By Kim Bo-eun
Korea’s display makers currently lead the global market in organic light-emitting diodes (OLED) displays, but they have been growing increasingly alarmed by how fast Chinese rivals have caught up in terms of technology.
They worry that they may lose their competitive edge in OLED technology, which is what happened with liquid crystal displays (LCD), where Chinese players now account for close to 60 percent of the global market share. Korean display makers are eyeing the timing of exiting the LCD market, given their profitability has deteriorated due to Chinese players that offer the panels at lower prices.
OLEDs are considered as the next-generation display, because the panels are thinner, lighter and show improved picture quality compared to LCDs.
Market researchers forecast that Chinese players will quickly expand their share of the market for small-and medium-sized OLEDs used in smartphones.
According to Omdia, Chinese companies are expected to account for 27 percent of the global market for smartphone OLED panels next year, up from 15 percent this year. Samsung Display, the market leader in small- and medium-sized OLEDs, is subsequently set to see its market share fall to 65 percent next year from 77 percent this year.
The figures are projections based on forecasted panel shipments according to investments into production facilities and market conditions.
Chinese companies caught up with Korean LCD manufacturers in a matter of years after a decade of Korea’s dominance from the mid-2000s to 2016, backed by substantial financial support from Beijing.
The Chinese government is now backing the development of OLED displays, which has Korean players on their toes, given it could be only a matter of years before Chinese rivals end up dominating the market.
Chinese companies are moving quickly to set up large-scale production bases to churn out OLEDs. BOE is constructing a production plant for smaller OLEDs in the southwestern Chinese city of Chongqing. The OLED production line is set to be the largest for a single factory in China, producing 115 million panels on an annual basis.
Chinese players have not yet started production of large-size OLED panels, but they have entered mass production of smaller panels and are supplying them to major companies.
“The technological gap between Korean and Chinese companies’ small-size OLED displays has narrowed significantly,” an industry official said.
“For large-size OLED displays for TVs, we estimate that Chinese players are three to four years behind in technology, but they could catch up in a year or an even shorter time span.”
Chinese firms are scouting key personnel at Korean display makers by offering significantly greater compensation to secure technology, a practice that has been going on for years.
Meanwhile, Chinese players are known to receive up to 70 percent in financial support from the central as well as local governments when setting up production facilities.
Local display manufacturers are calling for OLED technology to be included among the country’s strategic technology sectors that receive support in R&D and facility investments. The government is currently seeking to include semiconductors, EV batteries and vaccines in these sectors receiving state support.