TCL Technology Group Corporation Annual Report 2022 (Summary)
Stock Code: 000100 Stock Abbreviation: TCL TECH. Announcement No.: 2023-010
TCL 科技集团股份有限公司
TCL Technology Group Corporation
ANNUAL REPORT 2022 (Summary)
March 30, 2023
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TCL Technology Group Corporation Annual Report 2022 (Summary)
Breaking the Adversity with Strengthened Basic Competitiveness
ANNUAL REPORT 2022 Chairman's Statement
2022 was a year full of opportunities and challenges. 2022 witnessed dramatic changes in the
global political and economic situation, from the outbreak of the Russia-Ukraine war, rising inflation,
sluggish market demand, to deteriorating trade environment, and significant economic slowdown.
These multiple factors brought tremendous challenges to the development of the high-tech
manufacturing industry. Due to the fluctuation of both industrial chain and supply chain,
manufacturers worldwide had to shift their focus from efficiency to both efficiency and safety. The
global industrial pattern was restructured. Under this background, China's high-tech manufacturing
industry also faced pressure of transformation and upgrading. We have built our competitive
advantages in the fields of semiconductor display and new energy photovoltaic, and will take the
opportunities of global energy transition and strengthening high-tech industrial chain, actively
respond to risks and turn crises into opportunities. We will continue to achieve high-quality corporate
development with technological innovation and advantages of economies of scale.
Facing the complex business environment of 2022, the Company maintained its strategic focus,
built a solid bottom line, and advanced steadily. The Company achieved a revenue of RMB166.55
billion, an increase of 1.8%, a net profit of RMB1.79 billion, with the net profit of RMB260 million
attributable to the Company’s shareholders, and net operating cash inflow of RMB18.43 billion,
continuously ensured its stable operation.
Affected by the global economic downturn, the demand from the end-users weakened, the prices
of large-sized panels dropped significantly, and the operating performance of the semiconductor
display industry hit a record low during the Reporting Period. The Company achieved a year-on-year
increase in the sales area of semiconductor displays at 8.3%, and earned a revenue of RMB65.72
billion, a year-on-year decrease of 25.5%, saw a full-year loss. Facing the operational challenges,
TCL CSOT upheld its bottom-line thinking, and pushed ahead with structural changes such as
organizational changes and management optimization. With strengthened advantages and shored up
weakness parts, TCL CSOT accelerated the adjustments to product structures, actively explored
emerging areas, and promoted balanced business development. In its large-size product business, TCL
CSOT has consolidated its leading position in TV panels with a high-end product strategy, and
vigorously developed commercial displays such as interactive whiteboards, digital signs, and video
walls. TCL CSOT ranked first in the world in the field of shipment of 8K and 120HZ high-end TV
panels and interactive whiteboards. As production lines dedicated to IT products, the t9 adopted oxide
semiconductor displays kicked off its SoP in Guangzhou ahead of schedule, and the G6 LTPS
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TCL Technology Group Corporation Annual Report 2022 (Summary)
production line in Wuhan proceeded as planned. Small and medium-sized products further
consolidated the business development, all of which would drive a new round of growth of TCL
CSOT.
With increasing transformation of global energy structure, the new energy industry has ushered
in historic opportunities. In response to the rapid development of the new energy industry, TCL
Zhonghuan continued to play its leading advantages in advanced capacity layout, technological
innovation, and cost efficiency, as well as the activation effect of institutional mechanisms. In 2022,
TCL Zhonghuan achieved a significant increase in its operating performance again, with a revenue
of RMB67.01 billion, a year-on-year increase of 63.0%, and a net profit of RMB7.07 billion, a year-
on-year increase of 59.5%. Ningxia Zhonghuan Phase VI project increased its capacity, and the wafer
projects were put into production in Tianjin and Yixing successively, with the advantageous capacity
rapidly increased. TCL Zhonghuan’s capacity for photovoltaic crystalline silicon was increased to
140GW, making it the world's largest silicon wafer supplier. The highly-efficient laminated tile
module intelligent manufacturing projects in Jiangsu and Tianjin have been entered the SOP, with a
steady increase in the market share. Through deepening collaboration with Maxeon in terms of the
supply chain, production, and channels, TCL Zhonghuan has accelerated its global business layout.
Affected by the economic environment, both Highly and Tianjin Printronics experienced a slight
decline in their operating performance, but they maintained strong potentials for recovery. The
investment business continues to focus on business layout and exploration alongside the industrial
chain in support of the Company’s main businesses.
The Company took product technology innovation as the core driving force, and empowered
manufacturing transformation and upgrading with digitalization. The Company insisted on investing
in cutting-edge technology fields such as new displays, new energy, and semiconductor materials.
