The king of Chinese panels embraces Apple's thigh, and the profit earned last year is equivalent to the sum of the past ten years
April 18, 2022
China's first panel brother, BOE, announced its 2021 performance forecast. The performance forecast shows that the net profit in 2021 will reach up to 26 billion yuan, which is equivalent to the sum of its net profit in the previous 10 years. One of the main reasons is that it has Apple's thigh shows the importance of apple to the domestic industrial chain.
The performance forecast announced by BOE shows that the net profit in 2021 is expected to increase by 410%-416% year-on-year to 26 billion yuan, while the net profit it earned from 2011 to 2020 is only more than 27 billion yuan. What a lucrative 2021 to earn.
BOE has become the world's largest LCD panel company as early as around 2018; it put into production small and medium-sized OLED panels in 2017, and then massively expanded its production capacity for small and medium-sized OLED panels. In 2019, it became the second largest manufacturer of small and medium-sized OLED panels after Samsung. It has gained a dominant market share in the panel market, but unfortunately it has not been able to obtain huge profits.
Before BOE becomes Apple's supplier in 2021, it mainly supplies LCD panels to Samsung and domestic TV companies, as well as LCD panels and small and medium-sized OLED panels for domestic mobile phones, but as mentioned above, although it has shipped LCD panels and small and medium-sized OLED panels, the profit earned is not high.
BOE has been supplying small and medium-sized OLED panels to Apple since the second half of 2021. By 2021, Q4 shipments will gradually improve. In December 2021, the shipments of small and medium-sized OLED panels will exceed 10 million. The shipment volume is only 60 million pieces, which shows that Apple has a large demand for its OLED panels, and its profits have also increased significantly, which shows the importance of Apple to it.
Apple is a controversial company. It has very strict requirements on the industry chain. It requires companies in the industry chain to provide it with the highest quality components and the most advanced technology. The return it gives to the industry chain is huge profits, and even It will also take the initiative to pay for the most advanced equipment to industry chain companies.
However, Apple's current CEO, Cook, has tried his best to squeeze the supply chain. Since he took office as Apple's CEO, he has increased the number of suppliers from more than 150 to nearly 800, thereby forcing suppliers to compete with each other. In the early years, it was even reported that Apple took the initiative to request The supply chain lowers prices, which shows how hard it squeezes profits on the supply chain.
However, judging from the performance of several Apple suppliers in China, for example, Oufeiguang has lost 40% of its revenue due to the loss of Apple's orders, but its net profit has plummeted by 90%, and now BOE has become an Apple supplier and has made a profit in just one year. Close to the profits of the previous ten years, it can be seen that Apple's profits to suppliers are still much higher than other mobile phone companies.
It is the huge profits that Apple has given to supply chain companies. Every mobile phone industry chain company is actively seeking to become Apple's suppliers. BOE has been working hard to become Apple's supplier every year since it put into production OLED panels in 2017. In 2021, it finally got its wish, Profits have also increased significantly as a result, showing that its efforts have not been in vain.
From the changes in BOE’s performance, it can be seen that the support of domestic mobile phones for the industry chain is still very limited, and the technological upgrade of the domestic mobile phone industry chain has to rely on Apple, because only Apple can give them huge profits, and only with profits can they continue to improve technology, so It is no wonder that the domestic mobile phone industry chain is so close to Apple.