From OLED to Micro LED: The battle between China and South Korea for the next generation display may enter the match point moment

Market research company Display Supply Chain Consultants (DSCC) research data show that in 2023, according to the display area, South Korea's display panel accounted for only 10% of the world, and China's mainland accounted for 67%. Especially in the emerging technology OLED and future technology Micro LED, South Korea's leading edge is gradually shrinking.

Lee Choong-hoon, head of UBI Research in Korea, said, "If we look at technology development alone, there is a gap of one to two years (between Korea and China) in OLED display." In March this year, Samsung Display President Choi Ju-sun also said that the technology gap between Chinese OLED panel manufacturers and ours is about one to 1.5 years. According to Omdia's forecast, in the first half of 2024, China's mainland's foldable OLED shipments will reach 6.4 million units, accounting for 53% of global shipments - the first time this high-end category has topped the global share.

On the other hand, in Micro LED technology, the Korean industry is also worried. After all, China's mainland region is currently the world's largest LED manufacturing and industrial chain base. Especially from the perspective of top upstream technology, silicon carbide in the United States, sapphire in Japan, monocrystalline silicon in China and gallium nitride have formed an independent core technology route. At the same time, in the emerging perovskite material technology research and development, China's industry has always maintained sufficient investment and exploration intensity.

To this end, the South Korean government recently decided to invest 484 billion won (2.57 billion yuan) over eight years to develop inorganic light-emitting display (iLED, Micro LED, etc.) technology and build an ecosystem. The plan mainly helps South Korea build a "self-sufficient" industrial chain from materials, equipment, processes to terminals.

Some industry analysts believe that the competition between China and South Korea in the advanced display panel and future display panel industry chain is forming a "match point" pattern around OLED and Micro LED.

"Don't listen to the 1.5 years of Korean industry." This is the assessment of an industry insider. He said the timing was more of a slogan for South Korea to inspire internal unity. If you want to standard the product level, IT is probably said that on OLED, Samsung 8.6 generation IT line may be 1.5 years earlier than BOE 8.6 generation IT line mass production.

In fact, South Korea in the OLED industry chain for many years, the formation of the advantage is still huge. This is especially true on the material and equipment side: for example, BOE's latest 8.6-generation OLED B16 line has decided to use South Korea's Sunic System evaporation machine equipment. Japan's Idemitsu Kosan, for example, is promoting the transfer of all its organic light-emitting diode (OLED) material application research and development (R&D) departments to Korea. Idemitsu is a representative petrochemical and materials company in Japan, with annual sales of more than 80 trillion won (about 416 billion yuan), and has original OLED technology.

In the OLED industry, the evaporation machine is equivalent to the lithography machine in the semiconductor market. Currently, only Japanese and Korean companies make them. Japan and South Korea have close cooperation in the upstream of OLED. In addition, Apple, as a large high-end customer of OLED panels, has always preferred products made of Japanese equipment and materials.

According to the Korea Display Industry Association report, the Korean localization rate of OLED raw materials, parts and equipment rose from 65% in 2019 to 71.5% this year. Among them, the Korean localization rate of OLED process parts and materials rose from 60% in 2019 to 70% this year; The localization rate of 19 major equipment rose from 70% to 73%.

Therefore, the leading OLED industry in South Korea is the leading of the entire industrial chain, as well as the leading trade and technical cooperation with Japan and the United States. In this regard, the pace of Chinese enterprises to catch up, far behind the display panel production capacity. 

Giving play to the "market demand and cost competitiveness, the formation of scale advantage" is also the consensus of China's OLED industry at this stage. For example, in the next generation of IT with 8.6 generation line, that is, after Samsung, BOE, recently signed a memorandum of cooperation with Hefei, agreed to invest in the construction of 8.6 generation OLED production line project in Hefei, the total investment is expected to be 55 billion yuan. It is expected that the project is likely to use the "lithographic" technology independently developed by Vicigna, with breakthroughs and differences in yield, cost and display performance. At the same time, the news said that Tianma is also planning to invest in the 8th generation OLED project, is expected to determine the investment plan within the year.

