Driven by localization of supply chain, OLED market share in Chinese Mainland exceeded 50%
Sep 26,2024
In September of this year, when Honor CEO Zhao Ming took the stage in Berlin to release the latest model, there was a main thread that connected all of the company's flagship devices together: OLED screens. The display screen using organic light-emitting diodes (OLEDs) not only has clearer images, but also has a thinner and lighter device design, higher energy efficiency, and greater flexibility.
Honor's market share in the Western European foldable screen smartphone market has surpassed Samsung's. Honor claims that its Magic V3 smartphone, with a thickness of only 9.3 millimeters, is the thinnest and lightest foldable screen smartphone in the world. Zhao Ming stated that the foldable screen of this phone can be folded over 500000 times, and its brightness and scratch resistance are superior to high-end iPhones and Samsung phones.
Honor tablets and laptops, including the company's first AI computer, are also equipped with OLED screens. According to industry executives, Glory mainly purchases displays from suppliers in Chinese Mainland such as BOE and Hehui Optronics.
This purchase marks the latest victory of display manufacturers in Chinese Mainland. In the field of traditional liquid crystal display (LCD) used in computer monitors and televisions, display manufacturers in Chinese Mainland have already surpassed their competitors in Japan, South Korea and Taiwan, China in terms of output and price.
According to the Washington Information Technology Innovation Foundation (ITIF), display manufacturers in Chinese Mainland currently account for more than 70% of the global LCD production capacity. As more and more companies are squeezed out of the market, this share will continue to rise.
Omdia data shows that in the LCD field, as of 2023, BOE, TCL CSOT and Huike (HKC) in Chinese Mainland control more than 57% of the global market. This is in stark contrast to 2011, when Samsung Display and LG Display jointly held about 55% of the market share. Samsung will eventually exit the LCD manufacturing industry in 2022, while LG Display's share last year was only 6%.
Chinese Mainland suppliers have also played a leading role in manufacturing many LCD materials. For example, Sugimoto Optoelectronics and Hengmei Optoelectronics have become the world's top two polarizer suppliers, surpassing Sumitomo Chemical and Nitto Denko from Japan. Samsung SDI has decided to sell its polarizer business to Wuxi Hengmei Optoelectronic Materials Co., Ltd. in Chinese Mainland.
A similar story is unfolding in the OLED field. According to market research firm Omdia, just five years ago, South Korean display leaders Samsung Display and LG Display held nearly 90% of the smartphone OLED screen market share. But as of this year, the total share of these two companies has dropped to less than 60%, while the share of display screen manufacturers in Chinese Mainland, led by BOE, has soared to more than 40%. ITIF estimates that the market share of OLED manufacturers in Chinese Mainland has now exceeded 50%.
David Hsieh, Senior Research Director of Omdia Display, said: "Samsung Display is adjusting its OLED strategy to focus on the best customers, that is, to serve Samsung itself and Apple. Samsung's display manufacturing is unlikely to compete with its competitors in Chinese Mainland in terms of price, while Xiaomi, OPPO, vivo and other manufacturers of mobile phones and electronic products in Chinese Mainland are unlikely to turn to foreign suppliers once they have local solutions."
According to Omdia, the price of OLED smart phone display screen produced by Samsung is about $80 to $100, while the price of display screen manufacturers in Chinese Mainland is about $30 to $40, but the quality may not be that high.
An executive of a company that provides equipment for Samsung and BOE said that in order to make up for the high frequency of production defects, OLED manufacturers in Chinese Mainland usually send a batch of free displays in each order. "This business model will help manufacturers to maintain the profit margin of smart phones to a large extent, so why don't manufacturers choose to use OLED in Chinese Mainland?"
OLED display screens are the most expensive component in consumer electronics, with costs surpassing CPUs (central processing units) in devices such as smartphones and computers. OLED displays have made significant progress in the field of smartphones, and now more and more electronic product manufacturers are considering applying them to large devices such as tablets and laptops.
