[Opinion] K-Display Must Not Miss the Timing for Government Support

Kim Sung-jin, Executive Vice President of Korea Display Industry Association

Although Korea maintains its position as the world’s number one in the display market, the future remains uncertain. The only product that Korea has held the world’s top spot in for 14 consecutive years as a single item is LCD (Liquid Crystal Display). Over 14 years, LCD exports worth 320 trillion won have been made to countries worldwide, making it a representative product that contributed to the development of Korea’s electronics industry and national economy. However, since China overtook Korea in 2018, China now leads the global LCD market, and the gap has widened further. It is a time that calls for drastic measures.

While analyzing the reasons why Korea had no choice but to lose the LCD market to China is important, strategic insights can also be gained by examining the precedent of Japan, which succeeded in commercializing LCD first in the world but eventually saw the collapse of its display industry. Looking solely at the LCD market, Korea is currently following in Japan’s footsteps.

In the late 1990s, as Japan hesitated to make new investments in 5th-generation LCDs due to the economic crisis spreading across Asia, Korea made the world’s first investment in 5th-generation LCDs in 2001 and rose to the top of the global LCD market in 2004. Since then, Korea has maintained its number one position through new investments in 6th, 7th, and 8th-generation LCDs. However, Korea stopped making new investments after the 8th-generation LCD. In contrast, China, backed by massive government support, made the world’s first new investment in 10.5-generation LCDs in 2015 and surged to become the world’s number one LCD market in 2018. The first lesson we can learn from the cases of Japan and China is that "early investment in next-generation fields determines the future competitiveness of the display industry."

Having lost competitiveness in the display industry, the Japanese government introduced many support policies such as mergers and acquisitions and financial aid to make a comeback. To secure LCD competitiveness, about 2 trillion won was invested in 2012 to establish JDI (Japan Display), which integrated the LCD businesses of Sony, Toshiba, and Hitachi. In 2015, the government led the establishment of JOLED, a specialized OLED (Organic Light Emitting Display) company, to enter the next-generation OLED market. Although the Japanese government expected to improve competitiveness through corporate consolidation and financial support, the display industry in Japan collapsed despite government aid after competitiveness had already declined. The second lesson here is that "no matter how much government support is provided after industrial competitiveness has declined, it is ineffective."

The implications of the first and second lessons are that proactive corporate investment and timely government support must go hand in hand. Currently, Korean companies plan large-scale investments in QD and OLED fields to secure leadership in the next-generation market. The government is also considering expanding R&D and facility investment support by establishing core strategic technologies following the enactment of the Semiconductor Special Act.

The display industry should be included as a core strategic technology to receive strong government support. This year, the global display market is expected to reach $157.3 billion, the largest since the birth of the display industry. With the spread of IoT, AI, and autonomous driving technologies at the center of the 4th Industrial Revolution and the activation of the non-face-to-face economy due to the impact of COVID-19, the role of displays in future society is becoming increasingly important. Now is a golden opportunity for Korea’s display industry to make a quantum jump. To avoid following the LCD path, full national support for next-generation display investments is necessary.