The United States and Japan are moving to step up cooperation to reorganize the display industry supply chain, following chips. The two countries are reviewing ways to establish a display production base in the U.S. worth up to $13 billion (about 19 trillion won). The move is seen as a strategy to reorganize manufacturing bases around their own countries in a global market led by Korea and China.
According to foreign media and industry sources on the 12th, Japan Display (JDI) is in talks with the Japanese government and the U.S. government to build a cutting-edge panel plant in the United States. After the plan became known, JDI shares surged about 80% in a single day. The market views this as an extension of the U.S. strategy to secure a manufacturing base from semiconductors to displays.
The global panel market is currently split between Korea and China. Premium organic light-emitting diode (OLED) is led by Samsung Display and LG Display, while liquid crystal display (LCD) and mid- to low-priced OLED have seen Chinese corporations such as BOE expand their market share on the back of government support. Japan, by contrast, was once a leader in LCDs, but its influence has shrunk sharply as Panasonic and Sony exited due to deteriorating profitability.
The plan is seen as an attempt to rebuild Japan's display industry, but past failures of government-led investments are prompting caution. Elpida, launched in 1999 through the integration of Hitachi and NEC's memory businesses, went bankrupt in 2012 after losing ground to Korean corporations, and JDI, formed by combining the LCD institutional sectors of Sony, Hitachi and Toshiba, has long struggled with chronic losses due to delayed transition to OLED.
Economics is also a key variable. Displays are a red-ocean industry with fierce price competition, and producing them in the United States, where labor and operating costs are high, raises serious concerns about weakened competitiveness. In fact, Taiwan's Foxconn once made a splash with plans to build an LCD plant in Wisconsin, but the project was drastically scaled back or shifted from the initial plan due to profitability issues.
An industry official said, "Whether this project will lead to large-scale mass production or remain a symbolic message can only be judged once specifics such as actual investment execution and a groundbreaking schedule are disclosed."