Amid the fierce tariff war between China and the United States, BOE turns its attention to the European market

Currently, the tariff war between China and the United States is fierce. US President Trump has used tariffs to build a fence around China. Chinese companies have to turn their attention from the US market to markets such as Europe, the Middle East, Latin America and Africa. Among them, the European market is the most valued by Chinese companies.

In terms of overseas expansion, all major Chinese industries, especially in the manufacturing sector, have their own channels or production bases. According to insiders, BOE, a leading Chinese panel company, is also discussing whether to invest in companies like TPV (Taiwan Television) or evaluate whether acquiring a European brand that produces displays will help strengthen its market position. A supplier source familiar with BOE's thinking said that BOE has been evaluating plans to establish its own production capabilities in Europe for some time because the strategy can help them expand in the European market. "Obviously, as a leading enterprise, it is understandable that BOE has set its sights on the European market. After all, although the European market is not as good as the North American market, it has huge market potential and more lucrative profits. At present, the various confrontations between China and the United States are still likely to continue for a long time. In this case, BOE will face greater profit pressure in the second quarter compared with the net profit attributable to shareholders of 1.614 billion yuan in the first quarter of this year. After a slow rise in the first quarter, judging from the changes in the supply and demand situation, prices in the second quarter will remain flat across the board, or will fluctuate smoothly. According to RUNTO's forecast, in the second quarter of 2025, shipments in the global LCD TV panel market will decline both year-on-year and month-on-month, with a decline of between 3% and 5%.

The implementation of the US reciprocal tariff has ushered in a 90-day transition period. The pace and scope of brand owners' purchase rhythm from upstream panel manufacturers have obviously converged, and they are obviously holding on to wait and see. In addition, the marginal effect of the domestic "old for new" on TV demand has weakened. Faced with a weak market, the three major panel manufacturers BOE, CSOT, and HKC intend to control production and adjust the supply and demand relationship. Overall, the utilization rate of the high-generation production lines of major LCD TV panels in the world in the second quarter is likely to drop to around 80%. CSOT's acquisition of SDC and LGD's high-generation LCD panel production lines in China is catching up with BOE in terms of scale and capacity. CSOT also has its parent company TCL TV brand shipments. Its parent company has built production and manufacturing bases in Poland, Vietnam, Mexico, Brazil, India, Indonesia and Pakistan in Europe, forming a supply chain system in Southeast Asia, North America, Europe and South America. In 2023, overseas revenue will account for nearly 50%.

Let's take a look at BOE's layout of overseas production bases, which are mainly concentrated in Vietnam, that is, the second phase of the Vietnam Smart Terminal Project, located in the Ho Chi Minh City Industrial Circle (Phu My City, Ba Ria-Vung Tau Province), with an investment of 2.02 billion yuan, and an annual output of 3 million TVs, 7 million monitors, and 40 million electronic papers. This is BOE's first overseas self-invested smart factory, using intelligent manufacturing technology, and is expected to be mass-produced in 2025, mainly supplying the Asia-Pacific, EU and North American markets. In addition, BOE plans to build a module factory in Bac Ninh Province, Vietnam (near Samsung and LG factories), aiming to supply OLED/LCD modules to Apple, and it is expected to be put into production in 2025. At present, BOE has subsidiaries or R&D centers in the United States, Germany, Japan, South Korea, Singapore, India, Mexico, Brazil and other places, but the main manufacturing bases are still concentrated in China, and overseas are mainly module factories and terminal assembly.

Compared with CSOT, BOE's overseas layout is very insufficient. It is not surprising that BOE is rumored to acquire TPV (Top Video Technology). TPV is a TV and display manufacturer headquartered in Hong Kong, with production operations in Latin America and Europe. This is in line with BOE's strategy to layout the European market. If it acquires or invests in TPV, BOE's huge display panel production capacity will have an additional outlet and sales channels in major markets around the world. In the current increasingly severe global market environment, it is also a good choice.