Undoubtedly, 2019 was Royole's highlight moment. The following year, Royole's IPO announcement failed, and its capital chain began to tighten. In 2021, rumors of unpaid wages surfaced. Since then, Royole has plummeted at the speed of light towards bankruptcy.

Royole, which has been setting records since its inception, developed ultra-thin and flexible screens that can be repeatedly folded like paper in 2014.

Royole soon established the world's first large-scale production line for fully flexible displays, surpassing Samsung and being recognized as a leader in China's display panel industry and the global flexible technology sector. Its valuation once exceeded 50 billion yuan, and its founder, Liu Zihong, even made it onto the Forbes billionaire list.

However, despite being a highly regarded hard-core technology company that had successfully mass-produced flexible foldable screens and raised billions in funding, Royole surprisingly filed for bankruptcy.

It's quite bizarre that a company valued at 50 billion yuan would encounter difficulties without the intervention of investment institutions and government departments. However, since the exposure of unpaid wages in 2021, Royole has not received any substantial assistance.

How did Royole gradually slide into bankruptcy, and why did it find itself in such a helpless situation?

A Decade of Failure

When discussing Royole, its founder Liu Zihong cannot be overlooked.

Liu Zihong hails from Fuzhou, Jiangxi Province. At the age of 17, he entered Tsinghua University as the top scorer in science in Fuzhou and majored in electronic engineering. After graduation, he continued his studies at Tsinghua University for his master's degree and later obtained his Ph.D. from Stanford University.

In 2009, Liu Zihong graduated from Stanford and joined IBM's New York headquarters. Dissatisfied with his job, Liu Zihong always wanted to start his own business and was constantly on the lookout for entrepreneurial opportunities and funding.

In 2012, Liu Zihong co-founded Royole with several alumni from Stanford University and Tsinghua University, focusing on the development of flexible screens. Speaking about his decision to enter the flexible screen market, Liu Zihong stated, "This opportunity arose from a discovery: while users enjoy the visual impact of large screens, they have to contend with their lack of portability. Royole aims to address this pain point."

Royole embarked on the flexible screen journey with little prior knowledge or experience. At the time, both academia and industry paid limited attention to flexible screens, and many issues remained unresolved in the upstream and downstream supply chain, from raw materials to processes and designs.

Despite this, Royole managed to produce prototypes within just two years of its establishment. In 2014, Royole unveiled the industry's thinnest flexible display and sensor, measuring just 0.01mm thick with a rolling radius of only 1mm. In a live demonstration, the flexible screen smoothly swayed with just a flick of the wrist, causing a sensation due to its remarkable advancement.

It's worth noting that at the time, LG had just showcased an 18-inch flexible screen with a rolling radius of 3cm. In 2013, BOE's flexible screen had a rolling radius of 2cm. Royole's 0.01mm flexible screen with a rolling radius that was "far ahead" of Samsung, LG, and BOE was truly groundbreaking.

Liu Zihong named Royole's pioneering technology "Ultra-Low Temperature Non-Silicon Process Integration Technology." Prior to Royole's introduction of this technology, the industry primarily relied on traditional silicon-based materials technology from Korean companies like Samsung and LG, or zinc oxide-based technology from Japanese companies like Sharp, primarily used in LCD screens. Although there were different schools of thought, the industry generally defaulted to the Korean approach.

However, Korean companies' processes were constrained by silicon-based materials, resulting in higher defect rates in their flexible screens. Recognizing this limitation, Liu Zihong revisited and improved upon Sharp's technology. Although it may seem like "old wine in a new bottle," Royole nevertheless carved out a new niche by adapting this technology for driving OLED panels rather than LCD panels.

Upon its introduction, Royole's technology gained widespread recognition. The startup, which had been established for just over two years, suddenly emerged as a shining star and was viewed as a formidable challenger to established players like Samsung and LG.

Soon after, investors like IDG and Shenzhen Capital Group approached Royole. The following year, Royole completed its Series C funding round, raising 1.1 billion yuan. Rumors even circulated about a potential acquisition of Royole for US$300 million. Suddenly, Royole became a hot commodity in the investment world.

Following the release of Royole's 0.01mm full-color flexible screen, many manufacturers approached the company hoping to collaborate. However, Royole rejected all partnership offers for various reasons.

Without external partnerships, Royole's products struggled to enter the market. Faced with this situation, Liu Zihong made the decision to build their own production line. After announcing this plan, Royole secured an additional 1.7 billion yuan in funding, including investments from state-owned enterprises.

In July 2015, Royole officially launched the world's first mass production line for ultra-thin flexible display modules and sensors. Five months later, in October, Royole initiated construction of a 5.5-generation production base. Rumors circulated that Royole had invested over 11 billion yuan in building its own production line, compared to BOE's investment of over 22 billion yuan in building a 5.5-generation production line in Erdos. With half the investment, Royole achieved what would have cost other players billions. Liu Zihong boldly stated, "In the future, Royole will be the industry leader, leaving BOE and CSOT in the dust."

