In a
study of what contributes to the success of the display industry, the OLED Association tracked the technology and the source of production from CRTs to LCDs, Plasma, OLEDs and now Micro LEDs. Displays have existed since the mid-20th century, when the delivery of TV signals to consumers were enabled by CRTs. Now displays are omnipresent, used in just about every consumer, commercial and miliary application. They have transitioned from the heavy, bulky, yet small screen TV to a plethora of sizes that range from the equivalent of a contact lens to a wall covering monitor that is constructed in pieces. Over the last 100 years, displays transitioned thru:
On the horizon, are MicroLEDs, with 100s of companies solving technical and manufacturing issues to produce displays that purportedly outperform current technologies. Each advancement was accompanied by a regional shift, first the US produced the majority of CRTs, but as demand increased and color was developed, Japan shared the production volume; second with the advent of active matrix LCDs (AMLCD), Japan became the leader and the US exited the market, third when AMLCDs moved into the larger monitor and TV market, and needed greater investment, the Japanese ceased growing and production leadership shifted to Korea backed up by Taiwan, fourth the Chinese entered the market and invested in the largest size display fabs, taking the production lead and fifth, Samsung anticipating the technology evolution exited AMLCDs by substituting OLEDs. In 2024, display revenue split 62%, AMLCD, 37% OLED and 1% other. Market researchers project future gains for OLEDS and stagnation for AMLCDs.
The US has no production facilities due largely to the huge capital requirement, upwards of $4b per fab and the relatively low return on capital, which has average 1-2% over the last 10 years.
In terms of AMLCD production, China has ~75% share and Taiwan has a 19% share, the remainder is in Japan, which is in the process of closing its display facilities. For AMOLEDs, Korea and China split production evenly. For MicroLEDs, the race is just beginning. The next table shows the regional revenue shares by year
The concentration in regional production source raises the issue of how the US economy and its military readiness will be impacted. Given China's competitiveness should something be done to minimize the US dependency on China's display industry? The world's largest economy needs a robust and competitive display industry and should be encouraging multiple suppliers. For AMLCDs, China's position remains virtually unopposed, and their share is likely to grow as the two Taiwan companies, AUO and Innolux look to change strategies to offset their continued loses, but AMOLED demand and production is increasing, and the US needs to encourage regional competition.
Competition in a particular market has always been a positive for the consumer, and in the case of AMOLEDs, the addition of Chinese panel makers has led to lower costs, by ~30% or more. In terms of technology, Korean manufacturers added foldable displays, thinner devices due to the elimination of the polarizer, and lower power consumption with the use of LTPO, all after the Chinese entered the market. Taking away the availability of a 2nd or 3rd choice would narrow the level of improvement and raise prices.
While the US does not produce displays explicitly, many participate and encapsulation tools with capex per tool in the $500m to $750m range. There are other US companies like EMS (Merck), Kateeva, 3M and DuPont deeply involved in the OLED industry. Reducing the volume or even slowing down the change negatively impacts these and other US companies. Limiting consumer/customer choice to a small number of suppliers would hinder competitive conditions in the United States. Removing a significant supplier's products from the market, risks insufficient supply, increased prices, and decreased innovation, and would likely reduce consumer choice.
In a rapidly evolving technological landscape, it is vital for the U.S. to stay competitive on the global stage. By sourcing display technologies from China and Korea, U.S. companies can focus on their core strengths such as software development, service integration, and innovative applications, rather than spending resources on manufacturing. This strategic allocation of resources allows U.S. firms to maintain their leadership in innovation and technology, positioning them favorably in the global market. In summary, displays are critical to the economy and have a long history of responding to both the technology and the regional production source. The benefits of multiple production sources are well understood and have typically led to positive economic conditions, to the benefit of U.S. consumers, businesses and the government.
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