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Sharp's exit from the smartphone OLED market is really burning its own nest?

date: 2019-08-07
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Sharp has halted production of small and medium sized OLED panels in July and may formally withdraw from the smartphone OLED panel market in the near future, Digitimes reported this morning, citing BusinessKorea.


Since its acquisition by hon hai, sharp is widely expected to further strengthen its OLED panel business by taking advantage of hon hai's strong background.After all, sharp has the inside track, and it makes sense to develop OLED panels for the iPhone.Sharp shipped 60,000 OLED panels for smartphones in the second quarter, according to IHS Markit data released in late July.As a result, IHS Markit also expects sharp to stop making OLED panels used in smartphones.


It is well known that in the era of cathode ray tube (CRT) dominance, Japanese manufacturers are leading the world in both technology and production.In the age of LCD, although the principle of liquid crystal display was first discovered by americans, the Japanese were the first to commercialize LCD.As a pioneer in the field of liquid crystal display technology in Japan, sharp is known as the 'father of liquid crystal display'. As early as 1988, sharp launched the world's first 14-inch LCD.Since then, sharp has continued to invest a lot of resources in LCD panel technology, improving the display effect, and almost single-handedly promoted the popularity of LCD, which also made Japan almost monopolize the global LCD panel industry.


In the mobile phone market, sharp, like other Japanese manufacturers, is fixated on one area of technology.Long before xiaomi trumpeted the MIX's bezel-less concept, sharp had already released more than 20 bezel-less phones that were largely unknown to the public but limited to the regions where they were sold.Until this year, sharp has been making a splash on mobile screens, including the AQUOS R3, which launched in May with what it claims is the world's best LCD screen, with a resolution of 3,120 by 1,440 pixels, a refresh rate of 120Hz, and a color depth of 10 bits, capable of displaying a billion pixels of color.


To some extent, sharp actually has some advanced ideas.However, due to its technical characteristics, OLED undoubtedly has greater advantages in small display screen due to the dual requirements of flexible screen and mobile phone thickness.At the same time, in the process of the world's major mobile phone manufacturers to explore the ultimate form of smartphones, the concept of 'comprehensive screen' popularity, also makes LCD mobile phone applications more difficult.


In fact, sharp is also laying out oleds, but executives are now telling us that its obsession with LCDS may not be so easily shaken.'OLED and LCD are like new energy cars and gasoline cars,' sun yuewei, general manager of sharp China, told reporters last month.So each technology has its different development space, at present OLED advantage lies in the thickness, but in large scale liquid crystal has absolute advantage.Although we do have oleds in the layout, it is still small size and will not be a major business for the time being.'


In sharp's october-december results, revenue at its advanced Display Systems unit, which includes LCD TVS and small and medium-sized LCD panels, fell 15.1% from a year earlier to 267.2 billion yen.Profit plunged 40.3 per cent to y7.8bn.With OLED gaining popularity and taking over the top end of the market, sharp's competition is not very good.


Last month, Japan's ministry of economy, trade and industry announced it would tighten export controls to South Korea on three materials needed to make semiconductors for smartphones and televisions.The three materials are hydrogen fluoride for semiconductor cleaning, fluorinated polyimides for display panels, and photoresist coated on semiconductor substrates.


Given that Japan accounts for 90% of the world's fluorides, it is clear that the trade war will have a big impact on South Korea's display monopoly, samsung.In general, this should be a breathing space for the old Japanese panel manufacturers, and the best time to re-focus on promoting their own OLED panels. However, it is now directly cut off the production line of OLED panels for smart phones, which, according to the editors, is just a helpless move for sharp.


After all, in the current market of smartphone OLED panel, samsung has already occupied 87.2% of the global market share, which is completely monopolistic. Even boe, which ranks the second, only occupies 5.9% of the market share.Such difficult market conditions leave little hope for sharp.Moreover, the Japanese government also lacks the determination and will to support relevant industries nationwide. It is impossible to achieve technological or cost advantages by itself in a short period of time.


Therefore, although the public is not optimistic about the prospects of LCD, sharp's current situation shows that it may be better to focus on the innovation of LCD technology and continue to explore other market segments with more rigid demand for LCD, such as large-screen TV, advertising machine, business display, etc.After all, in this impetuous era, artisan spirit as a 'scarce species' existence, perhaps also can rely on 'feelings' to kill a blue sea.(coordinating editor: Andy)


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