Recently, growth in the TV market has slowed down.
However, mid-to-small-sized OLED applications have gradually expanded into emerging markets such as extended reality (XR) devices and automotive displays. It has been reported that Samsung Display (SDC) will transfer some of its large-sized OLED R&D personnel to the small and medium-sized OLED department. Besides improving the financial situation of the large-sized division, the move also hopes to widen the gap with Chinese competitors by leveraging strong R&D capabilities.
According to reports from Korea Economic Daily and Kipost, Industry sources pointed out that SDC will soon transfer about 30% of the large-sized OLED department's R&D personnel, around 500 people, to the mid-to-small-sized department. The move aims to increase the large-sized department's profitability, which is currently facing losses, by reducing labor costs.
Sources stated that with growth in the TV market slowing down, demand for large-sized OLED products has also stagnated. Meanwhile, demand for mid-to-small-sized products has expanded into areas such as XR devices and automotive displays.
In particular, following the successful implementation of OLEDs in the iPhone, Apple is expected to gradually expand the adoption of OLED in products such as the iPad, Vision Pro, and MacBook. This anticipated growth momentum is significant, with the mid-to-small-sized OLED market scale expected to grow from US$2.5 billion in 2024 to US$8.9 billion in 2029.
This is why Chinese companies such as BOE and Visionox have also heavily invested in developing mid-to-small-sized OLEDs. The technological gap between Chinese and South Korean OLEDs has narrowed to 1-1.5 years, putting competitive pressure on SDC.
According to data from Omdia, in 2023, SDC's market share for mid-to-small-sized OLED panels dropped to 43%, down 13% from 56% in 2022. As for LG Display (LGD), it also saw a slight decrease from 11% to 10%. In contrast, Chinese companies such as BOE (15%), Visionox (9%), and Tianma (8%) have all shown an upward trend.
Therefore, SDC's personnel adjustments will help strengthen its R&D capabilities in mid-to-small-sized OLED panels. SDC had previously announced an investment of KRW4.1 trillion (approx. US$3.02 billion) to establish an 8.6th-gen production line for mid-to-small-sized OLEDs by 2026. This new investment has also led to increased personnel demand.
Industry sources stated that SDC sees the technological gap as a defense strategy against pursuing Chinese competition, which is why SDC is expanding its mid-to-small-sized OLED R&D personnel as a proactive measure. Through this personnel adjustment, SDC aims to enhance its R&D capabilities while expanding production capacity.
It's reported that LGD is also evaluating whether to invest in 8.6th-generation OLED panels to enhance its mid-to-small-sized business. LGD raised KRW1.3 trillion through a paid capital increase in March 2024, with KRW416 billion expected to be invested in the mid-to-small-sized business. The KRW1.5 trillion expected to be made from the sale of its LCD factory in Guangzhou, China will also contribute to this investment.
