The long-held dominant position of South Korea’s two liquid crystal display (LCD) manufacturers - Samsung Display Co. and LG Display Co. - has been threatened by Chinese and Taiwanese players bigger now in economy of scale. Market leader LG Display is being closely chased, while Samsung Display slipped to the fifth place, according to global market research firm IHS Wednesday.

LG display maintained the domination position, accounting for 22.7 percent of the LCD market based on January shipments, followed by Innolux Corp. of Taiwan with 16.6 percent. Samsung Display, which lost the second place to the Taiwanese company for the first time last year in annual terms was pushed back to the fifth rank with shipments stopping at 7.02 million units in January for a share of 14.1 percent. BOE China ascended to the third with a 16.4 percent share followed by AUO of Taiwan with 15.7 percent.

Korean panel makers until last year have been unrivalled in large-area displays. But Chinese players emboldened by funding and support from the government have ramped up capacity to threaten Korean and Taiwanese rivals after elbowing out Japanese makers.

From the pace of their expansion, LG may have to fear BOE and other Chinese rivals more than Taiwanese players, industry sources said.

The fall in LCD prices from oversupply and changes in fabrication engineering have eaten up profitability, which could hurt Samsung Display’s first-quarter performance, said Lee Seung-woo, an analyst at IBK Investment Securities. Samsung has been experimenting with two processing means to make the glass substrate thinner, leading to lower yield rates and higher production cost.

Korean companies instead have been shifting focus to organic light-emitting diode (OLED) production that their neighboring rivals lack on expectations for increased application of flexible panels.

By Lee Seung-hoon

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