BOE Chen Yanshun: Challenges and breakthroughs for successors

Text | Lu Wanlei

Recently, Huawei's triple folding screen mobile phone, its subversive design has attracted continuous attention from the market. As Huawei's first triple-fold screen mobile phone, the Mate XT adopts an inner fold + outer fold + double hinge design.

At the BOE Global Innovation Partner Conference · 2024, BOE Chairman Chen Yanshun revealed that BOE and Huawei have very in-depth cooperation in the field of folding screens, and Huawei's triple folding screen is jointly developed by both sides, which is unprecedentedly closely linked.

The cooperation between BOE and Huawei began in 2018, and Huawei's popular Mate series models are all supplied by BOE. After that, in 2022, BOE officially announced the success of the flexible "N" shaped folding display technology developed by the company, until it shined on Huawei this time.

As a panel giant, BOE not only cooperates with Huawei, but also has in-depth cooperation with Apple, Samsung, etc. One out of every four displays in the world comes from BOE, which shows BOE's market position in the field of displays.

BOE's breakthrough in the field of semiconductor display has broken the dilemma of China's "less screen", rewritten the pattern of the global display industry, and walked out of a world-class semiconductor display road of independent innovation from 0 to 1, from an icebreaker and a pioneer to a leader in the field of global semiconductor display.

Faced with the difficulty of choosing a route

Chen Yanshun, joined BOE after graduating from graduate school in 1994, and has been doing exactly 30 years now. Chen Yanshun's resume is very simple, from BOE secretary of the board of directors and vice president, step by step to executive director, president, and chairman, it seems that the road has been smooth.

When Chen Yanshun first entered BOE, the company was still in a difficult exploration period. However, with the professional advantages of senior accountants, Chen Yanshun quickly found a place to use.

In 1997, Chen Yanshun served as the person directly responsible for the listing, which contributed to BOE's B-share listing, and in 2001, it issued additional A-shares, becoming the first A-share and B-share listed company in Beijing. Since then, he has been responsible for the reorganization of the company's modern enterprise system and the transformation of the shareholding system.

At that time, coinciding with the opening of the market-oriented reform of China's property market, BOE was faced with the choice of doing industry or real estate, and for this reason, BOE had a big discussion that lasted for three days and three nights. In the end, Wang Dongsheng, the founder of BOE and the chairman of BOE at the time, said resolutely: "If they all go to real estate, then who will engage in China's industry?" ”

At the beginning of the 20th century, China had a long-term "lack of cores and screens", and display panels were once China's fourth largest import. With the dream and sense of mission of China's industry, Chen Yanshun is on the road to solving China's "less screen".

At that time, the global display industry was at the crossroads of technological choices, and was hesitant to take technical routes such as PDP (plasma display), FED (field luminescence display), and TFT-LCD (liquid crystal display).

In 2002, Chen Yanshun made a long report to completely analyze the development of the domestic electronics industry. Chen Yanshun and his team judged that TFT-LCD based on semiconductor technology will have more long-term development potential.

LCD panels are often fiercely competitive between countries, and the industry has a clear transfer path: the technology was invented in the United States in the 1960s, and Japanese companies almost monopolized the LCD industry after the 80s. In the mid-90s, Korea bucked the trend and invested in the introduction of Japan's technology, and with the strong support of the government, it quickly completed its scale expansion, and Korean enterprises completed catch-up.

BOE started from scratch, and it was not easy to get a piece of the pie. In 2001, when the LCD market entered a trough and Korea's Hyundai Corporation was ready to sell its TFT-LCD business, it was an opportunity for BOE.

After two years, in 2003, BOE announced that it had completed the acquisition of Korea's Hyundai TFT-LCD business for US$380 million, officially entering the field of liquid crystal display.

Development is the best response

BOE officially entered the field of liquid crystal display from 2003 to 2018 to become the largest enterprise in the field of semiconductor display in the world, which is a long and tortuous road.

Due to the high requirements for technology and capital of liquid crystal displays, Chen Yanshun said that this is a highway with "no export", "without high investment and scale, it will not be able to enter the first camp, and it can only be suppressed by first-line manufacturers without the power to fight back."