During the year, the Company invested RMB10.78 billion in research and development, a year-on-
year increase of 22.9%. In 2022, the Company made 659 new applications for PCT patents, and 2,244
applications for patents of technologies and material in the field of quantum dot electroluminescence,
ranking second in the world. The semiconductor display business promoted the digitalized
management in the whole production process and entire product cycle. The Company has established
an industry-leading Industry 4.0 system for the new energy photovoltaic business, leading the
manufacturing revolution in the industry.
In the future, global economic development still faces uncertain factors, and the restructuring of
the political and economic patterns will intensively affect the economic trends of China and the rest
of the world. At present, China is dedicated to high-quality economic development and independent
development of high-level technologies, which brings significant opportunities for the development
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TCL Technology Group Corporation Annual Report 2022 (Summary)
of the high-tech industry. In the face of the complex and volatile internal and external environment,
the Company will focus on the pan-semiconductor industry that is “high-tech, asset-heavy, and long-
term” based on its goal of leading in the world, solidly achieve the pre-set strategic objectives and
business strategies, adhere to the bottom-line business thinking, ensure strong risk prevention, and
break the adversity with strengthened competitiveness.
The semiconductor display industry has moved downwards from the middle of 2021, and stayed
at the historic bottom for a long time due to the economic slowdown. Leading enterprises increasingly
focus on the supply-demand balance and industrial profits. With the industry integration, the Matthew
effect is becoming more prominent, and the industrial pattern becomes healthier and more reasonable.
The economy and demand are expected to stabilize in the near future, and the industry is expected to
rebound. The Company, guided by the 9225 Strategy, will continue to optimize the business, product,
and customer structures for its semiconductor display business. With the SoP of t9 producti on lines
based on medium-sized display panels featuring high added value, and the orderly progress of LTPS
6-gen production line, which mainly produces medium and small-sized display panels, TCL CSOT
will significantly improve its competitiveness in terms of business and product portfolio.
Driven by the transformation of the global energy structure and the goal of carbon peaking and
carbon neutrality, the new energy industry has entered a stage of rapid development. In terms of the
new energy photovoltaic business, the Company will further expand the technological and product
advantages of G12/N silicon wafers, accelerate the layout of advantageous capacity, and cooperate
with global partners to expand overseas markets. TCL Zhonghuan will provide an ongoing growth
engine to the Company. Several projects jointly invested by the Company and partners have been
launched, including 100 thousand tons of granular silicon, silicon-based materials and 10 thousand
tons of electronic polysilicon, which will further improve the Company’s layout in the new energy
photovoltaic and semiconductor material industry chain and enhance the stability of the Company’s
industry chain.
The manufacturing industry acts as the backbone of the national economy, while high-tech
industries represent national competitiveness. Being confident in the future development, we will
focus on core segments and drive the healthy corporate development in support of the high-quality
development of the industry and China’s manufacturing industry.
I would like to express my sincere gratitude for the trust of all our shareholders, for the support
from all our partners and users, as well as for the efforts of all employees!
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TCL Technology Group Corporation Annual Report 2022 (Summary)
March 30, 2023
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TCL Technology Group Corporation Annual Report 2022 (Summary)
Part I Important Notes
This summary is based on the full text of the 2022 Annual Report of TCL Technology Group
Corporation. To obtain a full picture of the operating results, financial position and future
development plans of the Company, investors should carefully read through the annual report released
on the media designated by the China Securities Regulatory Commission.
All the Company’s directors attended the Board meeting for the review of this Report and its
summary.
This Report and its summary have been prepared in both Chinese and English. Should there be
any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail.
Independent auditor’s modified opinion
□ Applicable √ Not applicable
Board-approved final cash and/or stock dividend plan for ordinary shareholders
√ Applicable □ Not applicable
Any capital reserves converted into share capital or not
√ Applicable □ Not applicable
The Board has approved a final dividend plan for the ordinary shareholders as follows: based on the Company’s share capital a s
at March 30, 2023, i.e., 17,071,891,607 shares, the capital reserve is to be converted into capital on a basis of 1 share for every 10
shares to all the shareholders. After the conversion, the total share capital of the Company will be changed to 18,779,080,767 shares.
Neither cash dividends or bonus shares will be distributed this year. Where any changes occur, before the implementation of the
dividend plan, to the total share capital of the Company due to any convertible bonds-to-stock programs, share repurchases, exercises
of equity incentives, new share issues in refinancing, etc., the dividend will be adjusted according to the principle of “adjusting the
total conversion amount under the same conversion ratio”, subject to the actual conversion amount.
