Dear Secretary Austin,
The recent letter sent to you by John Moolenaar, Chairman House Select Committee on the CCP draws your attention to the issue that displays for the DOD won’t be available should a conflict breakout between the US and China. Unfortunately, the well-meaning request comes from a display neofite, and perhaps arrogant congressman, who has misread the situation and offered an unrealistic solution. More than 70% of the world’s displays are provided by China and their market share will rise in the next few years, but sanctioning BOE and Tianma won’t help:
- The DOD has very little buying power, with less than 1% share of the entire market. The DOD buys around 1 million displays per year (around $100 million) to maintain readiness.
- The display industry revenue in 2023 was about $130 billion and will grow to $170 billion by 2030.
- DOD needs the Chinese more than the Chinese need DOD
- The effect of sanctions on China’s high tech industry has been demonstrated by Huawei’s recovery and the comeback of the Chinese semiconductor industry, now only two generations behind the leaders
- By calling out BOE and Tianma the Congressman missed 50% of China’s panel capacity.
- China has a near monopoly on LCD panels with Taiwan being the only other regional source and their two primary producers have been operating in the red for the last 2 years, have no expansion capital and are subject to the whims of a Chinese display autocracy, meaning that prices are set in the middle kingdom.
- Korea is a viable option for OLEDS, but China’s capacity is growing and will soon be the leading provider
A recent proposal to senior DOD officials by retired flag officers showed that DOD’s demand could be supplied by a new US factory with only a Generation 5 fab and a capacity of 15,000 substrates per month. State of the art in display manufacturing is Gen 10.5 fabs, and underutilized lower generation equipment is available at a discount. It was estimated that such an endeavor would cost less than $500 million and several unused facilities could be converted to house the fab. Why not get Moolenaar to sponsor applying a small part of the $50 billion Chip Act funding to energize a US display industry.
Over the last 5 years, OLED displays have been replacing LCDs, and they are faster, larger, thinner, foldable, rollable, and are being used in almost every combat environment with new imaging used in flying planes and drones, night vision, combat information, mapping and targeting. This is time to prepare for future display technology that may not be available if we wait too long.
Sincerely,
Barry Young, CEO
OLED Association
Barry Young has been a notable presence in the display world since 1997, when he helped grow DisplaySearch, a research firm that quickly became the go-to source for display market information. As one of the most influential analysts in the flat-panel display industry, Barry continued his impact after the NPD Group acquired DisplaySearch in 2005. He is the managing director of the OLED Association (OLED-A), an industry organization that aims to promote, market, and accelerate the development of OLED technology and products.
