An End to the Monopoly? Chinese Panel Makers Take on Samsung and LG in the LCD Industry
UBI Research CEO Choong Hoon Yi claims that Chinese display panel manufacturers’ monopoly on the liquid crystal display (LCD) industry poses a long-term threat to Samsung and LG’s TV businesses.
In an interview published on Tuesday, Yi told The Elec that although the dominance of Chinese firms in the LCD industry is often seen as a danger to South Korea’s display panel industries, the greater threat is posed by the set manufacturers. The CEO predicted that if the TV divisions of Samsung and LG were to fail, it would have a domino effect on other sectors of the value chain, including the display panel industry.
Last year, Samsung Display left the LCD sector, and this year, LG Display stopped making LCDs in South Korea but is keeping up manufacturing in Guangzhou, China. LG Display’s China factory, however, has had its output cut in half and will likely be sold in the future.
Chinese Display Industries Hopes to Gain Traction By Merging Together
Yi said that the Chinese government has a strategy to consolidate the country’s display market into three firms, and there are indicators that this plan is gaining momentum. He predicts that HKC would be merging with IVO, and that BOE’s OLED division may be merged with Visionox and gets sold off. The rest of the manufacturers of display panels will be able to stabilize their pricing and return to profitability if the government facilitates a merger of this kind.
Getting enough TV panels would be tough for Samsung and LG, according to Yi, because of these major display panel producers. This will open the door for new TV manufacturers to compete with Samsung and LG. This is a positive development toward introducing much-needed innovation to the sector, but it may have unintended consequences if the sector’s dominant companies were to suddenly disappear.
Yi said that this might pose a challenge to Samsung and LG’s volume share, despite the fact that they would continue to report larger revenues than their Chinese equivalent owing to their dominance of the high-end TV market.
In recent years, stories about China’s progress and possible global supremacy have gained popularity, and this is especially worrisome in light of the current USD-Yuan events. It seems that a domino effect has been set in motion, which will lead to China becoming the world leader in a wide range of sectors.
