[Asia Economy Reporter Jeong Hyunjin] Chinese display manufacturer BOE is rapidly enhancing its organic light-emitting diode (OLED) technology and expanding its presence in the market. Having crossed the threshold of Apple, which was previously penetrated only by domestic display companies such as Samsung and LG, BOE is now threatening Korean companies in the OLED market following its dominance in the liquid crystal display (LCD) market.
According to Japan's Nikkei on the 16th, BOE began shipping 6.1-inch OLED panels for Apple's new smartphone, the iPhone 13, starting last month. After initially supplying a small quantity of OLED panels, BOE plans to expand shipments following Apple's final performance inspections. Previously, BOE supplied OLED panels to Apple only for limited purposes such as replacement panels, but this is the first time it is making a large-scale supply.
Nikkei reported that with this development, the supply of 6.1-inch OLED panels for the iPhone 13 will be shared between Samsung Electronics and BOE. As BOE begins full-scale shipments, Samsung's share will decrease accordingly. BOE plans to increase its supply ratio from an initial 20% to 40% in the future.
Apple is diversifying its supply chain by receiving displays not only from Samsung Electronics and LG Display but also from BOE. This could potentially impact domestic display companies. Apple is also considering introducing OLED panels in new iPads and may fully adopt OLED technology around 2023.
The growth of Chinese display companies centered on BOE poses a significant threat to the domestic display industry. This is because Korean companies have already experienced losing market dominance to Chinese display companies in the LCD market since 2017. In particular, BOE has rapidly grown since 2010 with government subsidies exceeding 2 trillion won. Considering this, concerns are rising that Chinese companies will quickly catch up in the OLED market as well.
According to market research firm DSCC, LG Display and Samsung Display currently hold an advantage over Chinese companies in the OLED market, but China's growth rate is rapid. Looking at the compound annual growth rate (CAGR) from 2020 to 2025, Samsung Display and LG Display are estimated at 12% and 19%, respectively, while China's BOE and CSOT are projected at 25% and 52%, respectively, indicating they will significantly surpass Korean companies.
BOE currently operates large-scale OLED production plants based in Chengdu and Mianyang in Sichuan Province, and is expected to expand supply to Apple and others by mass-producing OLED panels in Chongqing. However, despite the ongoing severe power shortages in China, BOE's factories appear to have no power issues. Nikkei evaluated that this could still pose a challenge for Chinese companies aiming to enter Apple's supply chain.
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