The Zhitong Finance App learned that Omdia published an article stating that panel suppliers are increasingly relying on the automotive industry as their main source of revenue. In 2023, the automotive industry became an important revenue pillar for many major panel suppliers: AUO Optoelectronics (16%), Innotech (23%), Tianma (25%), Japan Display (55%), and LG Display (9%). AUO Optoelectronics, Intron Optoelectronics and Tianma are pioneers in the full display module business. Although there is little increase in shipments, revenue has begun to increase dramatically.

As light vehicle production stagnates and shipments of automotive display panels remain stable, automakers and panel suppliers are actively seeking growth, focusing on technological innovation, enhanced functionality and application, and adoption of new business models and supply chain strategies. In order to meet the growing demand for dashboards and central control screens, and to seek cost reduction and innovation in display panel technology, major automobile manufacturers, including GM, Ford, BMW, VW, and Stellantis, began to directly establish business with panel suppliers since 2016.

Traditional automotive display panel manufacturers not only have to bear the pressure of price and performance requirements put forward by car manufacturers, but also face fierce competition from new industry players such as BOE, Huaxing Optoelectronics, and Huike. These new entrants to the market have greatly disrupted the market by shipping at very competitive prices and in FOG (flexible circuit board to glass circuit board connection, that is, without a backlight source but containing a driving IC unit) mode.

For example, BOE entered the automotive display panel market after acquiring Varitronics in 2016. Huaxing Optoelectronics began producing low-temperature polysilicon (LTPS) LCD panel FOG in 2018, and Huike entered this market at the end of 2019. In order to cope with the sharp drop in prices and shrinking profits, established panel suppliers such as Inntron Optoelectronics, Sharp, AUO Optoelectronics and Tianma have expanded into the first-level business since 2019, and have achieved some remarkable success. The influx of new entrants not only intensifies competition, but also stimulates innovation, forcing traditional firms to adjust and expand their product range.

Table 1: Panel supplier automotive tier 1 supplier business in the first half of 2024

After drastically improving technology and expanding business coverage, the automotive business became an important revenue pillar for AUO Optoelectronics (16%), Intron Optoelectronics (23%), Tianma (25%), and Japan Display Company (55%) in 2023. In 2019, Innolux established a 100% holding subsidiary CaruX and successfully transformed it into a tier-1 company with multiple large-scale integrated display panel projects. In 2023, AUO Optoelectronics merged with BHTC to improve the smart mobility business matrix and drive its transformation towards a smart cockpit solution provider. In 2022, Tianma established Jiangsu Tianhua Automotive Electronics Technology Co., Ltd. and Wuhu Tianma Automotive Electronics Co., Ltd. to expand the first-class display module assembly business. In summary, despite the low shipment growth rate of these three panel suppliers in 2023, the revenue growth rate still reached double digits.

Table 2: Automotive business performance of major panel suppliers in 2023