Chinese display companies have surpassed South Korea in the global organic light-emitting diode (OLED) panel market for the first time in the first quarter of this year. South Korean companies, which had previously dominated the OLED sector requiring more advanced technology than liquid crystal displays (LCDs), now face competition from Chinese firms. Having led the global LCD market with low-cost strategies, Chinese companies have extended their dominance to OLED, putting pressure on the South Korean display industry. Experts warns that without new technologies to outpace their Chinese rivals, Korean firms risk losing their OLED market dominance, just as they did with LCDs.
Chinese companies have expanded into the premium OLED market by leveraging their large domestic market. According to market researcher Omdia on Aug. 11, Chinese display firms held a 49.7% share of the global OLED market by shipment in the first three months of this year, including small and medium-sized OLEDs. South Korea’s share fell to 49%, placing it in second place. A year ago, South Korea held a 62.3% share compared to China’s 36.6%. In just one year, China closed a gap of over 20 percentage points and surpassed South Korea. In the small and medium-sized OLED market, Chinese companies achieved the top position with a 50.5% share, overtaking South Korea’s 48.2%.
China’s rapid progress is fueled by its domestic market of 1.4 billion people. The surge in patriotic consumption amid U.S.-China tensions, combined with government incentives for using domestic components, has boosted Chinese display companies. According to the Korea Display Industry Association, the share of South Korean components in OLED panels used by Chinese smartphone manufacturers like Huawei and Oppo dropped from 78% in 2021 to 16% last year. These manufacturers now increasingly launch smartphones with Chinese OLED panels, marketing them as “cost-effective premium” products using domestically produced OLEDs.
Chinese OLEDs mainly feature in domestic products or in Apple’s budget models due to their lower quality and yield compared to South Korean OLEDs. An industry insider said, “Chinese companies have not yet matched Korean technology in power consumption, weight, and image quality, which is why they have not supplied premium products like Apple’s iPads.” However, Chinese companies aim to quickly close the technology gap by investing heavily with profits from their domestic market.
As OLED technology expands from smartphones to tablets, laptops, and PCs, Chinese companies make substantial investments in these areas. For instance, BOE announced a 63 billion yuan (about $8.79 billion) investment last year to build OLED production lines for IT products, and Visionox is constructing an OLED plant for IT uses. Market researcher Display Supply Chain Consultants (DSCC) predicts that Chinese manufacturers like BOE and CSOT will account for 85% of global display equipment spending from 2020 to 2027, compared to an expected 12% for South Korean companies. “As Chinese OLED technology improves, competition with major South Korean suppliers like Samsung and Apple could intensify, leading to potential price pressures,” an industry expert said. “Therefore, closing the technology gap before such competition escalates is crucial.”
