Global display makers have waged intense competition to lead the liquid crystal display (LCD) market in recent several years and now they are turning their eyes to the rapidly expanding organic light emitting diodes (OLED) market.
Samsung Display and LG Electronics, which are strong in small and large OLED panels, respectively, are seeking to apply OLED panels to more products.
Samsung Display recently introduced new OLED laptop panels at “Samsung OLED Forum 2019 Taipei.” Samsung Display developed OLED panels for 13.3-inch and 15.6-inch laptops in the first half of this year. It is now planning to expand its product lineup by adding a 13.3-inch full HD model sometime next year. The company will also make a massive investment in QD display to jump into the OLED TV market.
LG Electronics is the frontrunner in the OLED TV market. The company is expecting to benefit from the expansion of the OLED panel market. As Xiaomi announced it would join the OLED TV market next year, a total of 17 international players, including LG (Korea), Sony (Japan), Hisense (China), Philips (Europe) and Vizio (the U.S.), are likely to compete for a larger market share.
If Samsung Electronics launches OLED TVs following Samsung Display’s mass production of QD displays in 2021, a total of 18 players will compete in the OLED TV market. According to market research firm IHS Markit, shipments of OLED TVs are expected to grow from 3 million units this year to 11.5 million units five years later.
In the global premium TV market, Samsung Electronics far outsells LG. According to IHS Markit, the global market dominance of Samsung’s QLED TVs over LG’s OLED TVs was more apparent in the first half of 2019 than in the same period of last year. Sales of Samsung’s QLED TVs reached US$4.16 billion in the first half of this year, 87 percent up from US$2.23 billion in the same period last year.
In contrast, sales of LG OLED TVs dropped by 18 percent from US$1.86 billion in the first half of last year to US$1.52 billion in the same period of this year. Samsung’s QLED TV sales were 1.2 times more than that of LG’s OLED TVs in the first half of last year, but the gap widened to 2.7 times this year.
Besides, Sony, the former premium TV market leader, is catching up with LG. While LG’s OLED TV sales decreased by 18 percent in the first half of this year, Sony posted a 12 percent increase. Panasonic also recorded a 10 percent gain during the same period.
The OLED market can be swayed by the participation of Chinese display. At present, the global market share of Chinese brands stays in the 1 percent range. However, if Chinese panel producers that receive subsidies from the Chinese government churn out OLED TVs at a rock-bottom price, as they have done in the LCD market, the profitability of domestic companies is likely to plummet.
All things considered, Korean display makers need to focus on large-sized OLED panels to earn a competitive edge in the OLED TV market. As the TV screen is getting bigger and bigger, 65-inch TVs, not 55-inch ones, have become the market flagship.
LG Electronics has an aggressive goal of producing 10 million large-sized OLED panels per year by 2022 as LG Display is fully operating both Paju plant in Korea and Guangzhou plant in China. However, LG Display has to boost the yields of its Guanzhou plant that began initial operations in August. It is not easy to make large OLED panels. Industry watchers estimate sees Guanzhou plant’s yield rate at somewhere between 50 percent and 60 percent.
Samsung Electronics plans to take a two-track approach to cover both QLED and MicroLED TVs. Samsung Display has decided to invest 13 trillion won in the development of QD OLED displays over the next five years.