In the past, Samsung Display (SDC) elected to focus on small and medium-sized panels to differentiate from LG Display (LGD), which produces large-size panels, and SDC was able to achieve success. However, the two companies' paths are now starting to "converge" in the OLED market. Nevertheless, their common "enemy" remains the Chinese manufacturers, as China is rapidly catching up with South Korea in the global OLED panel market.
Although Chinese manufacturers have gradually narrowed the gap with South Korea in the OLED market in recent years, their approach has also come with many "weaknesses." For example, the product lines of Chinese manufacturers are mostly focused on mid to low-end products; their technological levels are relatively low; and investments may be delayed. Industry experts pointed out that South Korean panel companies must capitalize on these "weaknesses" to further widen the gap with Chinese manufacturers.
According to a report by South Korea's Money Today, China, which has dominated the global LCD market with its "low-price approach," has rapidly penetrated the OLED market in recent years. The trend of OLED panel adoption in various IT devices such as smartphones, notebooks, and tablets is increasing by the day.
Source: KDIA, Omdia, compiled by DIGITIMES, April 2024
According to data from the Korea Display Industry Association (KDIA) in 2018, South Korea and China's OLED market share (based on AMOLED sales values) were 95.9% and 3.2%, respectively, with a gap of over 90%. However, as of the first half of 2023, South Korea and China's market share was 73.8% and 25.6% respectively, showing that the gap has decreased to within 50%.
Furthermore, as China continues to increase its OLED panel production capacity, the gap in production capacity between South Korea and China is also narrowing. However, some weaknesses of Chinese OLEDs have not been revealed by these surface-level "statistics."
Chinese product lines mainly focus on mid to low-end products like rigid OLEDs, while South Korean panel companies mostly focus on providing high-value-added products such as flexible OLEDs and IT OLEDs used in notebooks and tablets. High-priced flexible OLEDs offer better profits than rigid OLEDs, but Chinese manufacturers are at a disadvantage compared to South Korean companies in this sector due to technological limitations.
As a result, we've seen examples like SDC and LGD being chosen to provide all OLED panels for Apple's new iPad Pro, precisely because they have a higher technological capability than Chinese manufacturers like BOE. Related sources have stated that South Korea's high technical capability in OLED technologies is not something Chinese manufacturers can easily replicate.
When SDC President Choi Joo-sun was recently appointed as the new head of KDIA, he emphasized that all participants in the ecosystem, including the industry, academia, and government, must have more flexible cooperation to jointly develop key next-gen technologies such as foldable/rollable displays, OLEDoS, LEDoS, and transparent displays, which may determine the success or failure of the industry in the future.
Therefore, the South Korean industry believes South Korean panel manufacturers should widen their technological gap with Chinese manufacturers through bold investments, enhanced R&D, and securing key talent. However, the industry also pointed out that these methods require support from the South Korean government. Compared to the strong support from the Chinese government, the South Korean government still lacks an active budget and tax support for OLEDs.
