Chinese Touchscreen Industry: Competitive Insights – The Chinese touchscreen industry is still in its growth stage, characterized by low industry concentration. Apart from a few touchscreen companies with complete intellectual property rights, there are much more manufacturing companies that do not own their own intellectual property rights.
At present, the main listed touchscreen companies in China include IRTOUCH, OFILM, Laibao Hi-Tech, Token Science, SUCCESS ELECTRONICS, etc. Most companies primarily engage in small-size capacitive screens, while IRTOUCH specializes in infrared touchscreen products. In recent years, numerous companies have aggressively launched consumer capacitive screen projects, intensifying competition in the small-size touchscreen industry. At the same time, the medium-size and large-size touchscreen market ushers in more development opportunities with less competition.
Despite not being as developed as touchscreen pioneers like North America, Japan, and Korea, the Chinese touchscreen industry has advantages. Its advantage is not limited to price. It is estimated to grow by utilizing policy, location, and technology development.
Chinese Touchscreen Industry – Favorable Policy
In recent years, the touchscreen-related component and sensor manufacturing industry has benefited from a number of government industrial policies. The governmental support and promotion of the development and industrialization of core technologies such as flexible displays and smart sensors can be seen in industrial policy reports such as the “Guiding Catalog of Key Products and Services in Strategic Emerging Industries (2016 Edition)” and “The Catalog of Industries Encouraging Foreign Investment (2020 Edition)”. These policies designate manufacturing of new-type electronic and touch components as strategic emerging industries, encouraging foreign investment. The application fields of touchscreen such as vehicle smart terminals, smart manufacturing, and smart home appliances, have been included in the industrial development plans and policies such as “Made in China 2025”, “China’s 14th Five-Year Plan and Outline of 2035 Long-term Objectives”.
The support of industrial policy is the prerequisite for the survival and development of enterprises in the industry in China. Currently, the introduction of the country’s industrial policies holds significant guidance for the touch industry’s development and related company strategies. The market size of the touch industry will continue to grow with industry policy support.
Technology Development
Touchscreen product research and development began in the United States during the 1960s, with the Japanese industry credited for its maturity and growth. As applications became increasingly popular, the Japanese industry developed a touch screen production process suited for mass production, claiming over 80% of global production capacity. In order to control the production technology, the Japanese industry has always insisted on not transferring the technology.
It wasn’t until the 1990s that South Korean and Taiwanese manufacturers achieved breakthroughs in touch screen technology and mass production. However, their production capacity and technical level are still relatively low compared with those of Japanese companies.
Compared with Japan, South Korea and Taiwan, the touchscreen manufacturing industry of mainland China started even later. Initially, manufacturers from the Pearl River Delta region held dominance, operating on a smaller scale, focusing on middle to low-end products. The majority focused on producing resistive touch screens due to the higher growth rate of consumer terminals incorporating them.
Most manufacturing firms, primarily privately owned or Taiwanese companies, entered the production and sales of resistive touch screens. However, due to small scale, low technical prowess, and relatively poor production conditions, a significant gap existed between its standards and international norms. Furthermore, most manufacturers were still prioritizing the production of digital touch screens over high-end analog touch screens. Limited production capacity and unstable quality directly hinder collaboration with major industry players such as Japan and South Korea. Currently, the Chinese touchscreen market holds only about 1% of the global market share, yet its development shows promising momentum. Analysts predict that the country’s touch screen market will experience an annual growth rate of 25% in the coming years.
Chinese Touchscreen Industry
The bright outlook for the Chinese Touchscreen Industry stems from policy, technological, and market competition advancements. The robust backing of national industrial policy will significantly boost the industry. Technology is maturing, expanding touchscreen product applications and markets. Industry competition is moderate, promising ample opportunities.
The touch industry comprises a lengthy industrial chain, necessitating substantial capital, labor investment, and a significant accumulation of technology. Japan, South Korea, Taiwan, and mainland China currently dominate the distribution of the touch industry chain, exhibiting relatively high industry concentration. Compared with Japan and Taiwan, the labor cost in the mainland has certain advantages.
As the electronic information industry advances and downstream terminal market demand grows, the location advantages of touch screen manufacturers in mainland China are evident. Continuous advancements in production technology and the local substitution of imported raw materials have bolstered the industrial competitiveness of mainland enterprises. Following the lifting of epidemic control measures and lockdowns, the touch industry’s production capacity will accelerate its shift to China.
Domestic Industry Regional Distribution
Guangdong and Taiwan primarily host China’s touch display industry. There are also many companies and factories located in Fujian and Sichuan Provinces. To name some representative listed companies here: Laibao Hi-Tech (002106), HOLITECH (002217), Token Science (300088), Triumph Technology (600552), etc. Each of these companies has its own areas of expertise.
For example, Laibao Hi-Tech’s main business is R&D and production of flat panel display materials and touch and control components. Prominent products encompass ITO conductive glass for small to medium-sized flat panel displays, color filters, TFT-LCD panels, and medium to large-sized capacitive touch screens.
HOLITECH manufactures liquid crystal displays, touch modules, and smart hardware products, offering integrated development, design, production, and sales services. The company’s primary products include display modules, touch modules, camera modules, fingerprint recognition modules, wireless charging modules, and cover glass.
Top One Tech Ltd. specializes in the design, research, development, manufacturing, and sale of touch screens, touch screen monitors, and all-in-one computers. Founded in 2010, it is located in Shenzhen, Guangdong, China, with a plant covering an area of 5,000 square meters. It has accumulated more than ten years of manufacturing experience in the touch screen industry.
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