What Display Daily thinks: Juxtaposing two of The Elec’s stories on the Korean display industry is an interesting exercise here. There’s just one note of concern: the mention of the word metaverse. It’s a catch-all term that is meant to paint a picture of a future cyberspace world that will co-exist with ours, mostly because we will have AR and VR displays to augment our usual real world view. That seems to be the gist of it.
Unfortunately, it is also a lazy word that sounds expansive, but has little practical meaning when you apply it to the display industry. There are many reasons to assume that digital displays will be permeating our existence in far greater numbers than today. You could talk about ePosters, digital signage, multi-monitor expansion for laptops and desktops, a resurgent smartphone market, the TV as a home hub, art and culture, in-car displays, and so many other options.
So, LG Display should be optimistic, that’s its prerogative, but it shouldn’t be because of the metaverse. That implies uncertainty, and some concern about predictions of future growth and consumer demand. Put that next to the same publications report on three display manufacturing equipment suppliers, supplying Samsung and LG almost exclusively, and you can become a little pessimistic.
No one knows anything right now. That’s what is certain. The focus on short-term performance after a pandemic that threw everyone for a loop, the impact of trade confrontations between China and the US, and the general slump in consumer demand driven by inflation and economic uncertainty, are all concerning and unpredictable vanes for companies making plans for the future.
The Metaverse of Optimism at LG Display
The K-Display event aims to showcase the latest advancements in the display sector for the benefit of its Korean audience and international visitors. Over 180 companies, including 25 foreign firms, are participating, making it the largest presence in its history. International organizations like the Japan Semiconductor Equipment Manufacturers Association and the U.S. International Display Measurement Committee have also made their presence known.
The Elec reported on Jung Ho-young, the CEO of LG Display, presenting at the conference. Ho-young expressed optimism about the company’s performance in the second half of the year, suggesting that it will gradually improve. He hinted at an upcoming announcement about investments in 8th generation OLED technology for IT products.
Jung highlighted three key drivers for LG Display’s growth: the acceleration of OLED adoption, enhanced synergy with mobility solutions, and the creation of new markets linked to the metaverse. He acknowledged the difficulties faced by the display industry due to macroeconomic challenges and shifts in consumer demand. Despite this, he emphasized that OLED adoption is accelerating in various sectors like smartphones, tablets, laptops, and gaming monitors, leading to new opportunities.
Jung predicted that OLED’s penetration in IT products will grow significantly, possibly increasing by up to five times its current rate within five years. Regarding mobility, Jung stated that displays in vehicles are expanding to offer diverse interactions for drivers and passengers, indicating the importance of displays in the growing electric and autonomous vehicle industries.
He also mentioned the importance of displays in the metaverse concept, highlighting transparent and extended reality (XR) displays as essential components for connecting virtual worlds. Jung stressed the need for innovation to provide consumers with meaningful experiences and the importance of collaboration and open innovation across the industry ecosystem. He expressed optimism about the South Korean government’s recognition of the display industry’s significance and its active policy support.
Three Display Manufacturing Equipment Makers Show Diverging Paths
The Elec also looked at three companies provide tensioning equipment crucial for OLED panel production and tightly aligned with Samsung Display and LG Display. the three major domestic tensioning machine companies, HIMS, KPS, and Hansong Neotech, have been experiencing mixed fortunes.
HIMS is anticipating a recovery through equipment supply contracts and increased OLED equipment sales. KPS has achieved improved financial results by acquiring Segiritech, a waste battery recycling company, although their OLED equipment business has been less successful. However, Hansong Neotech is facing heavy operating losses, has rejected audit requests from Korean securities authorities, and is facing the risk of being delisted.
Tensioning equipment doesn’t travel well, neither does any of the intricate precision equipment needed for modern-day organic displays, so having successful nearshore operations is essential to Samsung and LG. However, this data also suggests that these suppliers are feeling the squeeze.
| In trillions of won | 2021 Sales | 2021 Profit | 2022 Sales | 2022 Profit | 1H23 Sales | 1H23 Profit |
|---|---|---|---|---|---|---|
| HIMS | 506 | -44 | 315 | -133 | 242 | 12 |
| KPS | 43 | -123 | 146 | -86 | 368 | -4 |
| Hansong Neotech | 193 | 4 | 296 | -4 | 277 | -112 |
| In millions of dollars | 2021 Sales | 2021 Profit | 2022 Sales | 2022 Profit | 1H23 Sales | 1H23 Profit |
| HIMS | $380 | -$33 | $236 | -$100 | $182 | $9 |
| KPS | $32 | -$92 | $110 | -$65 | $276 | -$3 |
| Hansong Neotech | $145 | $3 | $222 | -$3 | $208 | -$84 |
However, this news also means that not much has changed for these companies since 2021 in terms of the uncertainty surrounding display manufacturing orders. Back then, HIMS’ CEO, JH Kim, expressed concerns about uncertain demand for display equipment and was looking to securing more orders from Chinese companies. Also back then, KPS and Hansong Neotech looked pretty competitive. Now, one is expanding into batteries, and the other is looking at dire financial problems. HIMS still relies mostly on Samsung Display, and Chinese manufacturing orders haven’t materialized to the extent that was hoped for.
