Expanding Tax Credits to Display Makers
The Korean government will add display technology to national strategic technologies, expanding tax credits to manufacturers of display panels.
At present, only semiconductor, battery and vaccine are classified as national strategic technologies under the Restriction of Special Taxation Act, while display is categorized as a new growth and source technology. The first group of technologies are eligible for up to 40 percent tax credits for R&D investment and 6 percent tax credits for facility investment, while the second is entitled to a maximum of 3 percent tax credits.
The domestic display industry has repeatedly called on the government to designate display as a national strategic technology,
The Korean display industry is expected to invest about 50 trillion won over the next five years, so it is possible for Korean display makers to receive additional tax credits of about 100 to 150 billion won annually, according to the Korea Display Industry Association.
Experts expect domestic display makers' earnings to improve as they will be able to regain their competitiveness and shift their focus to organic light emitting diode (OLED) displays in earnest.
As the global display market shows no signs of a rebound, domestic display makers are seeking a breakthrough from new business items such as displays for extended reality (XR) and vehicle displays.
The Korea Display Industry Association formed the XR Display Industry Council to stimulate innovations in the XR display industry, a future market for display makers. Industry insiders predict that the XR device market will start growing in 2023 and expand to one billion units by 2030, similar to the smartphone market (1.2 billion units).