"It is true that the current situation is worse than we thought last year," said Lee Dong-hoon, president of Samsung Display while taking office as chairman of the Korea Display Industry Association, pointed out difficulties facing the small and medium-sized display industry. “China's production capacity has increased so much and Korean display companies cannot take an advantage over Chinese companies based on the size any longer,” Lee added regarding large display panels for TVs.
Not only Samsung Display but the Korean display industry including LG Display is still spending the slumping first quarter. Korean display companies’ pain has been growing with a drop in prices of large displays for TVs due to the slow season of the TV market and sluggish sales of small displays due to a slump in smartphone sales.
According to market researcher WitsView on March 7, prices of LCD panels have been falling in general this year. To cite an instance, the price of a 65-inch UHD TV panel dropped to US$ 343 in January, US$ 331 in February, and US$ 315 at the beginning of this month, after hitting US$ 354 at the end of last year.
This can significantly hurt LG Display particularly which had the largest share (19% according to IHS Markit) in the large TV panel market last year. The large-size LCD division is a cash cow for LG Display while the company is massively investing in OLED (organic light-emitting diode) panels. As Chinese makers hit the fast-growing LCD market, concern over a price decline is growing. This is why LG Display recently tightened its belt to reduce costs as significantly as it can.
In the case of small- and mid-sized panels, weak sales of Apple's iPhone X dealt a big blow to Samsung Display. In the first place, Samsung Display hoped to benefit from its exclusive supply of OLED panels for the iPhone X, but against expectations, iPhone X sales were lower than expected. Some experts estimate that Samsung Display’s utilization rate has fallen to 50% to 60%.