China Expected to Secure 70% of iPhone 15 Displays
Concerns Over Repeating 'LCD Nightmare'
"Display Supply Chain Restructuring Is a Matter of Time"
[Asia Economy Reporter Han Yeju] The domestic display industry has been put on alert. China, which has dominated the liquid crystal display (LCD) market with its formidable financial power and low-cost volume offensive, is expanding its territory into the small organic light-emitting diode (OLED) panel market. There are even forecasts that China could take the lead in the small OLED market in about three years. Domestic companies now face the challenge of diligently formulating defense strategies against China.
Recently, foreign media cited Guo Mingqi, a Taiwanese analyst known as an Apple expert, who predicted that BOE, a Chinese company, could supply 70% of the panels for the basic and Plus models of the 'iPhone 15' series to be released in the second half of this year. Samsung Display, which accounted for 70% of the iPhone 14 panels, is expected to see its supply share plummet to around 30%. Additionally, there are observations that BOE could secure 20-30% of the orders for Apple's next-generation 'iPhone 16' low-temperature polycrystalline oxide (LTPO) panels in 2024. LTPO OLED is a high value-added component requiring advanced technology, and Apple currently uses LTPO OLED panels with enhanced power efficiency only in its premium Pro lineup.
Apple is one of the largest customers in the small OLED display market. Currently, Samsung Display holds the largest share of display supply for iPhones. If BOE receives 70% of the iPhone 15 panels and then 20-30% of the iPhone 16 panels as Guo Mingqi predicts, it could surpass Samsung Display and LG Display to become Apple's largest display supplier.
This is why concerns are emerging that a situation similar to the LCD market being overtaken by Chinese companies could be repeated in the OLED market. Analysts warn that the strategy of securing market share through low-cost volume offensives and then catching up with leading companies through strong financial backing could happen again.
In fact, Chinese companies including BOE are making their presence felt in the global display market, which was led by Samsung and LG Display. According to market research firm UBI Research, as of the second quarter of last year, Samsung Display held a 38.2% share in the small OLED display market, ranking first, while BOE ranked second with 20.5%. LG Display maintains its lead in large OLEDs mainly used for TVs.
Domestic companies maintain that they will compete through technological gaps, but they cannot hide their anxiety that the 'LCD nightmare' could be repeated. Chinese companies are still not competitive in the flexible and foldable OLED sectors used in premium smartphones. Therefore, domestic companies are focusing on developing next-generation technologies such as transparent OLED, mini light-emitting diodes (LED), and quantum dots (QD).
However, the view that the reorganization of the display supply chain is only a matter of time is gaining traction. Due to global inflation and decreased demand, domestic companies are lowering factory operating rates and reducing investments, but the Chinese government is actively supporting its domestic companies across all stages of the display industry. Global market research firm DSCC also forecasts that China could secure a 47% share of the OLED market by 2025, putting it within sight of South Korea's 51%.
An industry insider said, "China provides subsidies at the national level for everything from building display infrastructure to equipment investment and panel production, and even offers support funds if there are losses. Although we currently maintain a technological gap with China, without government support, even this cannot be guaranteed."
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