China's display offensive is fierce, Samsung and LG have made structural adjustments

In response to the fierce offensive of Chinese display companies, the conflicts between South Korean display companies LG Display and Samsung Display have gradually cooled down recently and each has carried out structural adjustments.

According to Korean media "DDaily", market research company DSCC has calculated the global display productivity (CAPA) this year, and China accounts for 46%, almost twice that of South Korea (24%). As of 2016, South Korea (35%) was ahead of China (29%), but since being surpassed by China in 2017, the gap between China and South Korea has been widening.

In the field of LCD (liquid crystal display), Chinese companies have adopted a low-price offensive, making Korean companies gradually lose their competitiveness. According to a survey by the Korea Economic Research Institute, Korea's market share in LCD this year is 32%, and China (33%) has taken over the leading position by a small margin. On the other hand, although Korean companies are still ahead of China in the field of OLED, Chinese companies are also accelerating to catch up with Korea. Chinese companies such as BOE, Visionox, and HKC have recently announced that they will invest in the OLED field with a capital scale of more than 15 trillion won.

Due to LG Display's poor performance, the company began to carry out intensive structural adjustments, reducing labor costs through voluntary retirement and layoffs. LG Display Vice Chairman Han Sang-beom expressed his intention to resign due to the deteriorating business situation.

It is generally believed that LG Display's revenue in the third quarter will be lower than the market forecast. LG Display's third quarter revenue forecast is 6.1292 trillion won, operating loss is 255.8 billion won, and operating loss in 2019 will reach 1.45 trillion won.

On the other hand, Samsung Electronics has also begun to allow some production and office staff to apply for voluntary retirement. The Asan plant in Chungnam, which originally produced LCD panels, has also decided to reduce production.

Overall, both companies are affected by Chinese companies, but the difference is that Samsung Display's market share in the small and medium-sized OLED field has dropped to around 80%, but it is still far ahead of the industry. In addition, Samsung Display is a major supplier of foldable displays. In addition to the LCD business, Samsung Display still has many advantages.

In addition, Samsung Display plans to invest 13.2 trillion won to build a QD OLED production line, setting a record for the highest single display investment by a Korean company. LG Display is trying to drive the large OLED display market, but the implementation is not as easy as planned. People in the display industry said that both companies are undergoing organizational restructuring, but Samsung Electronics has many weapons in hand and is less likely to withstand pressure.