October 24, 2021


From native P.o.V.

After 14 years of continuous losses, burning up 300 billion, this Chinese company break the technology monopoly of foreign enterprises, and become a technology giant

4 min read

Since 2021, there has been a wave of “price increase.” Not only are the prices of grain crops and meat products “Crazy” rising, but even the paper enterprises that are closely related to our daily life are showing a rising trend, and the oil price that the majority of car owners are most concerned about is also “rising endlessly

One industry, which sounds strange but is closely related to our life, is the semiconductor industry. In March 2021, the world’s largest semiconductor silicon chip manufacturer announced that it would comprehensively increase the price of silicon products from April, with 10% to 20%, and this is the first price increase in three years.

Under the impact of the epidemic, many upstream supply chains have increased their prices, which leads to the corresponding price increases in the middle and downstream links. However, in such a difficult environment in 2020, a semiconductor company has turned over a brilliant report card, that is BOE BOE, the global leader in semiconductor display products.
In 14 years of continuous loss, “burn” 300 billion

When it comes to BOE, many people feel strange. In fact, BOE is a pure “made in China,” founded in 1993 by Wang Dongsheng, the “father of China’s LCD.” In the 1990s, China was still in a blank period in the field of liquid crystal display. The screens of mobile phones, computers, and TVs were all square and upright “big men.” However, foreign countries have developed “bigger, thinner and clearer” liquid crystal display screens in the same period.

To solve the “pain of screen” in China, Wang Dongsheng is determined to lead his team to develop a Chinese LCD. However, the road of R & D is not easy. At that time, the technology of manufacturing display screens was monopolized by Japanese and Korean enterprises. Coupled with the lack of professional technical support in China, BOE was in a state of loss at the beginning of its establishment.

According to the relevant financial reports, in the years from 2005 to 2010, BOE’s accumulated losses exceeded 5.3 billion yuan. In the face of BOE, which has been “unable to deliver” results, it was even criticized as “losing money.” To break the technology monopoly of foreign enterprises and make the national brands “proud,” the state has injected 300 billion yuan of R & D funds into BOE. BOE’s R & D path is challenging. As of 2012, BOE’s loss status has lasted for 14 years.


Break the technology monopoly of foreign enterprises and become the first in the world with an annual income of 116 billion yuan

Because domestic technology can’t keep up, so for many years, we have imported LCD from abroad, but there has been the “monopoly” phenomenon mentioned above for a long time. In 2013, the state issued hundreds of millions of tickets against the “monopoly” of foreign enterprises; In 2014, BOE launched a diversified transformation strategy, namely the “DSH” strategy.

The successful development of the strategy is reflected in the financial reports in 2016 and 2017. It is reported that the revenue in 2016 was 68.9 billion yuan, and the net profit in the first quarter of 2017 “soared” 20 times. With the strong “counter-attack” of BOE, the market “monopolized” by Japan and South Korea has been gradually broken.

BOE has been able to turn losses into profits. Apart from years of persistence, it has never been “soft-handed” in R & D. in 2016 alone; it invested 4.139 billion yuan in R & D.
Especially in the mature technology of Japanese and Korean enterprises, the industry competition has been fierce. However, with the continuous maturity of R & D technology, BOE’s shipment of display products in 2019 will be about 17 million units, with annual revenue of 116 billion yuan. BOE will become the first in the world in terms of display shipment, surpassing the former display giant Samsung group of South Korea.


BOE may replace Samsung to occupy the dominant position in the OLED market?

As we all know, Samsung Group’s mobile phone screen technology has been in a leading position. In the OLED panel market, Samsung’s market share is as high as 97%. But after BOE’s rise, the iPhone 13 in the second half of 2021 will feature flexible OLED screens made by BOE, according to the iPhone addict.

According to industry insiders, BOE’s flexible OLED display can’t compete with it all over the world. In the era of continuous changes in the mobile phone industry in the future, BOE’s flexible display is very suitable for folding or full-screen mobile phones.

As we all know, Samsung and BOE have always had a competitive relationship. However, according to South Korean media reports, BOE’s OLED panel will be used in Samsung’s upcoming new machine in 2021.

This means that Samsung’s “one dominant” position in the OLED market no longer exists. In the future, BOE is expected to surpass Samsung and occupy the dominant position in the OLED market. We still need time to witness whether Samsung and BOE are enemies or friends.

So far, about 25% of the world’s display panels are from BOE. According to BOE’s financial report for 2020, the annual revenue was 135.553 billion yuan, up 16.8% yearly. However, the performance in the first quarter of 2021 was still outstanding, with net profit ranging from 5 billion yuan to 5.2 billion yuan.

China’s semiconductor industry from “nothing” to “have” cannot do without BOE’s persistence for many years. Now, BOE has become the leader of China’s semiconductor industry. I believe BOE will continue to be bigger and stronger in the future. What do you think?

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