The panel duo has invested more than 20 billion in R&D in 21 years, and the R&D expenditure in the electronics industry ranks among the top three

May 19, 2022

Core Tip: With the completion of the 2021 annual report disclosure by listed companies in April, the R&D expenditure of technology companies has become the focus of the market. From the R&D expenditure, it can be seen that the company's continuous investment in new products and new technologies also represents the company. technological strength and future development potential.
With the completion of the 2021 annual report disclosure by listed companies in April, the R&D expenditure of technology companies has become the focus of the market. From the R&D expenditure, it can be seen that the company's continuous investment in new products and new technologies also represents the company's scientific and technological strength. and future development potential.

As a typical representative of technology companies, the electronics industry is characterized by rapid technological changes and continuous product upgrades. Judging from the amount of R&D expenditure of nearly 380 listed companies in the electronics industry that have published annual reports in 2021, BOE, Fii and TCL Technology rank among the top companies. Among the top three, BOE and TCL Technology, the two leading panel companies, have a combined R&D expenditure of 21.2 billion, accounting for 15% of the total amount of listed companies in the electronics industry.
According to the annual report of TCL Technology and BOE, in 2021, TCL Huaxing achieved a sales area of ​​39.4915 million square meters, a year-on-year increase of 36%, and the semiconductor display business achieved an operating income of 88.1 billion yuan, a year-on-year increase of 88.4%. BOE's sales area increased by 37% year-on-year, and its operating income was 219.31 billion yuan, a year-on-year increase of 61.79%.

With the efforts of Chinese panel companies such as TCL Huaxing and BOE, according to data released by the Korea Display Industry Association, in terms of revenue, Chinese display panel companies will account for 41.5% of the global share in 2021, surpassing the 33.2% share of Korean companies. , ending the 17-year dominance of South Korean companies in the field.

Continue to increase R&D investment and build a patent "moat"

However, behind this ranking, we must also see that there is still a gap between domestic screens and Korean screens. Panels are mainly divided into LCD and OLED. The share of LCD panel production capacity in mainland China has exceeded 50%, which is much higher than that of South Korea, Japan and Taiwan. South Korea's OLED panels have obvious advantages, with a global share of more than 80% in 2021.

On the basis of achieving the leading position in the LCD industry, Chinese enterprises are vigorously catching up in the field of new display technologies such as OLED. One of the main paths is to increase investment in research and development. In the past ten years, the cumulative R&D expenditure of TCL Technology and BOE has exceeded 100 billion yuan. In 2021, TCL Technology and BOE will rank 24th and 12th on the A-share list with R&D expenditures of 8.77 billion yuan and 12.44 billion yuan respectively.

The panel duo has maintained high-intensity investment in R&D for many years. For example, from 2014 to 2021, the average ratio of R&D expenditures of TCL Technology and BOE to gross profit exceeded 28.5%.

The research and development of cutting-edge technologies by TCL Technology is mainly responsible for the TCL Industrial Research Institute. TCL founder Li Dongsheng once revealed that this is the only department he has not cut the budget for. Not even in difficult times.

For example, in 2019, when the panel suffered industry losses, TCL Technology and BOE still maintained high-intensity R&D investment, which was 5.46 billion yuan and 8.75 billion yuan respectively, accounting for 63.6% and 49.7% of gross profit, respectively.

High-intensity R&D investment brings a large number of patent reserves. TCL Technology will add 1,254 PCT patent applications in 2021, with a total of 14,051 applications, ranking the forefront of Chinese enterprises. The number of quantum dot electroluminescence technology and material patent applications will reach 1,964, ranking second in the world. In 2021, BOE will have over 9,000 new patent applications and over 6,000 new patent authorizations, including over 2,000 overseas patent authorizations.

Strategically deploy upstream core materials and processes, and continue to develop new display technologies

As a rising star in China, panel manufacturers continue to increase investment in research and development focusing on the process and materials of new display technologies.

In the field of printed OLED, the "National Printing and Flexible Display Innovation Center" of Guangdong Juhua, a subsidiary of TCL Technology, is the only national innovation center in the display field in my country. Industrial chain resources in all links from materials, technology, manufacturing process to application verification.

TCL Technology continued to invest in Micro-LED display technology, established a joint laboratory with Sanan to focus on Micro-LED technology development, and promoted the company's ecological layout in this field from materials, processes, equipment, production line solutions to independent intellectual property rights, and formed Process flow solutions for commercial-scale mass production of Micro-LEDs.

In addition, the number of patent applications for quantum dot electroluminescence technology and materials of TCL Technology has reached 1,964, ranking second in the world, and more than half of them are invention patents, covering 14 fields such as quantum dot materials, backlights, panels, etc., forming a very thorough The patent layout is expected to establish a leading edge when the next generation of display technology arrives.

By increasing process and technology research and development, TCL Technology has deployed high value-added products, reflecting its strategic determination to continue to promote high-end products. At the SID2022 exhibition, TCL Huaxing focused on displaying advanced concept products and top display technologies in the fields of inkjet printing OLED technology, HVA technology, OLED flexible display, LTPS innovative display, 8K 1G1D technology, Mini LED technology, smart commercial display and other fields. . The large-scale high-end strategy of TCL Technology's semiconductor display business has accelerated, and the market share of 8K and 120HZ high-end TV panels ranks first in the world.

The innovation of display products is inseparable from the upstream core materials. Li Dongsheng once disclosed a set of data in 2020. The localization rate of LCD and OLED core materials is only 47% and 17% respectively, and the domestic market share of new domestic new display key luminescent materials is only about 5%. In addition to being stifled by these core materials, the development of China's panel industry has also suffered a lot of profits due to the high prices of these core materials. To this end, TCL Technology cooperates with industrial partners to gradually realize the localization of some raw materials, thereby reducing production costs.

Only by investing in research and development of processes and key materials, and expanding to key links in the industry chain and value chain, can China's panel industry chain achieve leapfrog development.