Board-approved final cash and/or stock dividend plan for preference shareholders
□ Applicable √ Not applicable
Part II Corporate Information
1. Stock Profile
Stock name TCL TECH. Stock code 000100
Place of listing Shenzhen Stock Exchange
Contact information Board Secretary
Name Liao Qian
10/F, Tower G1, International E Town, TCL Science Park, 1001 Nanshan District,
Office address
Shenzhen, Guangdong Province, China
Tel. 0755-3331 1666
Email address ir@tcl.com
2. Main businesses or products of the Company during the Reporting Period
The Company’s main business structure consists of semiconductor display business, new energy
photovoltaic and semiconductor materials business, industrial finance and other businesses. The
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TCL Technology Group Corporation Annual Report 2022 (Summary)
Company will continue to optimize its business structure and concentrate its resources on its main
business, so as to achieve the strategic goal of two global leading core industries: semiconductor
display, new energy photovoltaic and semiconductor materials.
TCL TECH
Semi-conductor New energy photovoltaic & Semi- Industrial finance &
Other
display conductor materials investment
Zhonghuan Zhonghuan TCL
TCL CSOT China Ray TCL Capital Highly TPC
Photovoltaic Advanced Financial
M oka TCL Xinhuan/Xi
Juhua
Technology M icrochip nhua
For details of the Company’s business, please refer to “Part III Management Discussion and Analysis” herein.
3. Key Accounting Data and Financial Indicators
(1) Key accounting data and financial indicators in the past three years
Indicate whether there is any retrospectively adjusted or restated datum in the table below.
√ Yes □ No
Reason for retrospective adjustment or restatement: In accordance with the Interpretation No. 15 of the Accounting Standards for
Business Enterprises issued by the Ministry of Finance, the Company implemented related requirements and retroactively adjusted
relevant items of the financial statements as at the beginning of the year and the same period of the previous year. Such cha nge in
accounting policies has no material impact on the Company’s financial position and operating results.
2022-
2021 Over-2021 2020
2022 Change
Before After Before
After adjustment After adjustment
adjustment adjustment adjustment
Revenue (RMB) 166,552,785,829 163,540,559,623 163,657,700,477 1.77% 76,677,238,079 76,677,238,079
Net profit
attributable to
the company’s 261,319,451 10,057,443,528 10,064,253,118 -97.40% 4,388,159,018 4,388,159,018
shareholders
(RMB)
Net profits
attributable to
the company’s
shareholders
-2,698,210,800 9,437,240,976 9,444,050,566 -128.57% 2,933,248,153 2,933,248,153
before non-
recurring gains
and losses
(RMB)
Net cash
generated from
operating 18,426,376,609 32,878,450,437 32,878,450,437 -43.96% 16,698,282,775 16,698,282,775
activities
(RMB)
Basic earnings 0.0191 0.7463 0.7468 -97.44% 0.3366 0.3366
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TCL Technology Group Corporation Annual Report 2022 (Summary)
per share
(RMB/share)
Diluted earnings
per share 0.0185 0.7354 0.7359 -97.49% 0.3226 0.3226
(RMB/share)
Weighted
average return 0.52 26.46 26.48 -25.96 13.75 13.75
on equity (%)
The end of 2021 Change The end of 2020
The end of 2022 Before After Before
After adjustment After adjustment
adjustment adjustment adjustment
Total assets
359,996,232,668 308,733,133,305 308,749,696,062 16.60% 257,908,278,887 257,908,278,887
(RMB)
Owners’ equity
attributable to
the company’s 50,678,520,477 43,034,234,611 43,041,044,200 17.74% 34,107,795,454 34,107,795,454
shareholders
(RMB)
(2) Main accounting data by quarter
Unit: RMB
Q1 Q2 Q3 Q4
Revenue 40,566,851,319 43,955,329,809 41,992,680,714 40,037,923,987
Net profit attributable
to the company’s 1,352,533,125 -689,010,254 -382,858,737 -19,344,683
shareholders
Net profits attributable
to the company’s
shareholders before 611,565,003 -1,238,434,388 -1,259,772,878 -811,568,537
non-recurring gains
and losses
Net cash generated
from operating 3,863,953,881 5,152,681,862 3,645,252,917 5,764,487,949
activities
Indicate whether any of the quarterly financial data in the table above or their summations differs materially from what has been
disclosed in the Company’s quarterly or interim reports.
