What Display Daily thinks: The ITIF’s report is in a long line of reprots that ask the question, how innovative is China in AI, electric vehicles, and here, in displays. And the US’s policy to contain China’s industries seems to be acknowledging the issue of the country’s dominance in displays, which is a good thing, but the policy options are very limited, if at all effective.
One typical anti-Chinese sentiment, not by ITIF, asks the question, what happens to the world’s semiconductor supply chains if China attacks Taiwan. Well, I guess you can say, what happens to the world’s ability to use its computers or watch its televisions if China cuts off its supply of displays. Just as ludicrous, but realistically, the country’s control over the display industry should be of great concern, particularly as its government support that is not even available to South Korea’s display industry, and is non-existent in the US and Europe.
Whatever the future of MicroLED, it is a semiconductor business and the US should buttress US companies, as should the European Union. But it may be too late for that now, too. Collaboration with South Korea and Japan sounds like a good idea, but what is the US’ bargaining chip here, what is the US display industry? I have yet to find a clear definition of either. a US or European display industry that would lend itself easily to a policy approach that gets the US back into the global display industry.
China’s Ascent in the Display Industry
The Information Technology and Innovation Foundation (ITIF) is a nonpartisan research and educational institute that focuses on formulating and promoting policies aimed at accelerating technological innovation, boosting productivity, and supporting growth in the technology sector. often publishes research on topics such as innovation, technology policy, and global competitiveness.. This month, it has published a report called, How Innovative Is China in the Display Industry?
According to the report, China’s display industry has seen explosive growth over the past two decades, becoming a global leader in liquid crystal display (LCD) and organic light-emitting diode (OLED) production. Chinese firms, such as BOE and TCL, have expanded their influence through significant government support, investments, and intellectual property acquisition. Chinese companies now account for over 72% of global LCD production and more than 50% of OLED production, marking a major shift in the global market, previously dominated by South Korean firms.
This growth has been largely fueled by extensive government subsidies, intellectual property acquisition through legal and illegal means, and significant capital expenditures (CapEx). From 2020 to 2027, China is projected to contribute 85% of the world’s capital investments in display technology, with Chinese firms accounting for over 90% of CapEx in this sector by 2027.
Chinese display manufacturers have increasingly focused on product and process innovation. Firms such as BOE have developed cutting-edge technologies like flexible OLED screens and MiniLED displays. While South Korean firms still hold a technological lead in some areas, Chinese firms are rapidly closing the gap, especially in manufacturing efficiency and scale. BOE and TCL are increasingly being recognized for their innovations, winning awards at global technology showcases like the Consumer Electronics Show (CES).
One significant advancement has been BOE’s development of flexible OLED technology and its large-scale production capabilities, which have allowed Chinese companies to capture a growing share of the display market. For example, BOE is now a supplier of OLED panels for Apple’s iPhones, and Chinese companies are also increasing their share of the automotive display market, capturing 45% of global shipments by 2023.
China’s success in the display industry is underpinned by aggressive government policies designed to foster industrial dominance. Chinese firms receive extensive subsidies from both the central and provincial governments, which include direct financial support, tax breaks, discounted land, and access to cheap capital. Between 2010 and 2021, BOE alone received $3.9 billion in subsidies. These subsidies have enabled Chinese firms to outcompete foreign rivals by driving down prices and increasing production capacity.
The Chinese government’s “Made in China 2025” initiative has explicitly targeted the display industry as a strategic sector, with goals to produce advanced display technologies such as 8K and 4K printed AMOLED displays by 2025. Local governments, like those in Chengdu and Wuhan, have also played a critical role in supporting the growth of China’s display manufacturing capabilities by providing regional subsidies and infrastructure support.
China’s rapid rise in display manufacturing has had a profound impact on global competition. Japanese firms have been driven out of the LCD market, and South Korean firms, while still competitive, are increasingly losing market share. The overcapacity created by Chinese firms, backed by subsidies, has depressed prices in the global market, making it difficult for firms from other countries to compete. For example, Sharp, a Japanese display manufacturer, recently announced the closure of its Gen 10 LCD factory, further consolidating Chinese dominance in the industry.
In addition to pricing pressures, China’s extensive use of intellectual property theft has given it a competitive edge. Chinese companies have been implicated in multiple cases of industrial espionage, acquiring key technologies from competitors in South Korea and the US This has further fueled China’s ability to innovate and scale up production quickly.
Looking ahead, China is poised to continue its dominance in the global display market, with further innovations in MiniLED and MicroLED technologies expected. China’s advancements in display technologies are likely to have spillover effects into related industries, such as semiconductors, where similar manufacturing processes are used. This raises concerns about China’s growing influence in critical technology sectors.
The report concludes with a set of recommendations for US policymakers. To counter China’s dominance, the US could introduce targeted industrial policies that promote domestic innovation and manufacturing in high-tech sectors, including displays. Strengthening intellectual property protections and increasing collaboration with allies, particularly South Korea and Japan, could also help to mitigate the risks posed by China’s rise. Additionally, efforts to support the development of next-generation display technologies, such as MicroLEDs, could provide a pathway for US firms to re-enter the global display market.
