In recent years, there has been a significant shift in the display screen sector of the Chinese smartphone market. Previously, 80% of Chinese smartphones used organic light-emitting diode (OLED) panels produced by Korean companies. However, this number has plummeted to less than 20%, indicating a sharp decline in market share for Korean companies and showcasing China's success in promoting the use of domestically produced components.
According to the report by the Korean newspaper "Hankyoreh," data provided by the Korea Display Industry Association shows that the proportion of Chinese smartphone manufacturers using OLED panels from the Korean company dropped sharply to 16% last year. In contrast, this proportion was 77.9% in 2021, decreased to 55.6% in 2022, and then fell to the current low point.
Nevertheless, American and Japanese smartphone companies still heavily rely on Korean OLED panels. Last year, 82.3% of products from American smartphone companies, including Apple, used Korean OLED panels. As for Japanese smartphones, all of them (100%) are equipped with Korean OLED screens.
However, the noticeable decrease in the use of Korean OLED in Chinese smartphones is striking. The Korea Display Industry Association attributes this decline to China's trend of "patriotic consumption." In 2015, China launched the "Made in China 2025" strategy aimed at enhancing self-sufficiency in key industries. The goal was to achieve 40% self-sufficiency by 2020 and 70% by 2025.
As a result, major Chinese smartphone companies like Xiaomi, Vivo, OPPO, and Honor have started equipping their new products with domestically produced OLED panels, increasing the usage of Chinese-manufactured components. With the active production efforts of Chinese phone manufacturers, the shipment volume of Chinese OLED panels has increased from 100 million units in 2021 to 139.9 million units in 2022, and further to 244.4 million units in 2023. The gap in OLED production capacity between Korea and China is gradually widening.
Furthermore, China is narrowing the gap with Korea in small and medium-sized OLED production capacity. In 2022, Korea dominated almost the entire market share of large and medium-sized OLED panels (mainly used for TVs and IT devices) at 96.1%. However, in the small and medium-sized OLED market primarily used for mobile devices, Korea holds 71.6% while China holds 27.6%. China is gradually increasing its share in the small and medium-sized OLED sector, catching up with Korea.
In the more complex and high-end Low-Temperature Polycrystalline Oxide (LTPO) panels primarily used in high-end smartphones, Korean companies shipped 152.9 million units last year, far exceeding China's 35.3 million units. The Korea Display Industry Association predicts that as OLED usage expands from mobile devices and TVs to tablets and vehicles, OLED's share in the total display market will reach a record 36.6% this year, driving market growth.
The Korea Display Industry Association forecasts that the global display market size will grow by 13.0% from last year, reaching $133.3 billion. OLED is expected to grow by 15.1%, reaching $48.8 billion, while LCD is projected to grow by 11.5%, reaching $83 billion.