□ Yes √ No
4. Equity and Shareholders
(1) Table of the total number of ordinary shareholders and preference shareholders with resumed voting
rights as well as shareholding of the top ten shareholders
Unit: share
Total Number of Total number
number of ordinary of preference
ordinary shareholders shareholders Number of preference shareholders
shareholder at the with resumed with resumed voting rights at the
731,411 698,567 0 0
s by the end month-end voting rights month-end prior to the disclosure
of the prior to the by the end of of this Report
reporting disclosure of the reporting
period this Report period (if any)
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TCL Technology Group Corporation Annual Report 2022 (Summary)
Shareholdings of ordinary shareholders with more than 5% or the top 10 shareholders of ordinary shares
Increase/decre Number of non- Shares in pledge, marked
Shareholdin Number of Number of
Name of Nature of ase during the restricted shares or frozen
g percentage shares held at restricted
Shareholder shareholder Reporting held at the period-
(%) the period-end shares held Status Shares
Period end
Put in
pledge by
Li 143,665,80
Domestic Li
Dongsheng 0
individual Dongshen
and his g
/Domestic 6.79% 1,159,085,019 610,545,821 548,539,198
acting-in-
general legal Put in
concert
entity pledge by 253,620,00
party
Jiutian 0
Liancheng
Huizhou
Investment
Holding
Co., Ltd. State-owned
4.23% 722,144,427 0 722,144,427
and its legal entity
acting-in-
concert
parties
Hong Kong
Securities
Foreign legal
Clearing 2.28% 388,498,477 0 388,498,477
entity
Company
Ltd.
China
Securities Domestic
Finance general legal 2.19% 373,231,553 0 373,231,553
Corporation entity
Limited
CITIC
State-owned
Securities 1.71% 292,681,754 280,701,754 11,980,000
legal entity
Co., Ltd.
Guotai
Junan State-owned
1.34% 228,563,475 228,070,175 493,300
Securities legal entity
Co., Ltd.
Everbright
Securities State-owned
1.20% 205,004,054 204,678,362 325,692
Company legal entity
Limited
Foreign legal
UBS AG 1.15% 196,842,825 196,783,625 59,200
entity
GF Domestic
Securities general legal 1.12% 190,658,402 187,134,502 3,523,900
Co., Ltd. entity
Haitong
State-owned
Securities 0.96% 163,749,690 163,742,690 7,000
legal entity
Co., Ltd.
Strategic investor or general
Not applicable
legal entity becoming top-10
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TCL Technology Group Corporation Annual Report 2022 (Summary)
shareholders due to private
placement of new shares (if
any)
Mr. Li Dongsheng and Ningbo Jiutian Liancheng Equity Investment Partnership (Limited Partnership) became persons
acting in concert by signing the Agreement on Concerted Action, holding 1,159,085,019 shares in total and becoming the
Note on the above largest shareholder of the Company.
shareholders’ associations or Huizhou Investment Development Co., Ltd. and Huizhou Investment Holding Co., Ltd. became persons acting in concert
concerted actions due to equity relations. As at the end of the Reporting Period, there were 4,587 shares registered by Huizhou Investment
Development Co., Ltd. with the China Securities Depository and Clearing Corporation Limited and 722,139,840 shares
registered by Huizhou Investment Holding Co., Ltd. with the China Securities Depository and Clearing Corporation Limited .
Explain if any of the
shareholders above was
involved in entrusting/being Not applicable
entrusted with voting rights or
waiving voting rights
Explanation on repurchase
accounts among top 10 Not applicable
shareholders (if any)
(2) Total number of preferred shareholders and top 10 preferred shareholders
□ Applicable √ Not applicable
(3) Disclosure of property rights and control relationship between the Company and the actual controller
with block diagram
□ Applicable √ Not applicable
5. Existing bonds on the date of approval and disclosure of the annual report
√ Applicable □ Not applicable
(1) General Information on Corporate Bonds
Unit: RMB'0,000
Way of
principal
Bond Date of Value Outstanding Coupon repayment Place of
Bond name Abbr. Maturity
code issuance date balance rate and transaction
interest
payment
TCL
Interest
Corporation
payable
Corporate
annually
Bonds
October October and Shenzhen
Publicly October
19TCL03 112983 17, 21, 44,000 2.95% principal Stock
Offered in 21, 2024
2019 2019 repayable Exchange
2019 to
in full
Qualified
upon
Investors
maturity
(Tranche 3)
TCL Interest
Corporation payable
Corporate annually Shenzhen
July 19, July 23, July 23,
Bonds 19TCL02 112938 100,000 3.05% and Stock
2019 2019 2024
Publicly principal Exchange
Offered in repayable
2019 to in full
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TCL Technology Group Corporation Annual Report 2022 (Summary)
Qualified upon
Investors maturity
(Tranche 2)
TCL
Interest
Corporation
payable
Corporate
annually
Bonds
and Shenzhen
Publicly May 17, May 20, May 20,
19TCL01 112905 100,000 3.15% principal Stock
Offered in 2019 2019 2024
