"China is trying to replicate in OLED the same way it toppled Korea in the past LCD market."
Omdia executive director Jeong Yun-seong on the 21st assessed China's display chase this way at the Korea Display Conference hosted by Omdia at EL Tower in Seocho-gu, Seoul. The analysis is that China is continuing aggressive investment in IT OLEDs on the back of massive government subsidies and monopolistic revenue from the LCD market, raising the possibility of a repeat of past market encroachment. The industry judges that the OLED technology gap between Korea and China has narrowed to a little over a year. In particular, in the 8.6-generation investment competition, the next-generation core process, Korea is already outnumbered by China.
◇ China zeroes in on 8.6-generation with its "LCD victory formula"
Experts that day picked IT (notebooks, tablets, etc.) OLEDs as the next battleground for the display industry over the next five to seven years. With the existing smartphone OLED market entering a mature phase and the TV OLED market growing slowly, the IT OLED market has emerged as a key growth driver, the analysis said. Omdia director Park Jin-han said, "With the full-fledged arrival of AI PCs and Apple planning to equip the MacBook Pro with OLED starting in the second half of next year, the market is opening in earnest," adding, "Following smartphones, IT devices are emerging as the next growth axis of the OLED market."
The problem is that China is applying the same "victory formula" from the LCD era to this market as well. In the past, China concentrated investment in 10.5-generation LCD lines and flooded the market with large panels such as 65- and 75-inch at low prices, crushing Korea's LCD display industry. Backed by massive government support, it secured capacity through large-scale investments and then captured the market with a low-price offensive.
This strategy is being replayed in 8.6-generation IT OLEDs, the next-generation core process. The 8.6-generation uses larger glass substrates than the existing 6-generation to maximize production efficiency for IT device panels. In Korea, Samsung Display is the only company currently investing at a scale of 15,000 sheets per month, aiming for mass production early next year. In contrast, four Chinese companies—BOE, CSOT, Visionox, and Tianma—have successively announced 8.6-generation investments, and BOE plans mass production in the second half of next year. LG Display has not yet been able to invest due to financial difficulties and issues securing customers, effectively creating a "4-to-1" landscape.
Park said, "If the current trend continues, China will account for 64% of 8.6-generation IT OLED capacity in 2028 and overwhelm Korea," adding, "Even with a technological edge, if you fall behind in capacity, it is hard to keep market leadership."
◇ "Going to OLED with LCD money"… Concerns of a "two-front war" from IT to TVs
Behind the aggressive investments by Chinese display companies is a "virtuous cycle of investment" created by massive government subsidies intertwined with monopolistic revenue earned in the LCD market. China has already solidified a de facto monopoly in the LCD market, with a 70% share in TV panels and 68% in monitor panels. As profits gradually improved, funds earned from LCDs began flowing into next-generation OLED investments.
On top of that come Chinese government subsidies, leading to a low-price offensive. The Chinese government directly supports about half of the investment amount and provides additional subsidies if a certain utilization rate is maintained. Executive director Jeong said, "This creates a structure that allows them to wage a volume offensive even while taking losses," adding, "If Korea sells a product for 1 million won, China can endure even if it sells for 700,000 won, and this is why."
Experts are also paying attention to the possibility that China will convert its 8.6-generation IT lines to TV use in the future. Executive director Jeong said, "Even if Chinese companies start with IT panels, they could ultimately expand to TV panel production to increase utilization," adding, "BOE already has experience making TVs on an 8.5-generation line, and CSOT has a precedent of producing a 65-inch TV sample using inkjet technology."
If China produces IT and TV OLEDs at the same time, there are concerns that Korea's display industry could take a double hit not only in the rising IT OLED market but also in the TV market. Executive director Jeong said, "China knows that if it shakes the foundation of the IT market where Korea is focused, the entire display ecosystem could be shaken," adding, "The domestic industry must not rest on past success and should remain alert."