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Samsung and LG unite against China
Insights from Korea JoongAng Daily, Gizmochina, and Wccftech
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South Korean rivals LG and Samsung are joining forces to build displays to compete against cheaper Chinese alternatives, the Financial Times reported.
After dominating the market for cheaper LCD technology, highly-subsidized state-owned Chinese firms like BOE are undermining South Korea’s superiority in higher-end OLED displays, which Beijing hopes to lure tech giants like Apple with. China’s rapid catch up forced Samsung to close its last panel factory there in 2021, and the company said it will now rely on LG’s China facility to produce panels for it.
State-backed Chinese firms could soon beat South Korean ones to lead global OLED production, but they have been accused of stealing Korean technology information to get ahead.
SIGNALS
South Korea concerned about China allegedly stealing its tech and engineers
The reason for China’s catch up is the “shady” way it has gained Korea’s proprietary technology and engineers, Korea JoongAng Daily argued. Korean courts found top executives of a local company guilty of leaking confidential information from Samsung Display’s edge panel to China’s state-owned BOE, and Samsung has also sued BOE for trade secret misappropriation, the paper reported. Chinese companies’ focus on mobile phone OLED displays has paid off and fueled by state funds, “there is no way Korea can outrun China,” in the market, one analyst said. But despite Beijing’s aggressive foray into the OLED market, it mostly focuses on small mobile panel displays, whereas Korea still holds on to its dominance in the sales of OLED television screens.
China could lose out on Apple’s OLED panel business
Apple’s upcoming budget-friendly iPhone SE 4 is switching from an LCD to an OLED screen, and Samsung and China’s BOE are reportedly the top two contenders for display producers, according to Gizmochina. While OLED screens are more expensive than LCD screens, Apple is betting that competition between Samsung and BOE will drive down price tags: Samsung is now reportedly now the cheapest contender offering $30 per unit, compared to BOE’s bid of $35 per unit, according to Gizmochina. BOE has also lost favor with Apple after it “failed to deliver production” of OLED panels for the iPhone15 up to Apple’s standards, tech publication Wccftech reported. Samsung stepped in to take over much of the production, and its “efficiency poses a threat to BOE,” according to Wccftech.
China’s EV push makes rival European carmakers consider teaming up
Beijing’s momentous push in electric vehicle (EV) production also has competing automakers considering consolidation. The CEO of Stellantis last week said European automakers face a “bloodbath” if they don’t adapt to keep up with Chinese EVs. Renault’s CEO has proposed teaming up with Stellantis and Volkswagen to form the “Airbus of Autos” — a reference to the decades-long efforts by European countries to collectively create a viable competitor to Boeing. The idea that European carmakers are floating such alliances “feels inconceivable,” InsideEvs editor-in-chief Patrick George wrote. They all had expectations of successful EV transitions, but have been plagued with similar problems like buggy software and EU emission regulations.