repayable Exchange
2019 to
in full
Qualified
upon
Investors
maturity
(Tranche 1)
TCL
Interest
Corporation
payable
Corporate
annually
Bonds
August August and Shenzhen
Publicly August
18TCL02 112747 17, 20, 200,000 3.55% principal Stock
Offered in 20, 2023
2018 2018 repayable Exchange
2018 to
in full
Qualified
upon
Investors
maturity
(Tranche 2)
TCL
Interest
Corporation
payable
Corporate
annually
Bonds
and Shenzhen
Publicly June 5, June 6, June 6,
18TCL01 112717 17,002 4.00% principal Stock
Offered in 2018 2018 2023
repayable Exchange
2018 to
in full
Qualified
upon
Investors
maturity
(Tranche 1)
Investor eligibility (if any) For qualified investors/For professional investors
Trading system applicable Match to trade, click to trade, inquire to trade, bid to trade, negotiate to trade
Risk of termination of listing
and trading (if any) and No
countermeasures
(2) The latest tracking ratings and rating changes of bonds
□ Applicable √ Not applicable
(3) Key accounting data and financial indicators of the Company for the past two years as at the end of the Reporting Period
Unit: RMB'0,000
Item End of the Reporting Period December 31, 2021 Change
Current ratio 1.09 1.08 0.93%
Debt/asset ratio 63.3% 61.2% 2.05%
Quick ratio 0.78 0.80 -3%
2022 2021 Change
Net profit before non-
-171,729 1,399,924 -112.27%
recurring gains and losses
Debt to EBITDA ratio 12.12% 20.86% -8.74%
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TCL Technology Group Corporation Annual Report 2022 (Summary)
Interest coverage ratio 0.92 4.57 -79.89%
Cash coverage ratio 4.32 8.54 -49.48%
EBITDA coverage ratio 5.17 8.39 -38.35%
Debt repayment ratio 100% 100% 0.00
Interest payment ratio 100% 100% 0.00
During the Reporting Period, the operating performance and profitability of the Company’s subsidiaries decreased year -on-year due to the cyclical
impact of the panel industry, resulting in large changes in the Company’s accounting data and financial indicators.
Part III Report of the Board
Company-related industry outlook in the reporting period
Since 2022, the international political and economic patterns have been restructured,
protectionism and geopolitics have intensified the trend of backlash against globalization, and
inflation pressures have led to tightened monetary policies in major developed economies, increasing
uncertainty in global economic development. Facing increasingly severe business environment, TCL
Tech has adhered to its strategic focus and maintained a stable operation.
During the Reporting Period, TCL Tech achieved a revenue of RMB166.55 billion, a year-on-
year increase of 1.8%; a net profit of RMB1.79 billion, a year-on-year decrease of 88.0%; and a net
profit of RMB260 million attributable to the shareholders of listed companies, and net operating cash
flow of RMB18.43 billion. The main reasons for the decline in the Company’s performance are: the
downturn in the semiconductor display industry, a significant drop of product prices. The Company
achieved a revenue of RMB65.72 billion from the semiconductor display business in 2022, a year -
on-year decrease of 25.5%, with a steady increase in shipments and the market share. The Company
firmly occupied the second largest TV panel market share in the world. The production line for oxide
semiconductor displays positioned as IT products has been put into production in Guangzhou,
supporting the accelerated growth of medium-sized product businesses. Facing the downward cycle
of the industry, TCL CSOT has increased confidence in development, actively optimized its capacity
structure, and improved its business portfolio, well prepared for future development.
New energy photovoltaics keeps sound momentum under the policy of carbon peaking and
carbon neutrality. However, industry competition was increasingly intensifying, upstream raw
material prices fluctuated, and excess earnings further concentrated in enterprises with stronger
comprehensive competitiveness. With the global industrial restructuring, China's semiconductor
industry has ushered in a golden opportunity of transformation and upgrading. TCL Zhonghuan gives
its leading advantages in product and process technologies into full play, accelerates industrial
transformation, takes a lead in the innovation and upgrading of the manufacturing industry and boosts
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TCL Technology Group Corporation Annual Report 2022 (Summary)
high-quality development of China's economy. During the reporting period, TCL Zhonghua n
achieved a revenue of RMB67.01 billion, a year-on-year increase of 63.0%, and a net profit of
RMB7.07 billion, a year-on-year increase of 59.5%.
The Company has always been committed to the manufacturing industry based on its strategy,
and has gradually built long-term strategic planning and management capabilities, operating
capabilities across cycles, and core competitiveness for global operations.
