Tipping Point Goal
Korea’s display industry led by Samsung Display and LG Display will invest more than 65 trillion won in order to recapture the No. 1 spot in the market share standings in the global display market from China by 2027. The plan is to increase the global market share to 50 percent in 2027, widen its technology gap with competitors by more than five years, and raise its self-sufficiency ratio in materials, parts, and equipment to 80 percent. It stood at 65 percent as of 2022.
The Korean Ministry of Trade, Industry and Energy (MOTIE) laid out the plan at the Display Industry Innovation Strategy Roundtable held at Courtyard Seoul Namdaemun Hotel on May 18. The meeting was attended by MOTIE Minister Lee Chang-yang and industry officials including Samsung Display CTO Kim Sung-chul, LG Display CTO Yoon Soo-young, and Samsung Electronics Vice President Kim Yong-jae.
The Korean display industry will invest more than 65 trillion won (US$49 billion) by 2027 to expand production lines for organic light-emitting diode (OLED) panels for information technology (IT) and research and development of next-generation displays, among other things, to regain the top spot in the market from China and increase its global share to 50 percent.
Korea had held the world’s top spot in displays for 17 years since overtaking Japan in 2004, but it slipped to second place in 2021 due to China’s hot pursuit of Korea in the liquid crystal display (LCD) industry, which has relatively low added value. According to the Korea Display Industry Association, China led the world display market last year with a 42.5 percent share, followed by Korea (36.9 percent) and Taiwan (18.2 percent).
The Korean government plans to facilitate private investment of more than 65 trillion won through taxation systems and policy finance, infrastructure and regulatory improvements.
In February, the K-Chips Act (Revised Tax Exception Limitation Act) raised the tax credit rate for display facility investment from 8 percent to 15 percent for large companies, and provides 900 billion won (US$675 million) in policy finance for new investments through financial institutions such as Korea Development Bank and Korea Credit Guarantee Fund.
In addition, the Korean government will review the designation of specialized display complexes and ease regulations such as allowing companies to undergo safety inspections for handling hazardous chemicals once every two to four years instead of once a year.
The Korean display industry aims to widen its technology gap with competitors, which currently stands at three years to more than five years. To secure super-wide gap technologies, it plans to invest 420 billion won (US$315 million) in R&D funds to upgrade mass-production technologies such as 8th-generation equipment and processes for IT and 10th-generation equipment and processes for TVs. The Korean Ministry of Trade, Industry and Energy (MOTIE) expects the Korean display industry to lower the production cost of related products and dramatically improve the quality of OLED panels which Korea excels in.
Furthermore, the Korean government’s large-scale support will be provided to preempt inorganic light-emitting display (iLED) technology, which is capable of realizing brighter, longer-lasting, and larger screens going beyond the limitations of OLED in order to maintain a significantly wide gap with Korea’s competitors. The MOTIE will launch a large-scale preliminary feasibility study worth about 950 billion won (US$712 million) in the second half of the year to lay the foundation for domestic production of iLEDs across the entire cycle, from materials and components to processes, infrastructure, and product mass production. To create an enabling environment for iLED development, the meeting also launched the iLED Industry Development Alliance involving the display industry, academia, and research labs.
To top it off, a plan was mapped out to strengthen the supply chain by increasing Korea’s independence ratio in materials, parts and equipment from the current 65 percent to 80 percent. Technological independence of 80 small businesses such as fine metal masks (FMMs), exposure machines, and packaging equipment, which are highly dependent on overseas markets, will be promoted in earnest. The Korean government plans to support localization by investing more than 500 billion won (US$375 million) in R&D.
The Korean government’s innovation strategy also includes the creation of three new display markets of transparent displays, extended reality (XR) displays, and automotive displays. The three new display markets are still young and small but have great growth potential. The Korean government will provide a total budget of 74 billion won (US$55 million) over five years to promote the development of transparent displays that are as transparent as glass, ultra-small panels for XR devices which are 0.3 inches or less thick and in-vehicle displays.
The public-private sectors will also train 9,000 talented engineers to lead the next generation of display technology over the next 10 years. Panel companies will nurture human resources that meet demand in a timely manner through recruitment-linked contracting departments, while the government will foster master’s and doctoral manpower by opening specialized graduate schools and establishing new undergraduate majors.