South Korean companies are shrinking their LCD panel business, and their OLED business will be surpassed by my country in 2024

Under the low-price offensive from Chinese mainland panel manufacturers, LG Chem recently decided to sell its LCD polarizer business to Chinese mainland materials manufacturer Shanshan.

Samsung Display and LG Display are also reportedly reducing their staff or disposing of equipment to shrink their LCD panel businesses. This industry, which has been a core industry in South Korea for nearly 20 years since the late 1990s, seems to be gradually becoming history.

LG Chem recently announced that it will conditionally sell its LCD polarizer business to Shanshan in China for $1.1 billion. LG Chem and Shanshan will establish a joint venture, with shareholding ratios of 30% and 70% respectively. After LG Chem's LCD polarizer business is incorporated into the joint venture, Shanshan will also acquire 100% of the shares in stages. However, LG Chem also chose to retain businesses such as automotive LCD polarizers.

Research firm Omdia predicts that the global market size of OLED TVs, which will only remain at 3 million units in 2019, may increase to 9.51 million units by 2024.

On the other hand, Samsung Display has also decided that the production of large LCD panels will only continue until the end of the year. It also plans to sell off the 8.5-generation LCD panel factory in Suzhou, China, in which the company holds a 60% stake, and accept applications from employees in the R&D and production departments to transfer to other companies, some of whom will also join Samsung SDI, which produces batteries and energy storage systems (ESS) for electric vehicles (EVs).

As for LG Display, after the 8th generation plant in Paju, South Korea, stopped producing TV panels last year, the 7th generation plant is also planned to operate until the end of this year. The equipment of the large LCD panel production line of the 8th generation plant that is currently being stopped is also planned to be sold to manufacturers in mainland China.

An insider from LG Display revealed that LCD panels for TVs will only be produced overseas from next year. The panel production line in Paju will only be used for the production of computer monitors and laptop panels, and for the production of such high value-added products.

This is also because the profits of Korean panel manufacturers have deteriorated due to the low-price offensive of Chinese mainland manufacturers such as BOE and CSOT.

According to Omdia's survey data, Chinese mainland enterprises accounted for 40.4% of the global market share of large LCD panels larger than 9 inches last year, far higher than South Korea's 23.9%, Taiwan's 31.1%, and Japan's 4.6%. It is estimated that in 2 to 3 years, Chinese mainland enterprises will account for as much as 60% of the world market share in this industry.

DSCC also pointed out that the smartphone OLED panels produced in China are likely to surpass those produced in South Korea in 2024. It also believes that it is only a matter of time before China surpasses South Korea in the overall OLED panel market, including that for TVs.