China’s High-Performance Optoelectronic Thin Film Industry Facing Shift to Energy Sector

A new Q2’23 review by Cinno Research highlights various high-performance film projects as new market forces come to bear on the industry. The report includes the Sunnypol and Shanjin Optoelectronics projects, which have been greenlit and are now in production. Leading manufacturers, such as Shanjin, Changyang, and Jizhi (Bestintech), are doing well both from major downstream customers like BOE, Samsung, and LG and from the support of local governmental entities investing in China’s display industry. YSFoil is inaugurating China’s first provincial innovation center focused on optoelectronic film materials.

Q2’23 TimelineCompanyLatest Update
April, 2023Weida OptoelectronicsIncreased investment in OLED optical film research and development. Third phase polarizer project plans to reach production in 2025.
Changyang TechnologyMiniLED products are being supplied to Samsung and LG in batches.
Lichang New MaterialsThe first phase of the Photoelectric Reflective Film and Coating Film Project as expected to be completed by the end of Q2’23.
May, 2023SunnypolWith an investment of 10 billion yuan ($1.37 billion), plans to build an ultra-wide polarizer production line project in Huanggang City.
Xianglong New MaterialsHopes to raise approximately 502 million yuan ($69 million). Investing in optoelectronic thin film device production projects.
YSFoilInnovation Center established in Ningbo, jointly led by Changyang and Jizhi.
June, 2023Shanjin Optoelectronics (also known as Shanshan Corp)Zhangjiagang project with an annual production capacity of 50 million square meters of polarizers was officially put into production.
JiZhi Technology (Bestintech)New high color gamut quantum dot film for display won the Ningbo Science and Technology Award.
Sanan OptoelectronicsWon BOE’s highest honor for global suppliers, the Diamond Award.
Source: Cinno Research

According to Cinno, major panel producers reportedly crossed the profit threshold in the second quarter, with heightened panel utilization rates suggesting that production will stabilize in upcoming quarters. But, it is the new energy domain which is showing robust growth and shifting the focus of the thin film industry. Thin-film solar cells are an alternative to traditional crystalline silicon solar cells. Made by depositing one or more thin layers of photovoltaic material on a substrate, they are often more flexible and less expensive than their traditional counterparts. Thin films are also essential in some battery technologies, for instance, lithium-ion batteries may use thin films as both the electrode and the electrolyte. These batteries are lightweight, flexible, and can be integrated into a wide variety of applications, including wearables and smart cards. The China Automobile Association and CPIA have reported that domestic new energy vehicle production and sales increased by 42% and 44% year-on-year (YoY) respectively in the first half of 2023, and domestic photovoltaic installed capacity increased by 154% YoY.

The report suggests that Chinese companies have made significant strides in thin-film development, borne out in the kind of customers the industry is attracting and, despite a challenging market environment for display products in general, the industry has seen some significant developments. However, there seems to be concern about rising inventory levels and continued softness in demand which means that investments in the industry may decline in 2023 although there is a hope that the last two quarters of the year, usually the peak times for the display market, will assuage the general concerns that exist.