Invest KOREA

Vision takes the most important role among five senses of human beings, who absorb most information through vision. As display plays a key role in providing visual information, its technological development is taking place at the fastest pace, with growing importance. Display is a key industry that is able to visualize information, connecting people and machines in the hyper-connected society of the 4th industrial revolution. Furthermore, its application areas are continuing to evolve, from TV and IT devices into automobiles, medical, and signage fields. Recently, with the opening of the non-face-to-face trend provoked by the COVID-19, the role of display has become more important because remote working, online education, and video conferences can only be conducted by means of display. With the arrival of this non-face-to-face era, the importance of display is going to get bigger, with expanding market size.

The 2021 global display market is expected to grow to USD 157.3 billion, 26.9% up from the previous year due to an increasing demand for premium OLED and IT products, and rising prices. The OLED market is estimated to reach USD 37.7 billion, up 25% from the previous year, led by an increased demand from mobile and TV markets, and expanded production of premium products such as foldable phones and rollable TVs. Despite a decreased demand for mobile, the market size of LCD is anticipated to amount USD 118.8 billion, thanks to a hike in LCD prices, and rising demand for contactless IT products driven by such trends as remote working, and online education. By application, total demand for TVs is likely to decrease 1% from the previous year due to a decrease in demand for LCD TVs in North American and European regions despite increased demand for OLED TVs. However, the demand for mobile is expected to climb 0.6% year-on-year due to expansion of 5G roll-out, increased demand for newly launched OLED products such as foldable phones. The demand for IT applications is estimated to go up 5.9% from the previous year, led by increasing demand for non-face-to-face products required for remote working and video conferences, which are necessitated by COVID-19. When it comes to the supply of display, Korea is expected to increase supply of large-size products led by the world’s first mass production of QD (by Samsung Display), and OLED for TVs (by LG Display), while China is anticipated to increase production of small- and medium-sized Flexible OLEDs thanks to an increase in production from newly built and expanded facilities, potentially leading to a significant expansion of global OLED supply.

The display market in the early days was led by Japan, with Sharp starting production of 1st generation LCD in 1990. Although Korea began producing LCD in 1995, later than Japan, it surpassed Japan in 2004 and clinched the top position in the global panel market. As of 2020, the display industry is the only industry in Korea that has maintained the global top spot for 17 years in a row, as it accounts for 36.8% of the global display market, followed by China (36.2%), Taiwan (22.6%), and Japan (3.6%). In particular, Korea almost monopolizes the OLED market in the early stage, which is called the display of the next-generation, with 87.1% of market share. In Korea, the display industry accounts for 4% of exports (USD 18 billion, as of 2020) and 4.4% of manufacturing industry GDP (KRW 68 trillion, as of 2017). As facility investment of more than KRW 10 trillion is made in flexible and OLED fields every year, the display industry significantly contributes to national economic development and job creation.
The production base of Korea’s display industry used to be concentrated on Giheung, Cheonan, and Gumi from 1995 to 2004. However, it has moved to Paju and Tangjeong in the process of production line expansion. In Paju Display Industrial Complex, LG Display is producing LCD and OLED panels for large-sized TVs, operating the 7th generation plant, 8th generation plant, OLED production lines and module plants. As it is located near the capital area, it can secure high-quality talent from the nearby universities locally, based on agreements with the local universities and designation of specialized vocational high-schools in the region. In Tangjeong Display Industrial Complex, where Samsung Display is located, support from local governments such as establishment of a display support center, and excellent R&D basis thanks to 10 or more universities located in Asan and Tangjeong region are well provided.

The Ministry of Trade, Industry and Energy (MOTIE) of Korea has presented various policies to foster the display industry. In 2016, it designated 12 new industries including OLED, self-driving cars, and next-generation semiconductors, putting forward promotion policies. In 2018, the Ministry established a display development strategy to push for localization of materials, parts, equipment, and technology development for stretchable OLED in order to achieve OLED sales share of 50% in 2025. In 2019, MOTIE and the Ministry of Economy and Finance (MOEF) supported the establishment of a display innovation process center in which OLED test-bed and performance evaluation of materials, parts, and equipment can be conducted. In particular, the government provides tax credit for R&D personnel and facility investment in OLED fields to foster and develop the OELD industry. For AMOLED, Flexible AMOLED in 9 inches or bigger, and materials, parts, and equipment of AMOLED, 25-30% of tax credit for R&D is provided, with 5-10 % of tax credit for facility investment.

With the growth of Korea’s panel companies, foreign companies in the fields of parts, materials, and equipment in which Korea lacks basis have entered the Korean market. Most foreign parts and materials companies engaged in the production of liquid crystal, glass, and film are in Korea, while foreign equipment companies are carrying out installation, repair, and exchange for companies producing in Korea. Major companies producing materials and parts in Korea include: Germany’s Merck which produces liquid crystal; the U.S.'s Corning, and Japan's NEG and AGC which produce glass, and Dongwoo Fine-Chem and Torei which produce films. As for equipment companies, there are ULVAC, TEL, and USHIO of Japan, and KATEEVA, AMAT of the U.S. With investment for next-generation fields such as QD and QNED planned ahead, it is required to attract investment in high-tech parts and materials companies in conjunction with investment strategies of domestic companies. When it comes to foreign investment of materials and parts companies, it is most important to secure a stable source of demand. In this regard, it is required to cooperate with foreign companies producing high-tech materials and parts that are currently not produced domestically, by utilizing global companies of Korea such as Samsung Display and LG Display.