In September 2003, BOE began to invest in the construction of the fifth generation TFT-LCD production line in Beijing. In 2004, when the production line was still under construction, the panel industry began to enter a downward cycle, and in 2005, BOE directly lost 1.587 billion, and in 2006, the loss expanded to 1.771 billion. For a time, Jingdong was facing a survival problem.

In the second half of 2007, the LCD panel out of the cycle, the price soared, BOE turned losses into profits, can be described as "escape from death"! After relieving the momentum, BOE summed up the lessons and came to the conclusion that "the scale is too small", if the production capacity does not reach the top three in the world, it is difficult for the company to make a profit - this means that BOE needs to build more production lines.

However, a liquid crystal display production line can easily make billions to tens of billions of yuan, where can it make money? This is also the top priority in front of Chen Yanshun's team, in his design, BOE to lay out more than a dozen production lines.

In the face of the market law of the panel industry, BOE has explored a unique development model, that is, in-depth cooperation with local governments and banks.

In 2010, BOE and Hefei City to build a 6th generation production line, the cost of 15 billion yuan, BOE 6th generation line put into operation, within 3 months will increase the yield rate to more than 90%, the end of the mainland large-size LCD panel all dependent on imports. Since then, BOE has cooperated with Beijing, Wuhan, Chongqing, Fuzhou, Ordos, Chongqing and other places to build 11 production lines.

Chen Yanshun recalled that in order to quickly build a production line, the temperature in winter is extremely low in Ordos, and we are worried that the construction period is not enough, so we go to the construction site ourselves to ensure that the products are lit up as scheduled.

With the accelerated release of production capacity of a number of production lines, BOE gradually occupied a market position, in 2016, BOE in the smartphone display, tablet computer display, laptop display market share has reached the world's first, Samsung are looking for BOE to purchase LCD panels.

At the beginning, the controversy surrounding BOE was also settled. Chen Yanshun said: "In the face of doubt, development is the best response."

Chen Yanshun's challenges and breakthroughs

In June 2019, the BOE General Meeting of Shareholders approved the list of the new board of directors, and Chen Yanshun replaced the founder Wang Dongsheng as the new chairman of BOE.

Wang Dongsheng's evaluation of Chen Yanshun is that he has experienced the whole process of the company's transformation and entrepreneurial development, and has played an important role in key turning points such as shareholding reform, company listing, overseas mergers and acquisitions, major project investment and financing, and Internet of Things transformation.

In 2019, BOE's shipments accounted for 22% of the global market, and one out of every four LCD screens in the world came from BOE. Due to BOE's market position, China's electronic information industry has solved the problem of "less screen".

When Chen Yanshun took over, BOE was already the overlord of the display screen, but there were still many challenges, especially the global display panel had entered a difficult period, and the industry's production capacity was oversupplied.

Chen Yanshun made a decisive strategic adjustment, in addition to consolidating the leading position of LCD, focusing more on OLED, emerging Mini LED and Micro LED fields. In his opinion, flexible OLED foldable and rollable has become a new trend in panels.

In hindsight, this time Chen Yanshun bet in the right direction again. In 2021, BOE's flexible screen market share ranked first in the domestic industry and second in the world. By 2023, with the explosion of OLED, BOE will achieve a total revenue of 174.543 billion yuan, of which the proportion of innovative business has risen to 30%. BOE has changed from "global LCD panel hegemon" to "domestic flexible screen hegemon".

In March this year, BOE announced an investment of more than 600 billion yuan to build China's first 8.6 generation OLED line.

Despite being a global hegemon, BOE's sense of crisis has always existed. Chen Yanshun recently announced that the "Nth curve" of corporate strategy is upgraded, which means that there are different types of growth curves.

In Chen Yanshun's view, BOE should not only lead the "display everywhere", but also open a new "screen of things" road.

For BOE's strategic choice, Chen Yanshun has his own logical judgment: "When facing a strategic choice, we grasp two aspects, one is the global vision of 'standing on the moon and looking at the earth', that is, not only looking at how China develops, but also how the world develops; ”

Today, Chen Yanshun has been in BOE for 30 years and has witnessed many rounds of cycles in the industry.