The rapid rise of OLED display industry in Chinese Mainland is partly due to the government's efforts to localize the technology supply chain. OPPO, vivo, and Xiaomi have also started using local suppliers to produce OLED displays.
Although the United States has implemented several rounds of export controls on semiconductor technology to curb technological progress in Chinese Mainland, it shows that technology is basically unaffected. However, according to industry executives, escalating bilateral tensions have prompted Chinese Mainland to make efforts to localize the entire supply chain.
A senior executive from an industry supplier said, "Faced with the challenge of purchasing the most advanced semiconductors, Chinese enterprises are actively focusing on enhancing other components within their capabilities, including using excellent display screens and higher specification cameras and lenses to attract customers
The market share of Chinese Mainland in the field of display screen manufacturing is expanding, which helps Chinese Mainland to form a strong supply chain and enable domestic enterprises to provide necessary materials for OLED production. Local companies such as Changchun Haipu Runsi, Shaanxi Laite Optoelectronics Materials, and Guangdong Agraya Optoelectronics Materials are seizing market share from established foreign competitors such as Solus Advanced Materials, Duksan Neolux, Merck, and DuPont.
The promotion of localization also provides an excellent opportunity for OLED suppliers in Chinese Mainland to improve their technical capabilities.
The manager of an American display equipment supplier said: "According to internal prediction, the OLED technology gap between South Korea and Chinese Mainland (manufacturers) is about one or two years. It is only a matter of time before Chinese Mainland completely dominates the OLED industry."
An executive in the display industry in Taiwan, China, China, said: "The display market is really cruel and always faces fierce competition. Japan and Taiwan, China do not have powerful and large-scale TV, computer and smartphone brands to support this industry. Another problem is that Chinese Mainland display manufacturers do not really care about profits when promoting market share."
An executive of Merck, the main manufacturer of chips and display materials, said that compared with semiconductor manufacturing, display manufacturing is more "modular", which helps Chinese Mainland grasp this field relatively quickly.
Unlike chip manufacturing, which involves complex processes and numerous variables, display manufacturing is a more standardized and commercialized industry. Each stage of the production process can be seen as an independent module, making it easier to manage and optimize, "said the executive.
At present, Chinese Mainland occupies a leading position in the LCD field and is expanding its OLED display capacity.
BOE is building the first "8.6 generation" OLED production line in Chinese Mainland. The production line is planned to be put into operation in 2026. Other Chinese Mainland companies, such as Vicino, are also considering building similar production lines, despite their financial problems. Outside Chinese Mainland, only Samsung continues to invest in the production of advanced displays in this way.
In the display industry, larger "generations" typically provide higher efficiency for producing screens of various sizes. Most existing OLED production lines use the 6th generation. But the cost of investing in OLED displays may be twice that of investing in LCD screens with the same production capacity.
This year, when Apple began using OLED screens on its highest end iPad Pro, OLED sparked a craze. Apple has been using OLED screens throughout its high-end iPhone lineup since 2020, and is considering using OLED screens in more iPads and even MacBooks from 2025 onwards. This iPhone manufacturer will also adopt OLED screens in its economy iPhone SE starting next year, completing the transition from LCD screens.
The increase in OLED penetration has put pressure on LCD suppliers, especially manufacturers in Japan and Taiwan, China. Sharp of Japan decided to close Sakai LCD factory this year, while Youda Optoelectronics and Qunzhuang Optoelectronics recently sold the display factory located in Taiwan, China, China.
There is also pressure on equipment and materials. KLA announced in March that it will cease production of flat panel display manufacturing equipment after Apple ends its research and development of cutting-edge micro LED displays. According to sources, this American equipment manufacturer anticipates that the entire display industry will become increasingly commercialized and profit margins will become increasingly thin.
Eric Chiou, Vice President of Research at Trendforce, stated that OLED displays will eventually enter the field of tablets and laptops, and the adoption speed of brands such as Apple will set the tone for the industry.
