About an hour's drive from Hanoi, the capital of Vietnam, is the Bac Giang factory of ICH, which entered the Korea Securities Dealers Automated Quotations (KOSDAQ) market in 2022. The company used the public offering funds to acquire a factory site of 10,000 square meters in Bac Giang in the third quarter of that year. This move aims to aggressively target the organic light-emitting diode (OLED) market for electronic devices (IT).
On the afternoon of the 14th (local time), production of composite materials for IT OLED was in full swing at the Bac Giang factory. The process involves attaching embossed tape, with bumps or patterns, to polyurethane (PU) foam. The PU foam enhances the durability of OLEDs, and the addition of embossed tape provides light-blocking and buffering capabilities. Here, up to 260,000 square meters (equivalent to 36 soccer fields) of composite materials are produced each month.
In another line, films containing the mainstay product, the film-type thin-film antenna (MFA) for smartphones, were being produced wide and flat. By extracting the patterned film and removing the packaging, one can obtain an MFA as small as a fingernail. The MFA is used in various IT devices due to its flexibility and price competitiveness compared to existing flexible printed circuit board (FPCB) antennas.
ICH is focusing on the IT OLED market, even at the cost of reducing the revenue share from MFA. This is based on the expectation that the related market will explosively expand. This is why Kim Young-hoon, the CEO of ICH, purchased the factory site in Vietnam despite opposition from employees. He believes that major display corporations will begin mass production of 8.6-generation IT OLEDs in the future.
The 8.6-generation glass substrate measures 2,290 mm in width and 2,620 mm in length, which is more than double the area of the previous 6th generation (1,500 mm×1,850 mm). Consequently, more panels can be produced from a single glass substrate, enhancing productivity and cost competitiveness. However, significant expense and time are required for line construction, leading LG Display to maintain the 6th generation.
Meeting at the factory, CEO Kim expressed confidence that the market size for IT OLED will grow. He noted, “The moment luxury items become necessities and high-end products become mainstream, the market will experience explosive growth.” He explained that while approximately 450 million laptops, PCs, and tablets are sold annually, only about 18 million of these will be equipped with OLEDs, but this number is expected to grow to 200 million by 2026.
In fact, the Korea Display Industry Association projected that IT OLED sales will reach approximately $3.1 billion (about 4.5 trillion won) in 2024, representing a 138.5% increase from the previous year. By 2027, related sales are expected to hit $10 billion (about 14 trillion won).
CEO Kim indicated, “To provide touch screen functionality in IT devices while maintaining thinness, OLED is essential,” adding, “There is a growing number of users wanting thin and touch-enabled devices.” ICH has already supplied OLED composite materials to laptop and PC manufacturers such as Dell, Hewlett Packard (HP), and Lenovo since last year and forecasts related sales to reach 10 billion won this year.
ICH acquired the polyurethane (PU) division of its former competitor, Main Electcom, last year. This was to internalize the procurement of PU foam, a key raw material, and reduce sourcing risks. Additionally, they purchased more factory sites in preparation for expanding dedicated facilities for global customers. They also expect sales oriented towards secondary batteries. Once target customers begin mass production next year, ICH is ready to respond immediately to the demand as reliability tests have already been completed.
ICH reported 43.2 billion won in revenue last year but recorded an operating loss of 10 billion won. In the third quarter of this year, cumulative revenue reached 49 billion won, surpassing last year, and operating losses were reduced to 1.3 billion won. ICH is expecting to turn a profit this year. CEO Kim noted, “It takes about a year for investment results to emerge,” and added, “Last year and this year were stages focused on investment, while starting next year, it will be a stage expecting to reap rewards.”