This week, as I write my editorial, there is a lot of news coverage of the apparent rapprochement between the two halves of Korea. It’s great to see some break in hostilities, although the reality of any concrete steps to a long term peace and de-nuclearisation remains to be seen. I was visiting LG in Paju, which is close to the border with North Korea, in the same week as a nuclear test some years ago which made the threat feel very real. (although staff joked that any missiles would go straight over them on the way to Seoul).
Much of the language in the agreement is very vague and it is hard to see how it might be made real. Nevertheless, good words may be a positive start. Of course, if the North Korean economy starts to really grow, that could provide a boost to the regional economy.
My suspicion is that this deal may be influenced by the recent trip of Kim Jong-un to Beijing. Without some level of cooperation from China, North Korea cannot survive, so the Chinese have more influence than anybody else on the dictator.
Increasingly, the politics in China is important to look at and understand, to the extent that you can from outside. This week, we have an interesting article from David Hsieh at IHS Markit that emphasises the effect of Chinese political and economic decisions and policies on the development of the LCD industry. I remember back around 2003 when NEC said that it was going to stop developing its LCD business on the basis that it had become just a game of money, rather than technology. It has proved to be so and the reality of the next phase of development in the supply chain from the new fabs in China is very largely the result of capital being available at little or no cost.
Of course, governments have always supported LCD making in a variety of more and less obvious ways, with utilities, land and permissions as well as covering a lot of R&D cost directly and indirectly (e.g. in Taiwan by support from ITRI). In fact, it’s hard to imagine the industry developing without such support. However, although I have known intellectually what has been going on in China, I was still surprised to see this chart from IHS Markit that was presented at the MIPTV event a couple of weeks ago. It highlights the huge dominance that China is going to have on the industry over the next few years.
