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The Korean display industry drove Korea’s exports, making Korea a display powerhouse in the world one exporter just 10 years ago. But it has been put into a position to completely lose its power as Korea’s national strategic industry due to a price war initiated by Chinese display makers and a complex global crisis.

LG Display and Samsung Display are struggling to find their ways out of the deterioration of their performance even after withdrawing from production of liquid crystal display (LCD) panels. The high-priced organic light emitting diode (OLED) panel sector regarded as a future growth engine is not growing fast due to the economic downturn. Even in the OLED panel sector, Chinese display makers are within striking distance of Korean display makers, experts say.

On Aug. 30, Display Supply Chain Consultants (DSCC), a market research company, predicted that LCD TV panel prices hit an all-time low in August and that an L-shaped recession will continue in the fourth quarter. According to DSCC, the average price of a 65-inch ultra-high-definition (UHD) panel in August was only US$109, a 62 percent drop from the highest price of US$288 recorded in July in 2021. The average price of a 75-inch UHD panel was only US$218, which was only about half of the highest price of US$410 in July last year. DSCC predicted that the average panel price in the third quarter will fall by 15.7 percent. As Chinese companies’ price war and the effect of stagnation in consumption overlapped, the more LCD panels display makers produce, the more loss they suffer.

As panel prices fell, manufacturers responded by lowering facility utilization rates. DSCC said that the LCD factory utilization rate descended from 87 percent in April to 83 percent in May, 73 percent in June, and 70 percent in July.

Now that the LCD panel business has become no longer lucrative, Korean display makers have shut down their LCD business or shrunk their sizes. In the LCD sector, China has outpaced Korea since 2018. China’s LCD market share reached 50.9 percent in 2021, while that of Korea dropped to 14.4 percent, lower than Taiwan’s 31.6 percent.

Samsung Display already announced its withdrawal from the LCD business in June. Only 10 years have passed since the company was spun off from Samsung Electronics in 2012. LG Display has decided to halt domestic LCD TV panel production until 2023 and reorganize its business structure centering on OLED panels. Its Chinese LCD production line will be gradually converted to produce LCD panels for IT or commercial products. TrendForce predicted that LG Display will stop operating its P7 Plant in the first quarter of next year.

Korean display makers’ waning LCD business led to a situation in which Korea even lost first place in the display industry. Korea with a display market share of 33.2 percent was already overtaken by China with 41.5 percent) in 2021 according to market researcher Omdia and the Korea Display Industry Association. Korea’s market share has never rebounded in for five years since 2017 amid the Korean government’s neglect. Seventeen years have passed since 2004 when Korea overtook Japan to rise to the top of the world in the LCD industry. Korea’s LCD exports amounted to more than US$30 billion in 2014, but fell to US$21.4 billion last year.

A bigger problem is that Korean display makers may lose its leadership in the OLED panel sector although it is still standing at the top spot. While Korea’s OLED market share fell from 98.1 percent in 2016 to 82.8 percent last year, that of China rose from 1.1 percent to 16.6 percent. Considering that the high-end TV market is highly likely to shrink for the time being due to a full-fledged global consumption contraction, some analysts say that the technology gap between Korea and China can be sharply narrowed through this looming TV market slump. According to industry sources, the Chinese government is now focusing on giving subsidies to the development of OLED panel technology rather LCD technology. On the other hand, in Korea, displays were also wiped out from national strategic technology industry items under the Restriction of Special Taxation Act which can receive tax benefits for R&D activities on displays.

It’s the end of an era for LCD panels, or at least for those manufactured by Samsung. The Korean firm has been teasing the end of its LCD manufacturing for years, but now, the deadline is about to be reached. From June 2022, Samsung Display will no longer produce liquid-crystal displays (LCD). This does not mean that the end of LCD panels in smartphones, computers, and other electronics. It’s just Samsung leaving the segment due to tough competition from its Chinese and Taiwanese counterparts.