He said that many display manufacturers in Chinese Mainland benefited from Chinese Mainland becoming the leading force of LCD, but now these powerful manufacturers are staring at the prospect of OLED spending competition.
Eric Chiou said: "The competition in the domestic market of Chinese Mainland is very fierce, and a new round of survival competition is coming.
Honor's market share in the Western European foldable screen smartphone market has surpassed Samsung's. Honor claims that its Magic V3 smartphone, with a thickness of only 9.3 millimeters, is the thinnest and lightest foldable screen smartphone in the world. Zhao Ming stated that the foldable screen of this phone can be folded over 500000 times, and its brightness and scratch resistance are superior to high-end iPhones and Samsung phones.
Honor tablets and laptops, including the company's first AI computer, are also equipped with OLED screens. According to industry executives, Glory mainly purchases displays from suppliers in Chinese Mainland such as BOE and Hehui Optronics.
This purchase marks the latest victory of display manufacturers in Chinese Mainland. In the field of traditional liquid crystal display (LCD) used in computer monitors and televisions, display manufacturers in Chinese Mainland have already surpassed their competitors in Japan, South Korea and Taiwan, China in terms of output and price.
According to the Washington Information Technology Innovation Foundation (ITIF), display manufacturers in Chinese Mainland currently account for more than 70% of the global LCD production capacity. As more and more companies are squeezed out of the market, this share will continue to rise.
Omdia data shows that in the LCD field, as of 2023, BOE, TCL CSOT and Huike (HKC) in Chinese Mainland control more than 57% of the global market. This is in stark contrast to 2011, when Samsung Display and LG Display jointly held about 55% of the market share. Samsung will eventually exit the LCD manufacturing industry in 2022, while LG Display's share last year was only 6%.
Chinese Mainland suppliers have also played a leading role in manufacturing many LCD materials. For example, Sugimoto Optoelectronics and Hengmei Optoelectronics have become the world's top two polarizer suppliers, surpassing Sumitomo Chemical and Nitto Denko from Japan. Samsung SDI has decided to sell its polarizer business to Wuxi Hengmei Optoelectronic Materials Co., Ltd. in Chinese Mainland.
A similar story is unfolding in the OLED field. According to market research firm Omdia, just five years ago, South Korean display leaders Samsung Display and LG Display held nearly 90% of the smartphone OLED screen market share. But as of this year, the total share of these two companies has dropped to less than 60%, while the share of display screen manufacturers in Chinese Mainland, led by BOE, has soared to more than 40%. ITIF estimates that the market share of OLED manufacturers in Chinese Mainland has now exceeded 50%.
David Hsieh, Senior Research Director of Omdia Display, said: "Samsung Display is adjusting its OLED strategy to focus on the best customers, that is, to serve Samsung itself and Apple. Samsung's display manufacturing is unlikely to compete with its competitors in Chinese Mainland in terms of price, while Xiaomi, OPPO, vivo and other manufacturers of mobile phones and electronic products in Chinese Mainland are unlikely to turn to foreign suppliers once they have local solutions."
According to Omdia, the price of OLED smart phone display screen produced by Samsung is about $80 to $100, while the price of display screen manufacturers in Chinese Mainland is about $30 to $40, but the quality may not be that high.
An executive of a company that provides equipment for Samsung and BOE said that in order to make up for the high frequency of production defects, OLED manufacturers in Chinese Mainland usually send a batch of free displays in each order. "This business model will help manufacturers to maintain the profit margin of smart phones to a large extent, so why don't manufacturers choose to use OLED in Chinese Mainland?"
OLED display screens are the most expensive component in consumer electronics, with costs surpassing CPUs (central processing units) in devices such as smartphones and computers. OLED displays have made significant progress in the field of smartphones, and now more and more electronic product manufacturers are considering applying them to large devices such as tablets and laptops.
The rapid rise of OLED display industry in Chinese Mainland is partly due to the government's efforts to localize the technology supply chain. OPPO, vivo, and Xiaomi have also started using local suppliers to produce OLED displays.
