BOE invests in Honor for stronger ties

A man walks past an Honor store in Shanghai, Nov 11, 2022. [Photo/VCG]

Deal expected to boost competitiveness in China's chip display industrial chain

Chinese display panel supplier BOE Technology Group Co Ltd has invested in Honor Device Co Ltd, a major domestic smartphone manufacturer, a move that is expected to reinforce cooperation between the two sides and strengthen the competitiveness in the country's semiconductor display industrial chain, industry experts said.

According to Tianyancha, a Chinese corporate information provider, Honor has recently completed a new round of strategic financing from six new investors such as BOE, China International Capital Corp Qizhi (Shanghai) Equity Investment Center, Guosen Capital and Shenzhen Baoan District Investment Management Group.

Honor said in a statement on Thursday that the company has been concentrating on "diversifying shareholding structure", and "has always adhered to the principle of openness and collaboration". It is committed to cooperating with partners of industrial chains to bolster product innovation and better serve global consumers.

As a leading player in China's display panel segment, BOE has 16 semiconductor display production lines across the country and is the core panel supplier for smartphone makers including Huawei, Xiaomi, Honor, Oppo and Vivo.

Chen Jun, deputy general manager and chief analyst of Sigmaintell Consulting, a Beijing-based market research firm, said BOE's investment in Honor is conducive to establishing more stable cooperation between the two partners.

"The display screens, especially the organic light-emitting diodes or OLED screens, are regarded as the core resource for terminal device makers, so BOE's investment will ensure that Honor will obtain its OLED panel supply and strengthen its competitiveness amid fierce competition from domestic rivals," Chen said.

Meanwhile, BOE will acquire more stable shipment channels and customer resources, as well as expand its footprint in the supply chain of smartphones, he added.

Data from Sigmaintell Consulting show that BOE topped the domestic market with flexible OLED panel shipments of about 60 million units in 2021, up nearly 60 percent year-on-year, making it the world's second-largest OLED maker next to South Korea's Samsung.

Apart from mobile phones, Honor offers a wide range of terminal devices including tablets, laptops, televisions and wearables, which will provide a large number of orders for BOE, said Zhou Hua, chief analyst at CINNO Research, a Chinese flat-panel display consultancy.

"For Honor, it is important to have a stable and reliable source of display panels as the company is ramping up efforts to expand its presence in the smartphone market", Zhou added. The tie-ups between panel suppliers and terminal device makers are common in the early stages of the OLED industry.

Smartphone shipments in China fell 11 percent year-on-year to 70 million units in the third quarter, according to global market research firm Canalys.

Domestic smartphone maker Vivo took the lead with a shipment of 14.1 million units in the July-September period, accounting for 20 percent of the market share, while Honor ranked third with 12 million units of smartphones shipped, taking up 17 percent of the market share.

Market research company Omdia said global OLED panel shipments for smartphones will reach 812 million units in 2022, an increase of 38.8 percent compared with the estimated 585 million units in 2021.

In terms of OLED supply, Samsung Display is expected to remain the top market player next year but its market share is expected to shrink with its dominant position challenged as Chinese panel manufacturers have entered the small and medium-sized OLED market, Omdia said.

Editor: Jiang Feifan
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