Strengthening the competitiveness based on core businesses, optimizing competitive
strategies and seeking business improvement, and promoting the healthy and sustainable
development of the industry. In the face of economic downturn and intensified industrial
competition, the Company upheld the bottom-line business thinking. During the Reporting Period,
operating cash inflow was RMB18.43 billion, and the capital structure remained stable. Facing
fluctuations in demands for semiconductor displays, the Company emphasizes industry supply-
demand balance and corporate profitability to continuously optimize competitive strategies and
improve economic efficiency. In the fields of new energy photovoltaic and semiconductors, the
Company will continue to give play to the advantages of its advanced capacity and the Industry 4.0
platform, and continue to lead the high-quality development of the industry.
Technological innovation driven by forward-looking research and development,
comprehensively promoting the digital and intelligent transformation, and committed to high-
quality corporate development. The Company focuses on technological productivity and
prospective investment. In 2022, the Company invested RMB10.78 billion in R&D, a year-on-year
increase of 22.9%. The Company filed 659 new international applications for patents under the PCT,
a total of 14,741 applications filed. The Company demonstrates world-leading technological capacity
in the fields such as semiconductor display, new energy photovoltaic and semiconductor materials.
The number of its applications for patents of technologies and material in the field of quantum dot
electroluminescence has reached 2,244, ranking second in the world. The export market share of its
G12 large-sized and highly efficient N-type silicon wafers ranked first in the world. The Company
continues to lead the photovoltaic industry in terms of the process and technology upgrading of
thinning and thin wiring. The Company has deeply integrated digitalization and advanced
manufacturing, achieved dynamic management throughout the full production process of
semiconductor displays and the entire life cycle of products. The Company takes a lead in the industry
in terms of flexible manufacturing capabilities and quality consistency of new energy photovoltaics,
and continues to promote comprehensive upgrading of industry digitization and intelligence.
Based on “dual circulation” strategy, actively exploring overseas markets, and integrating
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TCL Technology Group Corporation Annual Report 2022 (Summary)
localized operations into the global industrial chain. Facing adjustments and restructuring of the
global supply chain, the Company has strengthened its market operations in China, while actively
exploring overseas markets. From exporting products to exporting industrial capabilities, the
Company has built a global layout of industrial chains and supply chains. In the field of
semiconductor displays, the India Factory of TCL CSOT has been put into operation, and will
continue to strengthen its global strategy in the production, marketing, and research process in the
future. In the field of new energy photovoltaics, TCL Zhonghuan actively expands its global presence.
An industrial chain system is taking shape with global competitiveness through Maxeon photovoltaic
cell and module factories built in Malaysia, the Philippines, Mexico, and other places.
In a new round of technological reform and industrial upgrading, the digital economy keeps
growing around the world, the "Carbon Peaking and Carbon Neutrality" trend accelerates the new
energy transformation, the semiconductor industry continues to see an increase of localization, and
China's technology industry ushers in a golden opportunity of rapid development. Facing the
opportunities, the Company will adhere to the bottom line of business, drive development with
innovation, and actively improve the global industrial layout. TCL Tech will continue to focus on the
national strategic industry that emphasizes high technology, heavy assets, and a long cycle. With the
mission and vision of “leading technology and mutually beneficial cooperation”, TCL Tech will meet
the requirements of "improving operational quality and efficiency, enhancing strengths to shore up
weaknesses and accelerating global expansion as well as innovation-driven development” to take a
lead in the world.
Main businesses of the Company during the reporting period
Based on the semiconductor display business, new energy photovoltaic and semi-conductor
materials as the main business, the Company will continue to optimize its business structure, and
further focus on its main businesses, to achieve the strategic goal of global leadership in its two core
industries.
TCL TECH
Semi-conductor New energy photovoltaic & Semi- Industrial finance &
investment Other
display conductor materials
Zhonghuan Zhonghuan TCL
TCL CSOT China Ray TCL Capital Highly TPC
Photovoltaic Advanced Financial
M oka TCL Xinhuan/Xi
Juhua Technology M icrochip nhua
14
TCL Technology Group Corporation Annual Report 2022 (Summary)
(I) Semiconductor display business
In 2022, the global semiconductor display market experienced significant ups and downs. Due
to multiple impacts such as geopolitical conflicts and inflation, the demand from the end-users for
displays in major markets dropped significantly, product prices hit a record low, and the panel industry
suffered operating losses.
During the Reporting Period, TCL CSOT further consolidated its position in the industry,
achieved a sales area of 42.75 million square meters, an increase of 8.3% year-on-year. TCL CSOT
ranked second in the world in terms of the market share of TV panels. Affected by the decline in
prices of major display products, TCL CSOT earned a revenue of RMB65.72 billion from the
semiconductor display business, a year-on-year decrease of 25.5%, and saw a full-year loss in 2022.
