More Than 100 Korean Engineers Move to BOE
China’s BOE benefited from a seven-year legal battle between Samsung Display and LG Display over organic light emitting diode (OLED) panel technology, some analysts say. Many Korean display engineers moved to China’s BOE in the process.
On June 23, Nikkei Asia reported that more than 100 Korean engineers moved to China’s BOE while Samsung Display and LG Display locked their horns over OLED issues. Nikkei Asia said they moved to China to receive higher wages and are currently working to build OLED production lines in China.
Previously, the president of an LG Display partner company was indicted on charges of violating trade secrets in the process of jointly developing OLED panels with LG Display. According to LG, he sent technical data on OLED face seals to Samsung Display officials via e-mail in May 2010. Face seal technology increases the lifespan of a display by preventing OLED elements from coming in contact with the air.
In this case, the bone of contention is whether the face seal technical data delivered to Samsung Display officials are trade secrets. The Supreme Court ruled that the economic value of the data in question could not be recognized.
Accordingly, the president of the partner company and Samsung Display employees cleared themselves of the suspicion of technology leaks in seven years. But the Korean display industry suffered a significant blow in terms of human resources.
“As China which has set its sight on growing into a OLED display powerhouse, is focusing on absorbing key human resources and technology from Korea, an outflow of Korean display engineers has reached quite a serious level.” an industry official said. “As China is expanding its influence in the global OLED market, many experts are concerned that Korean display makers will lose ground in the OLED display market due to advancement by their Chinese rivals,” he said.
In fact, dozens of cases of OLED panel technology leaks have been discovered in recent years. The National Intelligence Service and the Ministry of Trade, Industry and Energy said that Korean authorities discovered a total of 17 cases in which leaks of Korea’s major display technologies were blocked for five years and six months from January 2016 to June 2021. Among the major display technologies were five core technologies that can have a huge impact on national security and the Korean economy.
In particular, Samsung Display’s chief researcher and equipment partner company’s CEO who were caught, trying to sell the world’s first OLED process technology developed by Samsung Display to a Chinese company were sentenced to prison early last year. Samsung Display poured over 10 billion won in the development of the OLED process technology.
“Even if Chinese companies use the same equipment and materials as Korean companies, it is difficult for the former to catch up with the latter due to the latter’s rich know-how,” an industry official said. “Therefore, Chinese companies are desperately attracting Korean engineers by offering salaries three times their current salaries,” he said.
China’s growing offensive has produced a rise in its display market share with concerns becoming a reality. In particular, China is making great strides in the market of small and medium-sized OLED panels which has relatively low entry barriers compared to large ones.
According to market research firm Omdia, Samsung Display almost monopolized the market of small and medium-sized OLED panels, occupying more than 90 percent of the market until 2017. However, Samsung Display logged a market share of 73.2 percent in the first quarter of last year, LG Display 14.3 percent, BOE 7.3 percent and China Star (CSOT) 2.4 percent. Omdia predicts that the market share of Korean companies may slide to the 60 percent range this year and that of China may jump to 27 percent.
The large OLED panel market, where LG Display enjoys a 99.9 percent market share, is also facing a change. Industry insiders believe that Chinese companies have been making attempts to entice Korean engineers from Korean large OLED panel makers more blatantly than Korean small and medium-sized OLED panel makers. For example, an LG Display employee was arrested at the end of last year by an investigative agency just before handing over confidential data such as process blueprints for large OLED panels to a Chinese company by obtaining the data after accessing his company’s internal network while working from home.