Low-Cost Production, Technology Theft
Forecasts indicate that China’s OLED shipments for smartphones will surpass South Korea’s by 2025.
According to the “3rd Quarter OLED Market Track” report published by market research firm UBI Research on Aug. 28, the current market share of smartphone OLED shipments for South Korea and China stands at 57.6% and 42.4%, respectively.
However, by next year, the gap is expected to narrow to 53.0% for South Korea and 47.0% for China. By 2025, the numbers will shift to 45.2% for South Korea and 54.8% for China, with China taking the lead. Furthermore, UBI Research predicts that by 2027 the gap will widen with South Korea holding 35.8% and China claiming 64.2% market share.
Nevertheless, South Korea is anticipated to maintain a revenue lead in smartphone OLED sales until 2027, largely because Chinese-made products are generally cheaper. This year, the revenue proportions are 70.2% for South Korea and 29.8% for China, with 2027 projections at 53.6% and 46.4%, respectively.
UBI Research stated, “South Korean display manufacturers produce high-quality OLEDs, ensuring a continued advantage in revenue. However, with immense domestic demand and government support, China’s display industry is also improving its quality.” They further added that “after 2028, China might surpass South Korea in revenue.”
Observers believe that South Korea, the “absolute leader in displays,” might concede its leading position in OLED shipment numbers to China as early as the year after next. A significant challenge comes from China, effectively South Korea’s only competitor in the OLED market, which leverages vast domestic demand and government backing to boost production. Amid slowing smartphone market growth, China’s aggressive push with lower-priced products poses a genuine threat to Korean firms.
China has been focused on bolstering its weaker technological prowess by luring key talent and technologies from domestic companies. There have been persistent allegations of patent theft and reports of China offering lucrative packages to scout top OLED experts from South Korea.
Leading the chase is China’s largest display manufacturer, BOE. The firm has gained attention for successfully supplying iPhone 14 OLED panels to Apple, one of the largest customers in the display industry.
However, industry experts still believe China has a long way to go before overtaking South Korea in the short term. High-value panels allow South Korean companies to maintain profitability despite selling fewer units. The future of OLED competition might be in the hands of Apple. BOE’s momentum seemed to falter after failing to supply panels for the upcoming iPhone 15.
Samsung Display, dominant in the medium-sized OLED market, plans to firmly establish itself in the 8.6-generation OLED market, starting with supplying screens for Apple’s iPads. Samsung Display is investing 4.1 trillion won to construct the world’s first 8.6-generation IT OLED production line in its Asan campus, Chungnam. Industry researcher Nam Sang-wook expects, “The soon-to-open tablet OLED market is critical, and securing dominance there is the primary challenge.” While LG Display leads in the large OLED panel market, the gap with China remains substantial. However, slower growth and diversifying viewing devices in the TV market remain concerns.
Domestic companies are also focusing on untapped markets, such as Extended Reality (XR) and premium displays for vehicles based on OLED. Both companies are investing in OLEDoS technology, which uses silicon wafers for reduced power consumption and lighter weight. Samsung Display even acquired U.S.-based XR panel company eMagin.
In vehicle displays, Samsung Display has been expanding collaborations with global brands like Ferrari, BMW, and Audi. LG Display has a two-decade-long partnership with Mercedes-Benz, continually aiming for market expansion.
Experts stress the need to not only widen the OLED market gap but also prioritize the commercialization of next-gen displays like Micro LEDs. Samsung Electronics has launched a large Micro LED TV, capturing market interest, while LG Display is at the forefront, developing “stretchable” displays based on Micro LED technology.