Hong Kong Offshoring Graphic LCD Module Production

An economy that once thrived on manufacturing, Hong Kong SAR became an international financial hub over the decades. Most companies involved in production, especially of electronics, now have factories in the Chinese mainland instead, taking advantage of low costs in terms of land, material resource and manpower. This offshoring also means they are right in the middle of the mainland’s huge market.

In the graphic LCD module sector, Hong Kong has about 100 suppliers, but most make their products in the mainland. Some have chosen to maintain their R&D facilities at headquarters, while others have also relocated theirs. Yes International Co., one of the manufacturers that Global Sources interviewed for this article, has in its employ 500 production and 15 R&D personnel at its Dongguan factory.

HKSAR has also long been the mainland’s portal to the rest of the world. It is the largest export destination of China-made LCD modules, accounting for $3.306 billion of the $18.81 billion total value from January to August 2022, according to Gonyn, a Chinese market research firm. This translates to a 17.5 percent share during the period. The bulk of these shipments are sent to other countries. Based on available data, these deliveries out of HKSAR have been steadily increasing in recent years.

The Chinese mainland is the largest production base for LCD modules. It is expected to have a 45.57 percent market share or realize $100.872 billion out of the $221.38 billion projected worldwide sales value by 2028, according to QY Research. This is a bigger portion from 2021 when it achieved $62.299 billion or 41.93 percent of the $148.57 billion global total.

QY Research reported that small and midsize modules will continue to lead the LCD category globally and are projected to have a share of 61.33 percent by 2028.

 Legacy technology

Many displays may have graduated to advanced technologies, but legacy solutions remain viable options in various applications. Graphic LCD modules are one category that continues to enjoy steady demand because of their cost effectiveness. They are still widely used in some consumer electronics and are projected to benefit from increasing demand in the growing industrial control and smart home sectors.

The global industrial display market will be on the scale of $7.26 billion by 2025, broadening at a CAGR of 6 percent from 2017, according to Grand View Research.

The smart home industry, meanwhile, will reach $195.2 billion in 2026 from $115.7 billion in 2022, or at CAGR of 13.97 percent, based on projections by consultancy firm ChinaIRN. IDC is predicting that smart home control displays will have a CAGR as high as 60 percent from 2022 to 2027. In China alone, this category experienced a 106.4 percent surge year on year in 2022, according to IDC. In volume, it was 650,000 units shipped.

HKSAR’s graphic LCD modules

Most manufacturers from Hong Kong SAR offer not only graphic LCD modules but also dot-matrix and TFT-LCD types as well as LED variants.

Widely available graphic LCD modules are CSTN, FSTN and STN types in sizes ranging from 0.84 to 4.1in and dot resolutions of 240x128, 256x64, 320x240, 640x240 and 640x480. They are designed for industrial control systems, instruments and devices, smart home products and automotive applications.

Companies emphasize their ability to customize according to any requirement, with such orders representing over two-thirds of their shipments. They usually obtain glass substrates, filters, polarizers, crystal materials, driver ICs, backlights and adhesives from Chinese providers, but accommodate requests for other sources. Some manufacturers use ICs from Samsung, MagnaChip, Synopsys or Renesas.

Material and component costs have remained stable and will likely stay so until the first half of 2024. A similar stability is expected for the prices of graphic LCD modules.

Generally, this product category accounts for 10 to 30 percent of shipments of HKSAR companies, a ratio that most will likely maintain as they increase focus on TFT-LCD and LED modules in the coming years. The majority, however, are ready for any uptick in demand. Microtech Technology Co. Ltd, for instance, boosted its production by 30 percent in 2022 and will keep doing so through 2024. The supplier has more than 100 models of LCD and CTP modules. In the years ahead, however, it will pay more attention to its selection of TFT-LCD modules and AMOLED displays.