Research, analyzed to China Business News that this should be Huawei’s plan for flexible OLED screen demand for mobile phones throughout 2024, rather than the demand for a single model. The total shipment volume of the Mate60 series is expected to be around 15 million to 20 million units, with screens mainly supplied by BOE and Visionox.
In recent years, Huawei's development in the high-end smartphone market was once restricted after the supply of Kirin chips was cut off. According to data from CINNO Research, its share of the high-end smartphone market above 5,000 yuan reached 34% in 2020, and this number will shrink to 10% in 2022, with Apple taking all of its high-end mobile phone market share.
"This year, the release of Huawei's mobile phone products has gradually returned to normal, and its share of the high-end mobile phone market above 5,000 yuan has also begun to increase." Zhou Hua said, especially the hot sales of Huawei Mate60, which had a great impact on Apple's iPhone 15, which was launched at the same time. This not only boosts the Huawei brand, but also has a positive impact on upstream domestic panel companies. On the one hand, it can drive an increase in the shipment share of domestic panel manufacturers’ flexible OLED panels (screens). At the same time, the increase in shipments of high-specification, high-unit-price OLED panels can increase the revenue and profits of domestic panel manufacturers.
Not only does Huawei’s new mobile phone Mate60 series use domestically produced flexible OLED screens, but its new tablet computer, the 13.2-inch MatePad Pro, is also equipped with domestically produced flexible OLED screens to achieve a thin and light design. It is also supplied by BOE and Visionox.
BOE stated on the Shenzhen Stock Exchange Interactive Platform on September 25 that the company’s related business development in the OLED field is progressing in an orderly manner, and the annual shipment target of 120 million pieces is steadily being achieved.
On the same day, BOE also said that losses in the flexible OLED business mainly come from depreciation pressure and product price pressure. The price and profitability of high-end, mid-range and low-end flexible OLED panels vary greatly, and low-price competition for entry-level products is fierce. BOE is deeply cultivating leading brand customers, increasing the shipment of more profitable products such as folding and LTPO, and trying its best to increase shipments while ensuring better profits. In the first half of 2023, BOE's flexible OLED shipments exceeded 50 million, a year-on-year increase of nearly 80%, and its losses were significantly reduced.
Visionox also stated at an investor relations event on September 4 that industry organizations predict that the penetration rate of OLED screens in the smartphone market will exceed 50% in 2023. Visionox focuses on the development direction of mid-to-high-end OLED display products for its head customers, and expands the scope of cooperation with brand customers from smart wearables and smartphones to medium-sized notebook computers and other fields.
In the first half of 2023, Visionox achieved revenue of 2.693 billion yuan, a year-on-year decrease of 21.06%, and a net profit loss attributable to the parent company of 1.634 billion yuan, a year-on-year decrease of 42.35%. Visionox explained in its semi-annual report that in the first half of this year, consumer electronics demand slowly recovered, coupled with the accelerated release of OLED panel factory production capacity, industry competition intensified, and the prices of mid- and low-end OLED panels experienced large fluctuations.
According to a research report by Qunzhi Consulting, global smartphone OLED panel shipments in the first half of 2023 were 220 million pieces, a year-on-year increase of approximately 32.8%. Looking at the competitive landscape of market share, Samsung Display (SDC) accounted for 49.9%, a year-on-year decrease of 18.2 percentage points; BOE accounted for 16.2%, a year-on-year increase of 4 percentage points; Visionox accounted for 9.5%, a year-on-year increase of 2.5 percentage points.
Data from CINNO Research shows that in the global smartphone flexible OLED panel market shipment share in the first half of 2023, Samsung Display accounted for 46%, BOE accounted for 23%, and LG Display (LGD) accounted for 10%, ranking the top three. The shares of Samsung Display and LG Display are shrinking, and BOE's share is increasing. In addition, as the overall supply increases, the price of flexible OLED panels for smartphones continues to decline. However, in October 2023, the price of a 6.7-inch flexible OLED mobile phone screen is expected to be US$24.5, which is the same as in September 2023, halting the downward trend since July 2022.
On the morning of October 12, BOE rose 0.51% to 3.97 yuan/share; Visionox rose 2.71% to 8.72 yuan/share.