South Korea that has long been the world’s largest liquid crystal display (LCD) TV panel producer is ready to yield to rank this year to China that expanded fast in economies of scale backed by government support, capital, and borrowed brainpower.

The title change also comes as Korean display makers shift development and production focus to more lucrative organic light-emitting diode (OLED) and next-generation display technologies to gracefully pull out of from the over-competitive LCD market.

According to a report released by Taiwan-based global LCD market research firm WitsView on Tuesday, China’s LCD TV panel production for 2017 is forecast to make up 35.7 percent in the entire global output, up 5.6 percentage points from 30.1 percent a year ago. In contrast, Korea’s supply is expected to lose 5.3 percentage points, almost equivalent to the share China would add, to 28.8 percent from 34.1 percent last year.

It would be their first retreat from the global top position since Korean panel giants Samsung Display Co. and LG Display Co. began their LCD TV panel production. Staring this year, they will likely see steady fall in their share in the market, industry experts warned. “China has aggressively increased its investment in the TV LCD industry for years so the turnabout has been anticipated,” said an unnamed official in the local LCD industry. “The gap between Korea and China would widen.”

China’s biggest display maker BOE has been the most aggressive in expanding its large LCD panel production. It aims to begin to produce panels from its 10.5 generation fabs in its Hefei factory, which would be the largest LCD production site in the world, next year and is also building another 10.5 generation line in Wuhan by 2020. Its rival company China Star Optoelectronics Technology (CSOT) is also adding 10.5 generation panel lines.

By 2020, China is expected to account for about half of the global large LCD panel production with its share surpassing 40 percent in 2018 and reaching 48.3 percent in 2020, WitsView said. Taking into account Taiwan’s 23.9 percent share, total 72.2 percent of large LCD panels will be supplied from the Greater China region by 2020.

In contrast, Korean manufacturers that have been hesitant to invest in large LCD panels in Gen 10 or above have decided to stop running some of their LCD production lines, a move that is expected to accelerate China’s ascent in the LCD panel industry.

Samsung Display already shut down its L5 lines in Cheonan, South Chungcheong Province, and plans to close L6 next month. The L5 and L6 lines had rolled out low-priced LCD panels for laptops and desktops, the segment that Chinese rivals have already overtaken. LG Display also announced last month that it would shut down its P2, P3 and P4 production lines in Gumi, North Gyeongsang Province.

By Song Sung-hoon and Lee Dong-in

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]