Global Competition
A race to dominate the global panel market for organic light-emitting diode (OLED) panels is rapidly reshaping into a three-runner race with Korea in the front, China in the middle and Japan in the back. The three are spaced far apart.
Korea is enjoying the dominance of the OLED panel market but has been closely trailed by China waging a price war. Japan, which had hoped to turn the tide, appears to have fallen short, as JOLED, the only manufacturer of medium and large-sized OLED panels in the country, has entered a bankruptcy process.
According to foreign media outlets and sources in the display industry, JOLED filed for a workout at the Tokyo District Court on Nov. 27 (local time). The Japanese display maker judged that it was difficult to continue its business due to its deteriorating financial conditions with accumulated debt reaching 33.7 billion yen (about 334.2 billion won or US$28.1 million).
The demise of JOLED, the only Japanese manufacturer of medium and large-sized OLED panels, effectively throws Japan out of the OLED panel race. Some companies such as JDI are producing small OLED panels, but their influence in the global market is meager. Now Korea and China are the only countries left in the global OLED panel race, which has become fierce amid the growth of the OLED panel market.
Currently, Korean panel companies are dominating the OLED panel market. Samsung Display is the leader in small and medium-sized OLED panels, while LG Display leads large OLED panel production thanks to their unrivaled technology and yields.
China is still in pursuit of Korea, but has been narrowing the gap in recent years. According to market research firm OMDIA, Korea dominated the OLED panel market in terms of global OLED sales last year by posting an 80.6 percent share, followed by China with 18.0 percent. Despite Korea’s dominance, the gap between Korea and China has narrowed by more than 10 percentage points, from 73.8 percentage points in 2020 to 62.6 percentage points last year, especially in small and medium-sized OLED panels, which are 9 inches or smaller, with a 78.2 percent share held by Korea and a 20.1 percent share held by China. Market research firm Stone Partners also expects Korea to post a 61 percent share and China 39 percent in the small and medium-sized OLED market this year.
Japan became unable to compete neck and neck with Korea and China in the large-scale market, accounting for only 0.1 percent of the total OLED panel market last year.
China’s No. 1 and No. 2 panel makers -- BOE and CSOT -- are growing rapidly by absorbing and merging small and medium-sized companies. China is rapidly narrowing the technological gap between Korea and China by absorbing personnel and technology from Korean companies regardless of whether it is legal or not. Previously, CSOT in China grew in size by acquiring a liquid crystal display (LCD) production line from Samsung Display.
Those in the Korean display industry are on alert, saying that China is not a threat big enough to close the gap right away, but the case of the LCD market can be repeated. Korean display makers eventually lost their LCD business leadership to their Chinese counterparts due to their carelessness about the rise of Chinese display makers. “Although China is still lagging behind in OLED panel technology, it is closely trailing Korea at a surprising speed,” said a high-ranking official of the Korean display industry.
Accordingly, Korean display makers are concentrating on maintaining their competitive advantage in the premium market. They intend to increase profitability by putting high value-added products at the forefront even if they lose some of their market share to Chinese companies. “Chinese display makers have grown largely by stealing technology,” the official added, “We need to further widen the gap through more advanced display technologies such as foldable, transparent, and stretchable displays.” Samsung Display is leading the display market by creating a new market with foldable displays. LG Display also decided to borrow 1 trillion won (US$770 million) from LG Electronics on March 27 in order use it for preemptive investment.