What Display Daily thinks: China’s entry into the large OLED panel market poses a notable challenge to Korean companies that have hitherto monopolized this sector. TCL CSOT’s acquisition of JOLED’s manufacturing equipment is seen as being an immediate threat to the country’s medium to large-sized OLED panel business. As far as the Korean display industry is concerned, it needs to invest in new technologies to stay ahead of Chinese competitors and move out of the fray to avoid having to compete on price as competition grows intensive.
The big question is how much more investment and where to put the money? Is it in OLEDos, is it in MicroLED, is it verticals? The Korean display industry can’t keep trying to avoid the fight by giving up territory. But, how do you fight against better pricing and competitive supply when you are not set up for it? You can’t be in a manufacturing business without getting your hands dirty. And, yes, jumping ahead on technology would work, but any major transition that you plan for tomorrow, impacts what you do today.
The only logical step forward is to pursue MicroLED and silicon based display technologies, and move towards a different paradigm for display manufacturing, one where there are barriers to investment, barriers created by technology and IP, and one in which, hopefully, you move towards a fabless display manufacturing model, much like you have in the semiconductor business with companies like TSMC. That’s the future. But the now keeps getting in the way.
TCL CSOT’s Move on JOLED Equipment Makes Korean Display Industry Nervous
Actually, anything that Chinese manufacturers do in the OLED space rattles the Korean display industry, probably a lot of PTSD based on what happened in the LCD market. Annd so it goes with TCL CSOT’s expected acquisition of JOLED’s manufacturing equipment and the likelihood that the company is going to expand its capability to produce large OLED display panels.
Samsung and LG have had an edge in the mid-to-large OLED panel market by adopting advanced inkjet printing processes, as opposed to the vacuum deposition process typically used by Chinese competitors. However, TCL CSOT has already shown its chops in inkjet printing technology and is now threatening to up the ante with the help of JOLED’s bankruptcy.
Still, the Korean display industry should be holding a commanding 95.2% global market share of large OLED panels. There seems to be a sense of confidence that analysts have in Korea because of their firm believe in the technological limitations of Chinese companies. Nam Sang-wook, an associate research fellow at the Korea Institute for Industrial Economics and Trade, told Korea’s Financial News that CSOT has showcased prototype TVs using inkjet-printed panels, but their current technological capabilities make it challenging to achieve the necessary yield for stable mass production.
The PTSD is not limited to the LCD market. In 2021, South Korea boasted an overwhelming market share of nearly 80% in OLED smartphone shipments. However, this year, that share is expected to decrease to 57.6% for Korea and an increase to 42.4% for China,. The large TV panel market has traditionally been dominated by Chinese companies producing liquid crystal displays (LCDs). These companies have built a thriving business ecosystem by cutting costs, engaging in price warfare, and inflicting significant losses on the LCD sector. Now, the government and analysts, and the industry, in Korea is beating the drum for more investment in groundbreaking technologies that can outpace Chinese competitors over the long term.
