South Korean equipment makers benefit as Chinese companies like BOE and TCL CSOT target OLED

OLED deposition equipment provider Sunic System recently achieved significant success by supplying its equipment to several Chinese panel manufacturers. Other South Korean companies, such as HB Technology, Hanwha Momentum, and Rorze Systems, have also secured equipment orders from BOE for its 8.6G IT OLED production line (B16), further validating their technical competitiveness.

According to reports from Ddaily and ET News, the display industry noted that Sunic System benefited from supplying OLED deposition equipment to Chinese display manufacturers. In the second quarter of 2024, Sunic System reported revenue of KRW42.6 billion (approx. US$32.15 million), marking an impressive year-on-year growth of 743.4%. The company also turned a profit, achieving an operating profit of KRW7.4 billion.

In the past, Sunic System's growth has been primarily centered around orders from LG Display (LGD). However, the company has recently expanded its partnerships with Chinese companies.

As the market for IT OLED expands, Samsung Display (SDC) and BOE have begun constructing 8.6G lines. However, with LGD having not yet made further investments, Sunic System is focusing on expanding in the Chinese market to sustain its growth.

In June 2023, Sunic System supplied China's SeeYA with Micro OLED deposition equipment worth KRW32.1 billion. In February 2024, it provided similar Micro OLED deposition equipment to Lakeside Optoelectronics, and in June 2024, it supplied 6G OLED deposition equipment to TCL CSOT and signed a contract with BOE to supply deposition equipment for the 8.6G OLED mass production line.

Under these circumstances, industry attention is now on Sunic System's future supply scale. The first phase of the agreement with BOE involved equipment for a monthly production capacity of 16,000 units.

Since BOE plans to expand its capacity to 32,000 units per month by 2029, additional deposition equipment will be required. If the current equipment supplied by Sunic System meets technical expectations, BOE will likely place additional orders.

Besides Sunic System, BOE also selected ICD, LG Electronics, AP Systems, Hansong Neotech, Device ENG, TSE, and others as suppliers in June 2024. In August 2024, BOE also chose suppliers like HB Technology, Hanwha Momentum, and Rorze Systems to supply products such as mask AOI equipment, infrared ovens for thin-film encapsulation (TFE), and 8th-gen glass substrate cutting equipment.

Moreover, BOE is currently holding tenders for three types of heat treatment equipment: high-temperature diffusion furnaces, PI curing equipment, and low-temperature flatbed ovens. Wonik IPS, Viatron, and the Japanese company Koyo are competing for these contracts, with reports suggesting a high likelihood that Wonik IPS will secure the order. Analyses believe that South Korean equipment manufacturers, with their leading OLED technologies, are favored by Chinese panel makers, and the possibility of additional future orders is high.