In response to the challenges, TCL CSOT actively made changes, focused on extreme cost efficiency,
improved capacities of risk control and cyclic resilience, and achieved operating cash flow of
RMB14.76 billion. TCL CSOT will accelerate the adjustments to product structures, actively explore
new customers, and become a leader of comprehensive displays in full sizes.
In its large-size product business, TCL CSOT has maintained scale leadership, and has
consolidated its leading position in TV panels with a high-end product strategy, and vigorously
developed commercial displays such as interactive whiteboards, digital signs, and video walls.
Three 8.5-generation line factories t1, t2, and t10, and two 11-generation line factories t6 and t7, have
maintained efficient operations. TCL CSOT ranked second in the world in terms of the scale of the
high-generation lines, with the market share of mainstream products leading the world. TCL CSOT
ranked first in the world in terms of the scale of 55-inch and 75-inch products, and second in the
world in terms of the share of 65-inch products. TCL CSOT played its advantages in high-generation
lines and cutting-edge technology and focused on high-end panel products, ranked top in the world
in terms of sales performance of 8K/120HZ products. TCL CSOT has become a major supplier for
leading customers in the commercial markets such as interactive whiteboards, digital signs, and video
walls. TCL CSOT ranked first in the world in terms of the market share of interactive whiteboards
and third in the world in terms of the market share of video walls. Its product and customer structures
have been continuously optimized.
In its medium-size product business, TCL CSOT has accelerated the expansion of new
business such as IT and vehicle screen products while improving the distribution of production
capacity to create a new growth engine. In order to meet market demand, the Company has
optimized its capacity layout, improved its product series, and strengthened customer development,
achieving rapid growth in the high-end IT market. The Company ranked first in the world in terms of
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TCL Technology Group Corporation Annual Report 2022 (Summary)
the market share of e-sports displays, second in the world in terms of the market share of the LTPS
laptops, and first in the world in terms of the market share of the LTPS tablet PCs. In terms of on-
board products, the Company made breakthroughs in many key customers at home and abroad, and
the shipment volume and revenue scale maintained rapid growth. The 6-generation LTPS production
line is in orderly progress, and the Company’s overall LTPS capacity scale and comprehensive
competitiveness will rank top in the world. The production line t9 for new oxide semiconductor
displays positioned for businesses such as medium-sized IT and automotive, has been put into
production. Combined with the product technologies and customer resources previously accumulated
by the Company, the Company’s medium-sized product business strategy will further bring a new
growth engine.
In its small-size product business, TCL CSOT focused on differentiation technologies, such
as flexible OLED folding and LTPO, while expanding VR/AR new displays to optimize its
product and customer structures. TCL CSOT ranked third in the world in terms of the shipment
volume of LTPS mobile panels from the t3 production line. It independently developed industry-
leading 1512 PPI LCD-VR screens and actively exploited new business areas. The capacity of the
second and third phases of the t4 OLED has been in progress as scheduled, with smooth technological
iteration and new product development. Several new products, such as folding products, Camera
Under Panel, and LTPO technology, have completed SoP and delivery. The shipment of medium and
high-end products has continued to increase, and the customer structure has further diversified, laying
a foundation for business improvement.
In the industry’s downward cycle over the past seven quarters, the inefficient capacity has
continued to be eliminated, bringing opportunities for industry restructuring and integration, and
further optimizing the competitive patterns. Also, leading manufacturers in the display industry have
accelerated destocking under the goal of promoting the supply-demand balance and improving
profitability. In the fourth quarter of 2022, industry inventory entered a healthy level. At present, the
prices of major products have stably rebounded. As the demand of downstream end customers for
restocking has increased, the prices of large-sized display products have risen.
Looking into the future, the global economy remains resilient, and the Company is firmly
optimistic about the development trend and industrial value of semiconductor displays as a core
information carrier and main interactive interface in the wave of the digital economy. On the other
hand, the supply side tends to stabilize. Leading enterprises continue to strengthen their technological
advantages and economies of scale, the display industry sees further increasing concentration, the
industrial chain reaches a new balance in terms of pricing, and the return on investment in
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TCL Technology Group Corporation Annual Report 2022 (Summary)
semiconductor displays will steadily recover.
Based on efficiency and effectiveness, TCL CSOT will consolidate its high-end intelligent
manufacturing capabilities through digitalization construction, and improve its comparative
competitiveness. TCL CSOT will continue to optimize its business portfolio, adhere to the high-end
product strategy, consolidate its global leading position in large-sized product businesses, improve
the layout and capacity of medium-sized products, enhance the structure and business conditions of
small-sized product customers, and accelerate its transformation and upgrading from a leader of large-
sized displays to a leading enterprise of full-sized displays. TCL CSOT will continue to increase
investment in research and development, and work with industry chain partners to jointly build an
industrial ecosystem around new display technologies such as printed OLED, Miniled, Microled, and
Silicon-based OLED micro displays.
