Successful mode
The success models of many Korean companies are very similar. In addition to Samsung, these companies include LG, Posco and Hyundai Heavy Industries. These companies have had a big impact in the past 10 years and are now getting rid of the image of past losers and building a leading edge in technology and market.
LG is eyeing the TV market that can play online video, while Hyundai plans to introduce hybrid vehicles in a global environment where environmental protection is important. In recent years, Samsung has invested heavily in high-end technologies, including flat-panel TVs and mobile phone displays. In the process of replacing analog technology with digital broadcasting technology, Samsung has made great returns to investments in industries such as semiconductors, mobile phones and liquid crystal displays. However, Samsung has realized that it must continue to innovate in order to stay ahead in the industry.
Samsung is currently working on high-end display technologies such as organic light-emitting diode (OLED) displays. OLED displays use organic materials to illuminate the display to provide backlighting, so power consumption is smaller than traditional LCD screens. In addition, the image quality and response speed of OLED displays are also better than traditional LCD screens.
The world's leading
Samsung Electronics and its sister company Samsung SDI jointly established Samsung Mobile Display, which is currently leading the global mobile OLED display market with a market share of 95%. The Samsung Galaxy S smartphone, as well as HTC's Droid Incredible and Evo 4G, all use OLED displays.
However, Samsung's goal is to enable OLED technology to be applied to larger displays, such as tablets and televisions, the latter being an attractive market. The main obstacle at present is that large-sized OLED displays are expensive and have technical problems in production. Earlier this year, Sony had abandoned its OLED TV business in its home market, mainly due to the market's low demand for such high-priced products and high manufacturing costs.
However, Samsung hopes to make a return on investment in OLED displays. If Samsung can produce OLED TVs on a large scale, the profits will be much higher than the current LCD TVs. The latter currently has a market share of more than 50% in the global TV market. However, with the rapid decline in prices, the profit margin of the LCD TV business is shrinking.
Large screen device
Li Wuzhong, vice president of Samsung Mobile Display, said that Samsung is "the only company that has succeeded in mass production of active matrix OLED displays." He said: "Considering the advantages, we expect OLED TV to receive positive feedback from the market."
In the process of promoting the commercial use of OLED technology, Samsung will face the strong challenge of LG. A number of companies under the LG Group acquired Kodak's OLED business in December last year. LG Display said in April that it will invest $223 million to expand its OLED production line. The company currently produces displays for smartphones and handheld devices and will target the OLED TV market in the second half of 2011.
Champ Shin, vice president of strategy and marketing at LG Display, said that OLED display shipments will take seven to eight years to grow to the current LCD level. However, he expects consumer demand for OLED displays to start rising in 2013, when the price gap between OLED TVs and LCD TVs will shrink to about 30%.
Government subsidies
In order to ensure Korea's leading position in display technology, the Korean government is also actively involved in this industry. In May of this year, the South Korean government announced a five-year plan to invest approximately $18.5 billion in its next-generation LCD and large-screen OLED display device and component manufacturers.
Korean companies are mainly facing competition from companies in Japan and Taiwan. For example, Sony is still developing more commercially competitive OLED TVs, and AU Optronics of Taiwan is also planning to mass-produce OLED displays for mobile devices in 2011, while developing OLED displays for TVs and tablets.
Li Wuzhong said: "In the LCD market, we quickly caught up and become a leader. However, active matrix OLED is a technology completely different from liquid crystal. Since no company has succeeded in this field, It is also difficult to be a leader."
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