Hisense Launches the First LCM Production Line in China’s Color TV Industry

BEIJING, Sept. 24 /Xinhua-PRNewswire/ -- Hisense announced that on September 19 the Hisense LCM production line was formally put into production in the Hisense Information Industrial Park, Qingdao Economic and Technological Development Zone. As the first batch of “Hisense Made” LCD products rolled off the production line it declared the end of an era in which China relied completely on foreign-brand LCM for production as Hisense created China’s first LCM production line in the domestic color TV industry.

In fact, as early as three years ago, Hisense had embarked on preparing for the LCM business. So far, Hisense has completed its project planning and attained its target for phase I: the first production line with an annual capacity of 500,000 pieces of LCM of sizes ranging from 15 to 42 inches and the panel repair line. Between 2007 and 2009, Hisense plans to invest RMB700 million and install five LCM production lines in three stages. The current production line put into operation was simply stage I of the plan and the 2nd line will be launched by Hisense in the first half of next year. The 3rd production line will be completed by the end of 2008, by which time the manufacturing capacity will be lifted to 1.5 million pieces. All the five production lines will be in place by 2009 and the annual capacity will hit 3 million pieces. In the middle of this period, Hisense will also install an LED backlight module production line.

“Module” is a display assembly integrating display elements, connectors, IC, PCB, backlights and mechanics,” said Dr. Liu Weidong, manager of the LED Backlight Project of State Program 863 and technological leader of Hisense Module Business, “In simple words, ‘module’ is generally referred to by us as an LCD panel.” As per the forecast of DisplaySearch, the global market volume of FPD will hit 84 million this year and the figure will exceed 100 million in 2008 and LCD TVs will account for a big share of the market. Since the panel makes-up 60%-70% of the cost of an LCD TV, mastery of the upstream LCM technology will enable Chinese manufacturers to exercise much greater control over the cost of FPD products. Otherwise, Chinese brand FPD products will be marginalized, especially, with the continuous strengthening of upstream LCM functions and the decrease of controllable costs in a complete TV set. China will be gradually deprived of its right of speech in the global color TV industry. At that time, the “Manufacturing Power” is nothing but a reclaim for China. Mr. Zhou Houjian, chairman of Hisense Co., Ltd. said that Hisense held the same determination as in the development of the HiView chip. Hisense resolved to succeed in the module industry and expects to master the two key components of TV sets (modules and chips) so as to optimize products, improve efficiency, reduce costs and transform the status quo of China’s color TV industry and quickly lift Hisense’s global competitiveness.

Mr. Lu Renbo, vice director of the Market Economy Research Institute of the Development Research Center of the State Council believes that the precondition for a TV manufacturer to touch LCM is: firstly, adequate sales volume and competitive cost, and secondly, strong technological strength. Mr. Lu deemed that it was the right time for Hisense to launch its LCM production line after ranking No. 1 in the domestic FPD sector for three consecutive years. Particularly, Hisense secured the support of State Program 863 to its project “Development of Low Cost Dynamic LED Light Source System.” This was the first color TV project ever included in the State Program 863. In July of this year, the development and industrialization of LED backlight modules for large-screen LCD TVs rendered Hisense a winner of a key project of the Electronic Development Fund. At the same time, Hisense launched the first large-size LED backlight LCD TV. Dr. Liu Weidong told reporters, “Cashing on the advantage of Hisense’s video processing chip, Hisense is able to independently develop over 60% of LCM components.”

Chairman Zhou Houjian pointed out, “The entry into the module sector is down Hisense’s choice to establish a rational industrial pattern and grow bigger and circumvent risks.” The involvement of TV manufacturer in the R&D and manufacturing of modules and the readjustment of division of work and cooperation modes along the industry chain is a move to fully utilize respective expertise and will contribute to improve efficiency and reduce costs of parties concerned. In the mean time, it will help to provide prompt responses to consumer demands and launch market products with new technologies and new features. Hence, the seamless cooperation of TV manufacturers and upstream suppliers will enable the rapid launch of diversified products into the market, which will push the faster and healthier development of the whole flat panel TV industry.