As the Extended Reality (XR) market grows, competition over next-generation displays centered on OLEDoS (OLED on Silicon) panels, a key component, is heating up. While Japan currently leads the OLEDoS market, regarded as the next-generation technology after OLED, China has moved to a large-scale mass production system backed by government subsidies. In Korea, Samsung Display recently began mass production, accelerating its market entry.
According to the industry on the 12th, Samsung Display recently began mass-producing 1.3-inch 4K-class OLEDoS panels to be mounted in Samsung Electronics' XR device "Galaxy XR." This is the first time Samsung Display has mass-produced OLEDoS. With competition intensifying around large OLEDs, the strategy is to diversify the portfolio toward small, high value-added products.
However, the industry is cautious, saying, "Galaxy XR's initial volume will be limited, so its market impact will not be significant." As the XR market is still at a stage where demand has not been verified, this round of mass production is seen largely as a test to prove technology and reliability.
◇ Samsung Display's first OLEDoS mass production… competition with Japan and China kicks off in earnest
Full-fledged competition is expected as Samsung Display enters the OLEDoS market. The market structure, previously led by Japanese and Chinese companies, is projected to be reshaped. Sony of Japan currently leads the OLEDoS market. Sony proved its technological edge by supplying all 4K OLEDoS panels for Apple's "Vision Pro" released last year.
China, which declared the "Panel Rise Round 2," is rapidly catching up. China's Seeya supplied FHD-class OLEDoS for DJI Goggles 2, and Seeya and BMOT, a BOE subsidiary, are reportedly set to supply OLEDoS for Meta's "Quest" series as early as next year. Companies such as Sidtek are also building 12-inch-class production lines, entering a capacity race. It is a "capacity first, demand later" strategy that prioritizes speed over technology.
Samsung Display is expected to expand its OLEDoS business. It is also pushing to supply Apple in addition to Samsung Electronics. It is speeding up development of RGB (red, green, blue) OLEDoS, a next-generation technology. In 2023, it acquired U.S. RGB OLEDoS company eMagin for about 290 billion won to secure technology, and it also created a new organization dedicated to development and commercialization.
LG Display went on the offensive through last year by unveiling OLEDoS prototypes for smartwatches, but this year shifted focus to 8.6-generation OLED and in-vehicle panels. As XR market growth fell short of expectations, it returned to a stable revenue base. However, internal investment is said to be continuing.
◇ Korea, overtaken in OLED, looks to make up ground with OLEDoS
Korean display companies have moved into OLEDoS development because China's pursuit in the OLED market has intensified. According to market researcher Omdia, in the first quarter of last year, Korea's global OLED market share (by shipments) was 48.2%, and it was overtaken for the first time by China, which recorded 50.5%.
OLEDoS is a technology that implements OLED on a silicon wafer to produce ultra-high-resolution images, optimized for wearable devices such as XR headsets and smart glasses. By drastically narrowing the distance between pixels, it can achieve 4K or higher resolution even on a screen around 1 inch, and it is much lighter than conventional OLEDs that use glass substrates. However, it has the drawback of difficult yield improvement due to the challenges of micro-pattern alignment and heat management.
A display industry official said, "In OLED, the technological capabilities of Chinese panel makers have risen significantly to a level comparable to Korea, but that is not the case with OLEDoS," adding, "If our corporations continue to invest and develop technology, we will be able to secure a technological edge in OLEDoS."
However, OLEDoS currently has high production costs and low Production yield, so commercialization is progressing slowly. As with the disappointing sales of Apple Vision Pro, the XR device market is still not large. Omdia expects the XR panel market to reach about $600 million (about 820 billion won) this year. It is very small compared with OLED, which amounts to tens of trillions of won.
However, as the number of manufacturers increases, OLEDoS prices are expected to fall, which could lead to lower XR production costs and potentially help expand the XR device market. Omdia senior researcher Kimi Lin said, "As competition unfolds, OLEDoS prices are dropping rapidly," and predicted, "For the 0.49-inch product, prices will keep falling from $25 in 2024 to $20 this year and $17 in 2026."