Just over five months after commencing production, Royole unveiled the world's first foldable flexible screen smartphone, the FlexPai, priced starting at 8,999 yuan.

When Royole's smartphone hit the market, Samsung's Galaxy Fold was still grappling with testing issues, and Huawei's Mate X was still in the concept stage. At the 2019 Mobile World Congress in Barcelona, while Samsung and Huawei's foldable phones were merely on display, Royole's FlexPai was available for hands-on experience, stealing the show. For a time, Royole was hailed as the "pioneer of foldable screens."

During that year's Spring Festival Gala broadcast from Shenzhen, Royole's logo appeared on the terminal building of Shenzhen Bao'an Airport and on bottles of Luzhou Laojiao liquor. It seemed that Royole was growing ever larger and steadily climbing to new heights.

Looking back, 2019 was undoubtedly Royole's high point. The following year, Royole's IPO failed, and its capital chain began to tighten. In 2021, rumors of unpaid wages surfaced. Since then, Royole has plummeted at breakneck speed towards bankruptcy.

Lack of Commercialization

Today, it is clear that Royole made significant technological breakthroughs. However, despite investing heavily in technology, the company ultimately stumbled at the commercialization hurdle.

Globally, display panel companies typically generate revenue by selling screens to partners, with few players venturing into building their own production lines solely for end products. Even industry giant Samsung sells its screens to partners for profit.

Royole charted an uncharted course, investing in research and development while simultaneously building its own production lines and selling products. This approach required significant financial commitments.

Although Royole introduced the world's first foldable smartphone, reviews indicated that its flexible screen was plastic-sealed, exhibiting a plastic-like appearance even in reflective environments. When folded, the hinge did not close completely, giving the phone a thick appearance. Interestingly, the phone prompted users to unfold the screen or refrain from using it while charging and to avoid using the foldable screen in cold temperatures.

In contrast, modern foldable smartphones do not have these limitations. At the time, Royole's foldable smartphone seemed more like a rushed half-finished product, resulting in dismal sales of just over 200 units in 11 months on Tmall.

Behind the poor sales were not only immature technology and high prices but also concerning product yields. Royole's IPO prospectus estimated a product yield of only 36% in 2019. This low yield led to high return and repair rates, hindering the success of Royole's foldable smartphone in the market.

Furthermore, Royole had the opportunity to extend its flexible screen technology to smartphone brands such as Huawei, Xiaomi, OPPO, and vivo but ultimately failed to reach agreements due to high pricing. In hindsight, we smartphone users are fortunate that these deals did not materialize.

The inability to sell foldable smartphones and commercialize its technology marked the end of Royole's dual strategy of technological research and development alongside end-product manufacturing. Unable to achieve a closed commercialization loop and facing obstacles in its IPO, Royole quickly spiraled towards bankruptcy.

Beyond Redemption

From the tightening of its capital chain in late 2020 to its bankruptcy filing several years later, Royole found itself in an "irredeemable" state.

Firstly, Royole and its founder Liu Zihong left an "indelible" impression on outsiders. After Royole's IPO failure, the Shenzhen Municipal Government hired professional agencies to inspect the company's situation and discuss its future. Reports indicated that potential investors had extended Olive branch (an idiomatic expression meaning to extend an olive branch or offer of friendship/cooperation), but Liu Zihong declined. Rumors also circulated that Royole's subsequent fundraising failures were related to Liu Zihong's reluctance to dilute his shareholdings.

Moreover, in November 2021, Royole secured a large order worth 600 million yuan for self-developed OLED flexible display modules. However, instead of using the advance payment to commence production, Liu Zihong used the funds to repay debts. Such behavior naturally discouraged potential partners from collaborating with Royole.

Apart from the people, team, and company itself, another crucial factor contributing to Royole's downfall was the loss of competitiveness of its flexible screen technology in the rapidly evolving display panel industry. Many may only recall Royole's initial dazzling debut, unaware that the company subsequently relied heavily on a single trick to survive.

By May 2024, JieMian News reported that struggling to raise funds, Royole faced mounting external debts and unpaid wages. Bankruptcy reorganization became a common demand among employees and investors. While Liu Zihong initially opposed reorganization in April, Royole voluntarily filed for bankruptcy liquidation in June.

On September 13, the Shenzhen Intermediate People's Court held Royole's first creditors' meeting, confirming unpaid wages totaling 35 million yuan. Liu Zihong himself was spotted in the audience at the 2024 US Open tennis tournament. With the company deeply in debt, the founder's leisurely trip to the US to watch tennis games highlights Royole's seemingly hopeless and unsalvageable situation.