Although the United States has implemented several rounds of export controls on semiconductor technology to curb technological progress in Chinese Mainland, it shows that technology is basically unaffected. However, according to industry executives, escalating bilateral tensions have prompted Chinese Mainland to make efforts to localize the entire supply chain.
A senior executive from an industry supplier said, "Faced with the challenge of purchasing the most advanced semiconductors, Chinese enterprises are actively focusing on enhancing other components within their capabilities, including using excellent display screens and higher specification cameras and lenses to attract customers
The market share of Chinese Mainland in the field of display screen manufacturing is expanding, which helps Chinese Mainland to form a strong supply chain and enable domestic enterprises to provide necessary materials for OLED production. Local companies such as Changchun Haipu Runsi, Shaanxi Laite Optoelectronics Materials, and Guangdong Agraya Optoelectronics Materials are seizing market share from established foreign competitors such as Solus Advanced Materials, Duksan Neolux, Merck, and DuPont.
The promotion of localization also provides an excellent opportunity for OLED suppliers in Chinese Mainland to improve their technical capabilities.
The manager of an American display equipment supplier said: "According to internal prediction, the OLED technology gap between South Korea and Chinese Mainland (manufacturers) is about one or two years. It is only a matter of time before Chinese Mainland completely dominates the OLED industry."
An executive in the display industry in Taiwan, China, China, said: "The display market is really cruel and always faces fierce competition. Japan and Taiwan, China do not have powerful and large-scale TV, computer and smartphone brands to support this industry. Another problem is that Chinese Mainland display manufacturers do not really care about profits when promoting market share."
An executive of Merck, the main manufacturer of chips and display materials, said that compared with semiconductor manufacturing, display manufacturing is more "modular", which helps Chinese Mainland grasp this field relatively quickly.
Unlike chip manufacturing, which involves complex processes and numerous variables, display manufacturing is a more standardized and commercialized industry. Each stage of the production process can be seen as an independent module, making it easier to manage and optimize, "said the executive.
At present, Chinese Mainland occupies a leading position in the LCD field and is expanding its OLED display capacity.
BOE is building the first "8.6 generation" OLED production line in Chinese Mainland. The production line is planned to be put into operation in 2026. Other Chinese Mainland companies, such as Vicino, are also considering building similar production lines, despite their financial problems. Outside Chinese Mainland, only Samsung continues to invest in the production of advanced displays in this way.
In the display industry, larger "generations" typically provide higher efficiency for producing screens of various sizes. Most existing OLED production lines use the 6th generation. But the cost of investing in OLED displays may be twice that of investing in LCD screens with the same production capacity.
This year, when Apple began using OLED screens on its highest end iPad Pro, OLED sparked a craze. Apple has been using OLED screens throughout its high-end iPhone lineup since 2020, and is considering using OLED screens in more iPads and even MacBooks from 2025 onwards. This iPhone manufacturer will also adopt OLED screens in its economy iPhone SE starting next year, completing the transition from LCD screens.
The increase in OLED penetration has put pressure on LCD suppliers, especially manufacturers in Japan and Taiwan, China. Sharp of Japan decided to close Sakai LCD factory this year, while Youda Optoelectronics and Qunzhuang Optoelectronics recently sold the display factory located in Taiwan, China, China.
There is also pressure on equipment and materials. KLA announced in March that it will cease production of flat panel display manufacturing equipment after Apple ends its research and development of cutting-edge micro LED displays. According to sources, this American equipment manufacturer anticipates that the entire display industry will become increasingly commercialized and profit margins will become increasingly thin.
Eric Chiou, Vice President of Research at Trendforce, stated that OLED displays will eventually enter the field of tablets and laptops, and the adoption speed of brands such as Apple will set the tone for the industry.
He said that many display manufacturers in Chinese Mainland benefited from Chinese Mainland becoming the leading force of LCD, but now these powerful manufacturers are staring at the prospect of OLED spending competition.
Eric Chiou said: "The competition in the domestic market of Chinese Mainland is very fierce, and a new round of survival competition is coming.