The situations of Samsung and LG are completely different: How can they save themselves in the future?

Faced with Japan's restrictions on the export of parts and materials to South Korea, the situations of Samsung Display and LG Display are completely different.

As for LG Display, it can also produce organic light-emitting diode (OLED) panels at its overseas factories. However, for Samsung Display, if domestic factories stop production, its overseas factories will inevitably be affected by the chain reaction. Samsung Display's Korean factories use Japanese parts and materials for the front-end process, while its overseas factories are responsible for the back-end process.

In addition, LG Display will start mass production of OLED panels for large TVs at its Guangzhou plant in China in August. The Guangzhou plant implements front-end processes including deposition and encapsulation, while the company's plant in Vietnam is responsible for back-end processes, including lamination and assembly. Therefore, LG Display is not expected to be subject to Japan's export restrictions because the entire production process is completed at factories in China and Vietnam. "All etching gases used in the production process of large OLED panels are provided by Chinese companies," said an LG Display official. "We do not use etching gases from Japan, so we are not affected by Japan's export restrictions."

LG Display's domestic factories, such as those in Paju and Gumi, South Korea, use etching gases from Japan, but since the production lines at its domestic and overseas factories are completely separated, it can prevent a chain reaction of losses.

At present, LG Display's situation seems to be better than Samsung Display, but LG Display has also been trying to prevent any damage from export regulations. Industry experts said that the Guangzhou plant, which has already started the countdown for production, may increase its panel production earlier than originally planned. In addition, LG Display is considering replacing Japanese etching gas with Chinese products.

On the other hand, Samsung Display is not in a good situation. Samsung Display's front-end process is completed at the A3 Line in South Korea, and the back-end process is carried out at the V3 plant in Vietnam and the Tianjin plant in China. The company's factories that produce small and medium-sized OLED panels are said to use Japanese polyimide. If the Japanese government's restrictions are extended, they will deal a blow to domestic factories. "Currently, there are no Samsung factories in South Korea that produce finished OLED panels. All panels are ultimately produced in overseas factories." A Samsung Display official said.

Japan controls 90% of the global polyimide supply and basically monopolizes the global polyimide market. Therefore, it is difficult to replace Japanese imports with Korean products.

"It may be difficult to find domestic and foreign companies that can replace Japanese products," said an industry official. Therefore, if Samsung Display takes a long time to find new suppliers or replace Japanese imports with Korean-made products, it will have no choice but to revise its OLED supply plan for corporate customers.