In 2024, even as many tightened their wallets, the gaming industry managed to pull off a spectacular feat. On the release day of Black Myth: Wukong, PS5 consoles flew off the shelves, gaming hardware sales spiked across platforms, and the stock prices of several related companies on the A-share market hit their daily trading limits. Gamers, eager to dive into the latest hit, spent over RMB 6 billion (USD 840 million) in just a month.
This is a consumer base that isn’t afraid to splurge. Hardcore gamers, in particular, who seek the pinnacle of graphics and seamless performance, are more than willing to drop serious money on high-end setups.
One area riding this wave is the esports display market, which has seen unprecedented growth.
According to Runto Technology, in the first half of 2024, online sales of esports monitors in mainland China hit 2.69 million units, marking a 30% year-on-year growth. Revenue reached RMB 3.3 billion (USD 462 million), up 10% from the previous year.
Leading this charge is TCL China Star Optoelectronics Technology (TCL CSOT), a company that has dominated global shipments of esports display panels for several consecutive quarters. In 2023, TCL CSOT shipped around 5 million units, capturing more than 35% of the market.
Esports displays are just one branch of TCL’s business. After enduring a challenging period of price drops and market stagnation, the display industry is showing signs of recovery, fueled by technological advancements and growing demand.
A battle is heating up on the global stage, as Chinese and South Korean manufacturers vie for dominance in the display market. For TCL, expanding its footprint in this burgeoning sector has become a top priority.
Boosting LCD production through acquisitions
TCL is moving fast to ramp up its production capacity. Just last month, TCL CSOT secured the winning bid for LG Display’s LCD factory in Guangzhou. The deal, valued at approximately RMB 11.1 billion (USD 1.5 billion), includes a 70% stake in LG Display (China) and full ownership of LG Display’s Guangzhou operations.
LGD’s Guangzhou plant, its first overseas factory, houses an 8.5-generation LCD production line capable of churning out over 10 million units annually, producing display panels in popular sizes like 55, 65, 32, and 86 inches.
The sale reflects LG Display’s strategic shift away from the LCD TV panel market as it refocuses on OLED technology. For TCL, the acquisition represents a pivotal moment. As South Korean companies retreat from the LCD market, mainland Chinese firms are poised to capture over 70% of the global market share.
This move will significantly boost TCL’s capacity and market share in large-size display panels, reinforcing TCL CSOT’s position in the global LCD TV panel industry.
TCL CSOT’s journey into the IT display sector began in 2019 when it acquired Samsung’s 8.5-generation production line in Suzhou and established a base in Guangzhou. The Suzhou facility, now a leader in high-end esports display manufacturing, has cemented TCL CSOT’s foothold in this booming market, delivering consistent returns.
TCL’s panel business is showing robust growth. In the first half of 2024, the company generated RMB 80.224 billion (USD 11.2 billion) in revenue, a 40.39% increase year-on-year. Net profit attributable to shareholders nearly doubled to RMB 995 million (USD 139.3 million).
The semiconductor display segment was a key driver, contributing RMB 49.877 billion (USD 7 billion), up 40.4% from the previous year. In the second quarter alone, semiconductor display profits surged more than threefold to RMB 2.157 billion (USD 302 million).
TCL remains a major player in the large-size TV panel market, consistently ranking among the top two globally. Its small- and medium-sized display panel business is also gaining momentum, ranking second in overall monitor shipments and leading the global esports display market.
South Korea exits, China transforms
As the display industry shifts, competition between TCL and South Korean manufacturers is entering a new chapter. South Korean giants like Samsung and LG Display are gradually exiting the LCD market, shifting their focus toward OLED technology.
This pivot is partly driven by the rise of Chinese players like BOE Technology and TCL CSOT, who have gained significant ground in the LCD market by applying intense price pressure. With economies of scale and cost advantages, these Chinese companies have forced their South Korean competitors to pull back.
In response, South Korean manufacturers are doubling down on OLED technology, leaning on their technical expertise to avoid price wars and seize new opportunities.
Meanwhile, BOE and TCL CSOT, leaders in mainland China’s display panel industry, are ramping up efforts to expand their OLED capabilities.
BOE, with production lines ranging from G4.5 to G10.5 in LCD and G6 in AMOLED, serves a wide array of devices from smartphones to televisions.
TCL CSOT has partnered with Japan’s JOLED to strengthen its position in the large-size printed OLED market.
Though LCD technology faces stiff competition from newer display formats, its established manufacturing systems and lower costs keep it competitive, especially in lower-end markets.
As the industry continues to evolve, South Korean firms are expected to focus on OLED to maintain their edge, while Chinese manufacturers like BOE and TCL CSOT will continue capturing more of the LCD market—and are making strides in OLED technology to challenge South Korea’s dominance.
For TCL CSOT, this path promises not only expansion but transformation.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Lin Qingqing for 36Kr.