“BOE has benefitted not only from Samsung’s LCD outsourcing strategy, but also by aggressively developing direct relationships with Chinese mobile phone makers,” said Terry Yu, senior analyst for small and medium displays and display technologies for IHS Technology, formerly DisplaySearch.

“BOE, Tianma, and InfoVision are all focusing their Gen 5 capacity on the mobile phone market, placing strong emphasis on a-Si based mobile phone displays.”

Display module makers in China also intend to improve their market share in the high-end mobile phone display market. For example in 2014, BOE, Tianma, and China Star attracted industry attention when they announced their Gen 6 LTPS investment plans.

Truly, a local traditional Chinese LC module maker, also announced it was investing in Gen 4 AMOLED manufacturing capabilities.

“Until these capacities are ready in China, however, stronger competition in the high-end mobile phone display market will be primarily centered on panel makers in other parts of Asia, especially among Japan Display, Sharp, and Samsung Display, which have aggressive plans for the Chinese smartphone market in 2015,” Yu said.

Reacting to lowered demand for handsets, OLED module makers have been aggressively promoting AMOLED products in China, but they still face competitive pricing pressure. For example, the average price for 5” HD (1280 × 720 294 PPI) AMOLED modules in China’s open market, excluding cover glass and lamination cost, has fallen from $43 in Q1’14 to $25 in Q1’15. 5” HD display modules are widely used in handsets with high cost-performance (CP) value ratios, with retail prices that vary from $95 (599 CNY) to $160 (999 CNY).

With increased competition, low-end high-CP value handset prices are expected to fall as low as $80 (499 CNY) in 2015, so $25 AMOLED module costs will still face bill of materials (BOM) cost-control challenges.

On the other hand, in order to differentiate their products, local Chinese brands plan to adopt FHD (1920 × 1080, normally more than 400 PPI) displays on the higher-end high-CP value handsets, with average prices of $160. Local smartphone brand Meizu has already launched its first sub-brand handset, Noblue Note, equipped with a 5.5” FHD display, selling for $160 (999 CNY).

“the pricing pressure of these FHD displays will lead to the even more intense competition among FHD resolution display module makers in 2015.” according to Yu.

“Local Chinese brands are now simplifying their handset models, in order to achieve better revenue performance,” Yu said. “Larger orders for each handset model will drive stronger competition among leading global panel makers.”