Although still leading in OLED panel production globally, South Korea now faces a fierce challenge from China's rapidly advancing display panel industry and this shift has sent shockwaves through South Korea's tech sector, prompting urgent calls from Korean experts for government support and increased investment to maintain its competitive edge.
The changing face of the display industry
The recent Society for Information Display (SID) Display Week 2024 in San Jose, California, has displayed China's growing influence in the field with Chinese companies showcasing their latest cutting-edge technologies at a total of 46 booths, according to a report by Korea-based news outlet JoongAng.
BOE, a leading Chinese display panel manufacturer, unveiled over 50 new products, including what the company claimed to be the world's brightest microLED and the first 110-inch 16K glasses-free 3D display panel. The show's events were also overwhelmingly filled with Chinese speakers, institutions, and enterprises.
For over a decade, South Korean giants LG Display (LGD) and Samsung Display (SDC) reigned in the global display panel market. However, since 2021, China has overtaken South Korea as the world's leading display panel producer although still mainly focusing on the LCD panel sector. After conquering the LCD market, Chinese manufacturers have set their sights on OLED technology, long considered South Korea's stronghold.
The rapid rise in Chinese OLED production
Market research firm Omdia's latest figures show that SDC's market share in foldable OLED panels has plummeted from 90% in 2021 to just 47% in the first half of 2024. Chinese companies, including BOE and TCL CSOT, together have seized the remaining 53%.
The first quarter of 2024 saw a surge in foldable phone releases from Chinese manufacturers such as Huawei and Oppo, catapulting BOE's market share in foldable OLED panels to 54.3%, while SDC's share dropped to 28.9%. In the small-sized OLED market for smartwatches, Chinese manufacturers are expected to have captured 64% of the market in the first half of 2024, far outpacing the combined 25% share held by LGD and SDC.
Moreover, Chinese companies have begun to make inroads into the large-sized OLED market, traditionally dominated by South Korean firms. In 2023, South Korea's market share in this segment fell from 100% to 96%, with Chinese manufacturers claiming the remaining 4% in their first year of entry.
The strategic importance of display panel technology
The display panel industry has traditionally been dominated by a few key players due to the massive investments required in equipment and technology. Just as South Korea once overtook Japan as the industry leader, there are now concerns that China may soon claim the global display panel crown.
Projections indicate that by 2027, China will produce 78% of the world's LCD panels and 46% of the OLED panels. The high concentration raises concerns about the global ICT industry's overly dependence on Chinese suppliers.
To maintain competitiveness, South Korean industry experts are calling for government support to help small- and medium-sized enterprises transition from LCD to OLED technologies. The National Academy of Engineering of Korea (NAEK) has identified OLEDoS and microLED as core next-generation display technologies crucial for South Korea's future development. Major players like SDC, LGD, and SK Hynix have already begun investing in these areas.
As South Korea fights to maintain its leadership in OLED technology, industry insiders stress the need for bold investments, government action, regulatory easing, and tax incentives.