(II) New energy photovoltaic and semiconductor materials business
During the Reporting Period, under the background of the continuous advancement of carbon
neutrality goals and the shortage of energy caused by geopolitical conflicts, the global energy
structure continued to shift to renewable energy, and the photovoltaic industry maintained rapid
development. In response to the price fluctuation of materials on the upstream of the supply chain,
the Company improved its industrial layout, built operational barriers with its technical strength, and
grasped the initiative in the process of rapid changes of the industry. The new energy photovoltaic
business of the Company has comprehensively moved towards global leadership. During the
reporting period, TCL Zhonghuan maintained a high growth rate of performance, achieved a revenue
of RMB67.01 billion, a year-on-year increase of 63.0%, and a net profit of RMB7.07 billion, a year-
on-year increase of 59.5%.
Releasing advanced capacity of photovoltaic materials, optimizing the product structure ,
and achieving a rapid growth in production and sale scales. During the Reporting Period, the
Company’s G12 advanced capacity continued to expand, and the capacity of the Phase VI 50GW
(G12) monocrystalline silicon materials in Ningxia increased capacity; the smart factory for slicing
monocrystalline silicon wafers in Tianjin (25GW) and the smart factory for slicing monocrystalline
silicon wafers in Yixing (30GW) were put into operation, comprehensively improving the advantages
of economies of scale. As at the end of the Reporting Period, the Company’s total capacity for
monocrystalline silicon increased to 140 GW, among which, the G12 advanced capacity accounted
for over 90%. During the Reporting Period, the Company ranked first in the world in terms of the
sales market share of photovoltaic silicon wafers, first in the world in terms of the market share of
G12, first in the world in terms of the sales market share of N-type silicon wafers. The production
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TCL Technology Group Corporation Annual Report 2022 (Summary)
and sales scales remained leading in the industry.
Taking a lead in products such as large-sized, thinned, and N-type silicon wafers, as well as
the development of photovoltaic materials and technologies based on R&D and process capacity.
With high-power components keeping growing on the downstream and the rapid increase in the
penetration rate of large-sized silicon wafers, the Company, as the industry leader in large-sized and
thinned wafers, continued to expand its G12 product advantages, led the industry in terms of monthly
production per furnace and the number of unit wafers produced per kilogram, and effectively
promoted cost reduction and efficiency increase in the industrial chain. With the technological
evolution of downstream cells, N-type products have entered an accelerated SoP period, and the
Company has built deep technological barriers in the field of N-type silicon materials. The Company
consolidated its leading position in the industry for many years in terms of N-type silicon wafers sales
in the global market, and excessive returns are expected from future technological changes.
Relying on the “G12 + Laminated Tile” dual technology platform and the leading Industry
4.0 System, transforming manufacturing modes in the photovoltaic industry, and jointly
building an intellectual property ecosystem with partners. Based on the dual technology platform
of "G12 Silicon Wafers + Laminated Tile Module", the Company's laminated tile module products
have significant performance advantages with a rapid growth in scale. The Company continues to
deepen the application of Industry 4.0 in all the industrial links, and implement automation and
intelligent management throughout the process, with labor productivity far exceeding the industry
average. The Industry 4.0 significantly improves the product quality and consistency, and
continuously enhances flexible manufacturing capabilities. The comprehensive introduction of the
Industry 4.0 System will provide the Company with comparative competitiveness in terms of
localized manufacturing worldwide. The Company will work with partners such as MAXEON to
jointly build an intellectual property ecosystem, and collaborate on innovation and expand
differentiation competitiveness, to lay a solid foundation for the global strategic layout of the
photovoltaic industry.
The transformation of the global energy structure injects long-term development vitality into the
photovoltaic industry, and the continuously improved economic efficiency of photovoltaic power
generation further stimulates market demand. The global installed photovoltaic capacity is expected
to exceed the expected capacity. Looking into the future, TCL Zhonghuan will continue to promote
technological changes related to photovoltaic materials such as large-sized, thinned, and N-type
silicon wafers, create an ecosystem of cell and module industries with differentiation strategies,
deepen the application of the Industry 4.0 System and flexible manufacturing, strengthen its core
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TCL Technology Group Corporation Annual Report 2022 (Summary)
competitive advantages globally, and consolidate its leading position in the new energy photovoltaic
industry.
TCL Tech will continue to focus on semiconductor display, new energy photovoltaic, and
semiconductor material businesses to achieve the strategic goal of global leadership.
TCL Technology Group Corporation
March 30, 2023
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