(Yicai Global) Aug. 10 -- Signaling Chinese companies’ intent to seek and strengthen cooperation, Li Dongsheng, founder and chairman of electronic giant TCL Technology Group, recently visited more than 10 partners in South Korea and Japan.

During the first 10 days of the ongoing East Asia trip, aimed at strengthening cooperation with Korean and Japanese firms in the semiconductor and display panel sectors, Li met first with partners such as LG and Samsung. 

Consolidating ties with existing clients was the primary aim of the visit, Huizhou-based TCL said.

Affected by a contraction in demand for liquid-crystal display panels and a decline in prices, TCL’s net profit in the first half of the year is expected to sink by about 90 percent from a year earlier.

The global LCD panel market has experienced oversupply this year and the industry is now at the bottom of the downward cycle. With Samsung previously suspending the purchase of LCD panels to run down inventory, it has become urgent for TCL to maintain ties with downstream customers.

South Korean companies have gradually withdrawn from this field, with Samsung completely terminating its LCD panel output in June, while LG also plans to shut its LCD panel production lines locally this year.

Major TV Suppliers

But Samsung and LG remain the world’s major television suppliers and TCL China Star Optoelectronics Technology, in which TCL owns the controlling stake, is the world’s second-largest LCD panel supplier. This means China and South Korea have room to deepen collaboration in the supply and demand of LCD panels.

In addition, though China accounts for nearly 70 percent of global LCD panel shipments, it still lags behind South Korea in the field of organic light-emitting diode panels. And China’s upstream core equipment and materials for the production of panels still rely on imports from South Korea and Japan.

Samsung Display, which has 70 percent of the world’s OLED handset panel, is also a shareholder of TCL China Star Optoelectronics Technology. And TCL China Star’s development of the new OLED panel business will not succeed without support from South Korean and Japanese corporations. Therefore, the second aim of Li’s trip is to pave the way for new production lines.

TCL China Star is now constructing an 8.6-generation LCD panel production line in Guangzhou, whose products will meet demand in the fields of information technology and in-car display devices. TCL also plans to build a production line to manufacture medium- and large-sized printed OLED panels in Guangzhou.

Always Optimistic

Li has always been optimistic about the future of printed OLED panels, with TCL having collaborated with Japanese display technology company Joled earlier. The pair joined hands to facilitate the industrialization of large-sized printed OLED panels. It is believed that Li’s trip will continue his efforts in this regard.

Expanding the semiconductor business was the third purpose of Li’s visit. In recent years, TCL has tapped into the fields of semiconductor and photovoltaic materials through the acquisition of Tianjin Zhonghuan Semiconductor. It also expanded its business scope by investing in upstream polycrystalline silicon projects this year.

Li visited a number of chipmakers in South Korea and expressed his views on China-Korea semiconductor industry collaboration on his account on the Twitter-like Weibo.

He believes that South Korea and Japan have advantages in semiconductor devices and electronic chemicals, while China has a huge market and corresponding industry. So the potential for industrial partnership between the three countries remains huge.

Editors: Liao Shumin, Peter Thomas