Chinese, Taiwanese and Japanese companies are seeking to push into the organic light-emitting diode (OLED) market which is dominated by Samsung and LG Display.
Sony is said that it will announce its plan to be supplied with OLED TV panels from LG Display at the CES 2017, the world’s largest consumer technology show, which kicks off this week in Las Vegas. The company will release its TV models equipped with LG Display’s panels with a production capacity of 100,000 units a year, starting from the third quarter.
LG Display plans to invest more than 6 trillion won (US$4.99 billion) in OLED TV displays and plastic OLED displays in the future. Based on it, the company will increase its OLED TV panel production capacity from 900,000 last year to 1.7 million this year.
Samsung Display is also considering a plan to invest over 5 trillion won (US$4.16 billion) in OLEDs this year. The company spent 6.4 trillion won (US$5.32 billion) on expanding its production lines last year. Samsung Display dominates 98 percent of the global market for small and mid-sized OLED panels for smartphones. However, it is inevitable for the company to make additional investments as more and more Chinese smartphone makers are adopting OLED panels in their products.
Samsung Display signed a large deal with Apple to supply flexible OLED displays early last year. Accordingly, the company is expanding its A3 line in phases. Currently, the A3 6th-generation line can produce 15,000 pieces per month. Samsung Display will increase its production capacity to 120,000 by expanding three to four times in the next few years. According to market research firm IHS, the global market for OLED panels is expected to jump 32 percent on-year to US$19.2 billion in terms of sales this year. In terms of shipments, the global OLED market is predicted to rise 22 percent to 630 million units, it said.
An increasing number of Chinese companies are now actively making investment in OLED panels. BOE, which is the most aggressive investor in OLEDs, operates 5.5th-generation production line and is now building the 6th-generation plastic OLED plant in Qingdao. Its third OLED plant construction will begin at the end of this month and finish in 2019. Ever Display produces 15,000 to 20,000 OLED panels a month at the 4.5-generation line. However, it has recently decided to establish its 6th-generation plant for small and mid-sized OLEDs and start mass production from 2019.
Japanese companies are also seeking to regain the lead. The Japanese government has decided to inject 75 billion yen (US$638.14 million or 767.68 billion won) into Japan Display (JDI) which is suffering from financial difficulties. JDI plans to invest the money in OLEDs in order to establish a foothold to compete with Korean companies. JDI was jointly established by Sony, Hitachi and Toshiba to strengthen its competitiveness in the display panel business.
Tai-ming Gou, chairman of Taiwan’s Hon Hai Precision Industry, a holding company of Foxconn, is leading the attempts to overthrow Korean display panels. He forced Japan’s Sharp, which was acquired by the group last year, to stop supplying LCD panels to Samsung Electronics from this year. In addition, Foxconn will invest US$8.8 billion (10.59 trillion won) to establish its LCD plant in Guangzhou in its bid to tap into the LCD market which is dominated by Samsung Display and LG Display.
An official from the display industry said, “The Guangzhou factory is expected to manufacture 10.5th-generation 8K displays and LCD panels for smart TVs starting from 2019, and its goal of annual production will reach 11 trillion won (US$9.14 billion). The company has shown its will to accelerate the competition with Korean firms.”
The large LCD market is being reorganized with the structure of two big players of Korea and Taiwan to three big players of Korea, Taiwan and China. Korea has a 35.4 percent share in the large LCD panel market, followed by Taiwan with 35.2 percent and China with 25.9 percent. While Korea stopped at the 8-generation LCD panels, China’s BOE is building the 10.5-generation production line with a target year of 2018. China Star, a subsidiary of China’s TLC Group, is also setting up the 11th-generation panel production facilities in the city of Shenzhen with an aim of starting operation in 2019. Samsung Display also jointly invested 350 billion won (US$290.94 million), or a 9.8 percent share, in the production line.