CETC Fenghua, a display equipment maker under China Electronics Technology Group Corporation (CETC), has supplied one cleaning machine and six degassing units to LG Display’s module line in Vietnam. As someone whose work is mechanical equipment design, this news cannot simply be passed over, because degassing and cleaning equipment are core back-end process equipment that determine cell reliability in the OLED module assembly process.
CETC Fenghua holds over 65% share of the smart degassing equipment market within China. The fact that this marks its first direct transaction with a major domestic (Korean) panel maker reads as a signal that cracks are appearing in the OLED back-end equipment market, which had until now been effectively dominated by Korean and Japanese equipment makers. In the degassing process, the precision of pressure profile and temperature control inside the vacuum chamber directly determines the cell defect rate, so this was not a segment that could be entered on price competitiveness alone. Nevertheless, the fact that a direct transaction was concluded means CETC Fenghua’s process reliability has reached a certain threshold.
This is not someone else’s problem for the secondary battery R2R equipment industry either. The vacuum and thermal management equipment markets for the formation and logistics processes have a similar structure. Domestic equipment makers should take note that the pattern of Chinese equipment makers building a track record on their domestic capacity before entering direct transactions with major overseas customers keeps repeating.