The new production line, when completed, will surpass BOE’s Gen 10.5 which started construction in December 2015 in Anhui Province in terms of generation and investment, marking a new milestone in the display area for CSOT.

CSOT currently owns two Gen 8.5 lines, namely its T1 and T2 lines, which can produce panels as large as 55", while the Gen 11 fab, when completed, will enable it to gain competitiveness and differentiation in large-size display market, because higher-generation production lines are more suitable for the economical cuts of large-size panels.

CSOT decided to build its Gen 11 LCD production line mainly based on two reasons. One is that the domestic competitors are mostly focusing on the Gen 8.5 line mainly producing 32" panels, leaving the market of larger sizes mainly depending on Korean and Taiwan suppliers.

Another reason is that as the traditional panels have been pushed into over-supply, and the ensuing price collapse has made the profitability weaker than that of larger-size panels. Therefore, establishing a higher-generation panel line will grant CSOT a substantial competitive edge against its local and overseas rivals.

The shipments of Chinese display panels have continued to increase. Even though the growth rate of the traditional display industry is slowing down, there is a huge demand for large-size high-resolution panels.

In recent years, the global market has seen the mainstream TV size shifting from 32" to 40"/43" or bigger, while in China the demand for larger-size TVs is especially strong. The market demand for large-size TVs is estimated to grow at an annual rate of more than 20% in the years to come.

Although displays larger than 55" account for merely 10% in today’s TV market, the prospect of extra-large LCD panels is still promising. CSOT’s ambition to build Gen 11 LCD fab is a strategy to win more stake and voice in the emerging market segment where large-size high-resolution TVs will be the mainstream.