Instead of keeping a tepid LCD business, the company will shift efforts to OLED (organic light-emitting diode) and QD displays. The OLED panels have become the “best” for the smartphone market. There is still a predominance of LCD screens, but most of the flagship, premium mid-range, and even conventional smartphones are getting OLED displays nowadays. LCDsare still very popular in the segment of PCs and laptops, however.

According to Display Supply Chain Consultants (DSCC), the average price index of LCD panels, measured against 100 in January 2014, will fall to 36.6 in September of this year. The figure has dropped farther from the record low of 41.5 in April of this year. It’s also 58 percent lower than the record high of 87 in June 2021.

Unfortunately, no investment plan details have since been announced. However, the employees of the LCD business should retain their jobs. The company will likely move them to the Quantum Dot Display business. Worth noting, that Samsung has been trying to leave the LCD segment since 2020. The initial plan was to close the business at the end of 2020. However, these plays have been delayed by Samsung Electronics. The sudden increase in the prices of the LCD panels during the COVID-19 pandemic urged Samsung Display to keep the manufacturing for a while. This resulted in an entire 2021 of continuous manufacturing. Now, however, the business seems to have reached the deadline.

The display affiliate was first formed in 1991, as an LCD business arm under Samsung Electronics. It formally launched in 2021, as Samsung Display. It has merged with three local and Japanese makers of active-matrix organic light-emitting diodes (AMOLED), for the production of advanced types of displays. The company will no longer produce the panels for Samsung TVs which will likely push forward the portfolio of QD and OLED smart TVs.

The mid-range segment of smartphones may not suffer a big impact. After all, there are countless LCD makers still operating in the industry. As far as the mobile segment is concerned, the company is doing a good job. The Galaxy S22 series is successful in China, and the company is preparing the terrain for the Galaxy Z Fold 4. The flagships and the foldable offer the best Samsung has been developing in display tech.

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A string of new LCD factories being built, combined with slow demand for notebook and desktop PC screens, caused LCD prices to fall during the first three months of the year, and the downward trend is expected to continue, vendors and analysts said.

Falling prices for LCD (liquid crystal display) screens should help ensure that users find bargains for new monitors, laptops and LCD TVs this year, since the screen is among the most-expensive components in those products. The price declines are also causing vendors to improve picture quality to catch users" eyes and draw them away from competitors.

Makers such as LG.Philips and Samsung Electronics, the world"s two largest LCD producers, are ramping up production at state-of-the-art factories, while rivals continue to add lines at existing plants. Other big players, such as AU Optronics in Taiwan, expect to add plants later this year, which should help keep LCD prices tame.

"The biggest impact from the new plants will be in the first part of this year, but there will be some impact throughout the year," said Frank Lee, an LCD industry analyst for Deutsche Securities Asia in Taipei.

The new LCD plants were built largely to keep pace with demand for LCD TVs, which have been among the hottest-selling items this year. Cutthroat competition among LCD makers also has been a boon to users, ensuring steadily falling prices for the past few years, as screen sizes increase.

For example, prices for 42-inch LCD screens that will be delivered to TV makers in the second half of April fell by $35 each since the end of March, to an average of $890, according to WitsView Technology Co., an industry researcher. Prices for 19-inch panels for PC monitors fell $5 to an average $160.

Average selling prices for LCD panels at AU Optronics fell nearly 12% quarter-on-quarter by the end of March, and the company forecast continued declines into the second quarter, according to executives at its first quarter earnings conference Thursday.

"Screen prices have remained weak in April but should stabilize in May or June," said Hsiung Hui, executive vice president of strategic planning at AU.

The company expects the price of screens used in desktops and laptops to drop by about 10% quarter-on-quarter during the April to June period, while LCD-TV screen prices will decline by a smaller percentage, in the mid single digits, it said.

LG.Philips said its sales declined in the first quarter compared to the fourth, because of a decline in the average selling prices in LCDs destined for laptops and desktop monitors, with an overall price decline of around 10% for all LCD screen products.

The South Korean company, a joint venture between LG Electronics Inc. and Koninklijke Philips Electronics, said its average selling prices in the current quarter will drop by a mid- to high-single digit percentage compared to the end of the first quarter.

