How LCD panels are evolving

The theme for the 2023 Yahoo Finance Invest Asia was Beyond Borders: Collaborating for Financial Excellence. Innolux Chairman and CEO Jim Hung (3481.TW) spoke with Yahoo Finance Executive Editor Brian Sozzi to discuss technology trends and demand, locally and globally.

Hung points out that LCD panels are becoming more energy efficient and are better at signal transmission, saying the most important focus is what is “behind the screen." Hung describes how these panels are not just for televisions anymore, especially given how technology is being incorporated into our everyday lives, noting that "it's become a human's machine interface, so that's given a new value to the panel."

Regarding AI, Hung believes that the process of production will be “much more” efficient and notes a “significant impact for the value chain.” Hung believes that with AI's help, the TV could become "a hub" for home operations—streamlining the overall productivity in the home.

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Video transcript

BRIAN SOZZI: Hello, everyone. Welcome to the 2023 Yahoo Finance Invest Asia conference. I'm Brian Sozzi, Yahoo Finance's Executive Editor. This year, investors continue to face numerous challenges as the economic recovery process proves to be lengthy, with factors such as inflation, geopolitical tensions, and national disputes keeping the global economy on edge. However, in the two years since the pandemic end, market goers have continued to see new opportunities and emerging issues.

This year, under the theme beyond border, collaborating for financial excellence, we will dive into the future economic development of the Asian region. We brought together many top corporate leaders, influential decision makers, and renowned figures to help us dissect how to navigate these challenging times. We will explore how to capitalize on future industry trends like AI, 5G, and fintech, amid the rapid evolution of technology. We will also explore how startups can create business opportunities, and how to approach a diverse investment strategy in the context of real estate and hot topics like ESG.

Now, let's get started with the 2023 Yahoo Finance Invest Asia Conference. Welcome to Yahoo Finance Invest Asia, and joining us now is Innolux Chairman and CEO Jim Hung. Mr Hung, thank you for joining us. I know these are very busy times. We appreciate it.

JIM HUNG: Hi. Morning, Brian. Thanks for having me here.

BRIAN SOZZI: Take us through the state of your business making, I believe, what? LCD panels and displays? Really touching consumers, not only in your home market, but around the world, what are some of the biggest trends you're seeing right now?

JIM HUNG: Right. I think, overall speaking that LCD TV or panel come out at the very beginning as a device for the digital display images. However, it has been pretty much reached, I won't say the limit, but it's reached some kind of the bottleneck, given the demand supply imbalance. Right now, that what we are seeing a lot of the challenges coming is the price side. However, we do see more value from the panel itself.

Actually, not from what we have been seeing on the front. Like people now are looking for bigger size or higher resolution, but we will say that some of the conditions we cannot see with the bare eyes include the lower power consumption, or effective signal transmission, or even the heat dissipation. Those are the things we are actually doing a lot of the investment into, and we believe that our new role as a panel maker behind the screen is like a pivot for the signal and the power transmission. In a nutshell, we are not just a panel maker we are more as an expert in making the micrometer labels transmission on the glass substrate.

So a lot of the new applications like LCD window, LCD antenna, or even our recent announced investment on the panel level packaging, we believe, will put the original panel makers in a very diversified new position.

BRIAN SOZZI: I was telling you off camera, I recently got an 80 plus inch TV, and it has changed my life, but I'm already looking for something bigger. I can't afford it, but I'm already now thinking what would a 100 inch TV look like in my house. My question to you is, what is next? I can't imagine I'm alone in thinking on what is beyond the big screen TV? Does it fold? I imagine you have great insight into some of these things.

JIM HUNG: Right, right. I think like you said that, previously, people looking at the TV or the panel itself only just for display, the beautiful image, like a beautiful face presenting on the beautiful images, but if you look at the company itself, the companies like Innolux because right now we are putting a lot of integration into the software. We're talking about the IoT, for example, that a lot of sensors around the house, around the car, so the application on the panel itself is no longer just on TV. It's no longer just on the monitor or the panel itself. It's actually around the whole world.

And that actually puts a lot of the new applications into the panel itself. So I do think that it's become a human machine interface so that gives a new value to the panel.

BRIAN SOZZI: How will AI or artificial intelligence change what you do?

JIM HUNG: Oh, definitely. I think the AI itself is not just a device upgrade. It actually give a lot of the value to the whole industry. For example, the cycle has been very volatile, consumer electronics is being up and down significantly, and we do believe that with the AI's help on the market oriented side, we can be better forecast for the demand, and for the hub, for the inventory adjustment, and even if you're looking back into the factory itself, the whole manufacturing process, you know that the panel manufacturing process actually requires dozens of the precise manufacturing from photo biography, liquid crystal spray, so on and so forth, right?

So I think with the AI's help, actually, that the whole process can be much more efficiently, and also we're talking about the ESG. We think that with the AI's help a lot of demand can be customized, a lot of the waste during the whole process can be mitigated. So I think that, yes, AI is definitely going to have a significant impact into the whole value chain.

BRIAN SOZZI: Do you think we'll be interacting with our large screen TVs like we do a tablet?

JIM HUNG: Yes and no. You mean that how the AI will impact the TV like we impact into the notebook, right?

BRIAN SOZZI: Yes. Correct. I mean, do you see us going up to our TV because of this new powerful AI, and we're touching the screen, and we unlocking all this information that maybe we didn't have before?

JIM HUNG: Right. Right. Yes and no. The reason I'm saying that is because, first of all, the notebook is probably more for the business use. A lot of the applications on the notebook is still for the office, for the education related. So AI, on that perspective, definitely help the whole process become much more efficient when we're doing our work, so on and so forth. But TV itself, so far, was still more for the entertainment.

However, from the other side, TV is kind of the center of the whole living room, right? So a lot of people do talk about the possibility that with the AI's help in the TV in the whole living room, it could become a hub for the whole dining room, living room control, for the air conditioner, for the washing machine, so on and so forth, even can connect automatically with the car and other applications.

BRIAN SOZZI: Just giving you a world view, what's demand look like for your televisions and your notebook computers right now?

JIM HUNG: Right. OK. I will answer that probably in 2/4. First of all, on the global economy, I think, obviously, inflation and job market, to some extent, the reason rising geopolitical concern. Those are the things interrelated with each other, and will definitely have some of the concerns to people and that will probably cap on some of the demands, even inflation probably reached a peak or almost reached a peak, the impact to the job market is yet to see. So that is something from the overall economy side.

However, on the particularly on the technology itself, I will say that, definitely, the whole digitalization or even to an extent, digital transformation through TV, through notebook, will impact on people's daily life. I think the generative AI is a catalyst. And, obviously, it will create opportunity and challenge on both sides. So I think flip on the right side, you will overcome the challenge.

BRIAN SOZZI: As you look into 2024, what's your biggest challenge as a leader and as a company? Just given everything we have, we're seeing in the world right now, these are just very risky times, not only for leaders but for people on the ground, households, you name it.

JIM HUNG: Right. Right. Like I said earlier, from the very top down, the economic overall definitely impact on the people's pocket. So how much money people can really spend, that will keep on some of the demand side. However, if on the other hand, I think the technology itself has been evolved very fast. I think that will be from the company perspective because each of the business cycle has become shorter and shorter, and that also-- and also a lot of abundant liquidity make the whole cycle become very difficult to predict.

So the volatility has become bigger, and that's where, as a business owner, that's the difficult thing, how to make the business more resilient, how to overcome each of the down cycle. And from my perspective, I would say that, actually, to break down the silo internally on the organization, and also to have a coherent team. It's probably the best way to overcome the downturn.