In addition to traditional evaporation technology, Huaxing Optoelectronics has essentially become a global leader in the industrial chain of printed OLED materials, equipment and terminals. Zhao Jun, CEO of TCL Huaxing, said that in the field of next-generation printed OLED display, TCL Huaxing's promotion focus is on the field of medium size display, such as commercial, e-sports displays, notebook displays, as well as differentiated products such as medical, vehicle, and industrial control. Huaxing is expected to launch its first mass production test line 5.5 generation line in the second half of the year, commercial medium size OLED printing screen, and consumer screen next year.

If the printing OLED project of Huaxing Optoelectronics goes smoothly, it will be an opportunity for China's OLED display industry to realize lane overtaking from materials and equipment to the terminal.

On the OLED display, "South Korea's advantages are accumulation, upstream industry chain is strong, and close cooperation with Japan and the United States; China's advantage is that the late investment scale is large, the market demand is strong, and the emerging technology route such as printing and lithography graphics is more active..." Of course, it should also be seen that the bottleneck problem of China's OLED industry on core equipment such as evaporation machines is still to be solved.

As an emerging display technology, Micro LED has high expectations. TrendForce Consulting released the "2024 Micro LED Market Trend and Technology Cost Analysis Report" predicting that the output value of Micro LED chips in the wearable device market alone in 2022 to 2027 compound growth rate (CAGR) will be as high as 136%. In addition, the micro LED display can also be applied to the automotive, IT, color TV and engineering large-screen display markets.

At present, according to overseas media analysis, China's global share of Micro LED equipment procurement is more than 70%. It can be said that China's industry is realizing the "full chain" iteration from the leading traditional LED products to the leading emerging Micro LED display. In response, South Korea's response, on the one hand, is to increase domestic technology development and policy support, on the other hand, to increase cooperation with Japan, China's Taiwan region and Europe and the United States related industrial chains. For example, THE WALL products of Samsung adopted China's Taiwan region AU AM TFT and 錼 innovation technology, Fucai LED chips and other products.

Compared with the lead of OLED South Korea on the whole chain, the advantages of Chinese enterprises and industries in Micro LED are relatively greater. Especially considering the number of investment subjects and the diversification of applications, China's Micro LED industry has the characteristics of blooming. Industry insiders believe that the biggest disadvantage of Korean companies in the display panel competition is the "insufficient number of large-scale subjects." In this respect, our country relies on the advantage of "volume" and forms group operations, which can often win the growth miracle of "force big brick flying".

Especially in the upstream materials and equipment of Micro LED, such as MOCVD equipment, the company has formed a full range of products with independent intellectual property rights; It is the world's leading manufacturer of gallium nitride based LED equipment, with a leading market share in the field of Mini LED nitride home-based equipment. In terms of Micro LED integration, Dazu Laser has developed micro-LED mass transfer, micro-LED mass welding, micro-LED repair and other equipment; The laser massive transfer & stripping & bonding equipment developed by Maiwei and Tianma has been installed in the Tianma Micro LED production line, and the first products are expected to be lit this year.

"Without the bottleneck of any key equipment, the industry growth of Micro LED will be more autonomous." This is the Micro LED industry in China compared to the OLED industry more "advantage on the one hand." In fact, the investment of OLED 8.6 generation line, in addition to Samsung and Beijing Oriental two pioneers, first anchored the production capacity of Japan and South Korea evaporation machine, LG, Vicino, Tianma and other companies' investment plans, are subject to the "evaporation machine supply" constraints. Similar things do not currently exist in the Micro LED market, which is why the industry is optimistic about the rapid iteration of Micro LED display technology.

However, for the competition of the future display, industry experts also pointed out that this is not a "hammer defeat" battle. On the one hand, technology continues to innovate and improve, and no one can unilaterally guarantee which technology belongs to the future. On the other hand, the diversity of application needs may make the future panel display always a "multi-technology coexistence" pattern.

For example, TCL Huaxing Zhao Jun said in this regard, the future OLED display in a wider application field, a large probability of no way to account for 50% or even higher like mobile phones, may account for 10%-20%, not more than 30%, after all, the cost is high. So, in the short term, the Sino-Korean panel war will compete in the combination of LCD, OLED, and Micro LED technologies. In terms of LCD, Chinese enterprises have established a comprehensive advantage, OLED is achieving a more compact pace of catch-up, Micro LED temporarily leading.