The company is increasing production at a state-of-the-art LCD factory in Korea, as is rival Samsung. AU is building a similar plant in Taiwan that it expects to be in production by the third quarter of this year. LG said it would produce mainly 42-inch and 47-inch screens at the plant, aimed at the LCD-TV market.

Other LCD industry competitors are also increasing production to keep up with demand for LCD-TVS. On Wednesday, S-LCD Corp., the LCD-panel manufacturing joint venture of Sony and Samsung, said it plans to invest $238 million to expand production at its factory in Tangjeong, South Korea.

Samsung’s display-making subsidiary, Samsung Display initially decided to shut down its LCD business by the end of 2020. The company was reportedly forced to reconsider after the demand for LCD panels increased in the post-pandemic (Covid-19) period. In 2021, more reports suggested that the company again decided to stop producing LCD panels, but Samsung didn’t stop making them. However, according to a report by Sammobile, Samsung Display is now finally ready to shut down its LCD production. The report also suggests that Samsung is now buying LCD panels from China.

As per the report, Samsung might be planning to shut down LCD panel production in June as it doesn’t align with Samsung Display’s long-term vision for the business. The company plans to substitute LCD panels with Quantum Dot (QD-OLED) displays as Samsung recently repurposed an obsolete LCD plant to produce OLED panels.

The company is not willing to compete in a market that’s dominated by affordable panels from Chinese and Taiwanese counterparts. The falling prices of LCD are also preventing Samsung from continuing production, the report claims.

Samsung Display’s largest buyer was the consumer electronics arm of the conglomerate, Samsung Electronics. However, the company itself is opting for affordable LCD panels from Chinese and Taiwanese suppliers. Samsung Display is expected to primarily focus on the manufacturing of Quantum Dot and OLED displays after its LCD business shuts down. The employees appointed for the LCD production are also likely to be transferred to the QD division.

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The company strives to expand its automotive display business as it represents a strong future growth engine and key contributor to its Order-to-Order business. LG Display will unveil a wide range of revolutionary automotive displays featuring key proprietary technologies such as P-OLED and LTPS (Low-Temperature Polycrystalline Silicon) LCD, innovations which enable larger, higher-resolution displays and more distinctive, practical designs.

The company’s LTPS LCD-based Head-Up Display (HUD), which achieves up to 5,000 nits, meets the driver’s needs while maintaining premium picture quality. Another innovation, glasses-free 3D display panel, maximizes the display’s 3D effect by utilizing cutting-edge eye-tracking technology to give viewers a level of visual satisfaction they have never experienced before.

The company will also showcase its Thin Actuator Sound Solution, a new technology designed to take the infotainment user experience to the next level. LG Display’s film-type exciter technology allows the device to vibrate off display panels or interior materials for a richer, 3D-immersive sound experience. This Thin Actuator Sound Solution even received a CES® 2023 Innovation Award (‘In-Vehicle Entertainment & Safety’ category) for its excellence in space efficiency, design innovation, sound experience innovation and eco-friendliness.

In the North Hall, LG Display will also unveil its third-generation OLED TV panel that achieves the most advanced picture resolution to date by applying ‘Meta Technology’.

LG Display will present its comprehensive OLED line-up, from the largest 97-inch OLED display to 77-, 65-, 45-, 42-, 27-inch OLED TV panels and ultra-small 0.42-inch OLEDoS.

New Movable OLED concept designs leveraging the technology’s thin and light qualities for future mobility will also feature at CES 2023 to bring greater utility to people’s distinctive lifestyles.

OLED Glow is a 27-inch OLED concept that is not only height and angle adjustable, but also comes with convenient touch technology. BeFit Trolly, which combines a wheeled storage design frame with a 48-inch OLED panel boasting CSO (Cinematic Sound OLED) technology that creates sound directly from the display without additional speakers, maximizes functionality, mobility, convenience and interior designs.

Starting this month, the company will mass produce the gaming OLED panels to be featured in premium gaming monitors by global tech companies such as LG Electronics, Asus, and Corsair.

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