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Monday, 24 Apr 2017

Korea government to provide subsidies so Korean OLED manufacturers remain competitive

The announcement aims to reduce the impact the increasing oversupply of LCD panels will have on the commercial performance of Samsung and LG Display

25 Apr 2016 | Editor

According to a news report by Korea Times Korea is to offer further subsidies to business projects related to OLED technology, a move aimed at keeping ahead of Chinese competitors amid the continued oversupply in the LCD market.

Since 2013, the Korean government has been slashing subsidies for displays. In 2013, The Ministry of Trade, Industry and Energy (MOTIE) spent 27.6 billion won on research and development (R&D) projects. But the amount was cut to 9.3 billion won this year, raising worries that Korea's leadership in OLEDs will be lost.

The announcement aims to reduce the impact the increasing oversupply of LCD panels will have on the commercial performance of Samsung and LG Display.

Kim Jeong-hwa, director of the electronic component policy bureau at the government agency, said during an industry forum last week, said,
  • "The Ministry of Trade, Industry and Energy (MOTIE) has plans to allocate a new budget on OLED-related projects from next year, at the earliest."
  • "Seoul reached a consensus to lift OLED-related industries as part of a national strategy to expand Korea's long-time lead in the global display industry."
  • "The government doesn't think OLED is just a part of parts as the display could become a turning point that Korean companies can't afford to lose."
  • "The government has praised the continued efforts by the local industries to prepare for next-generation displays such as OLEDs by operating LCD businesses."
  • "OLED is new and hasn't been touched before. If necessary, Seoul will support it; however, related companies should do more and this is the major pre-condition."
Fitch Ratings director Shelley Jang said, "Oversupply is due to production from Chinese companies, which benefit from low-cost capital and receive frequent subsidies from Beijing, urging the two Korean display titans to focus more on OLED applications." Shelly added, "Faster-than-expected adoption of premium products, such as OLED TVs following price cuts, could provide upside to the future performance of Korean display makers."
Han Sang-beom, Korea Display Association Chairman, CEO of LG Display, said recently told "The association had demanded MOTIE spend more on display research projects."

www.lgdisplay.com    www.samsung.com    www.koreatimes.co.kr    www.motie.go.kr    www.fitchratings.com   

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