Samsung & LG Face OLED Notebook Display Pressure From Chinese CompanyThat Gets Massive Government Support.
South Korean OLED manufacturers are under enormous pressure from Chinese Company BOE, who has recently boosted production of OLED panels in a move that will double their capacity as PC manufacturers look to use OLED display in a new generation of notebooks.
The big losers could be LG Display who has only just managed to deliver a profitable quarter after seven losses in a row.
Also coming under pressure is Samsung who are a major supplier to Apple.
This real issue for the South Korean manufacturers is margin with BOE now able to deliver volume at a lower price.
China’s BOE Technology Group with the backing of the Chinese Government are tipping billions into OLED manufacturing with construction of new plants now underway.
The A$10 billion dollar factory will start rolling out OLED panels for notebook computers and tablets using leading-edge next generation 8.6 technology.
“We’ll build the world’s most advanced and largest production base for midsize OLED panels,” Chairman Chen Yanshun said at the groundbreaking ceremony yesterday.At this stage Samsung is planning to start generation-8.6 mass production in 2026, by upgrading existing facilities in South Korea, with BOE management claiming that their panels will be considerably cheaper than those from South Korea manufacturers.
Recently the South Korean Government moved to prop up the South Korean OLED manufacturing industry with Samsung now buying panels from arch rival LG Display.BOE claim that they intend to complete construction at the B-16 site this year, with the Chinese Company set to install manufacturing equipment in September 2025 and start production at scale in 2026.
The Company already has orders from the likes of Lenovo, Asus MSI and Acer.
With OLEDs, the Chinese company hopes to replicate the success they had liquid crystal displays with China dominating the industry with brands such as TCL and Hisense in the TV market having a pricing advantage over their competition.
BOE built a succession of LCD factories with support from China’s government, boosting production capacity to supply panels at low prices.
This support saw them push Japanese and South Korean manufacturers into a position where they were uncompetitive.
Samsung at one stage accused BOE of poaching staff and stealing their technology.
BOE led the global market for LCD TV panels by value last year with a 26.5% share, more than triple Sharp’s, market share according to research groups.
BOE’s technological capabilities led to its selection as a supplier for Apple’s iPhone, a move that hurt both LG Display and Samsung.
Research Group DSCC claims that the Chinese group’s share of the global OLED panel market stood at 12% last year, while Samsung had 56%, but within striking distance of LG Display’s 18%.
The biggest loser is set to be LG Display whose profit margins are already wafer thin.
On top of the new Chengdu plant BOE plans to build a second plant that will expand their capacity by 50%.
In other news BOE ranked fifth in international patent filings last year behind Huawei Technologies, Samsung, Qualcomm and Mitsubishi Electric.
The Chinese government has played a key role in BOE’s growth. Its top shareholder is a fund owned by the Beijing city government, and the company received several billion dollars in subsidies last year.
The new facilities are being built with state support as well.
The Chengdu plant will be operated by a joint venture that is 53% owned by BOE, with the rest held by state-owned entities, letting BOE limit how much of its money is spent.
The panels are not subject to American trade curbs against China, if tensions mount further, BOE’s ties to the state could hurt its business in the U.S claim observers.
