Korean displays may benefit from Trump's tariff on Chinese products

Apple iPhone 16 smartphones are displayed at a store in London, Oct. 6, 2024. Reuters-Yonhap By Nam Hyun-woo As U.

S. President-elect Donald Trump set to wield tougher economic measures against China, an optimistic outlook is emerging that Korean display makers may benefit from hefty tariffs on products exported by their Chinese rivals. According to data from the Korea Display Industry Association, Korea's market share in the global display market stood at 33.



4 percent in 2023, trailing China's 47.9 percent. Since losing the top spot to China in 2021, the gap between the two countries has been widening due to the rise of Chinese firms.

Since Chinese display makers took the lead in the LCD market, Korean firms have quickly lowered their reliance on LCDs and focused on OLEDs, as their technologies are still years ahead of their Chinese rivals. However, the gap between the two countries in OLEDs is also narrowing quickly as Huawei, Xiaomi, Oppo and other Chinese smartphone makers increasingly use displays manufactured by their compatriots. According to data from market tracker Omdia, Chinese firms accounted for 49.

7 percent of global OLED shipments in the first quarter of this year, surpassing Korean firms, which held a 49 percent share. In the first quarter of last year, Korean and Chinese companies held market shares of 62.3 percent and 36.

6 percent, respectively, maintaining a 25.7 percentage point gap. However, this gap was completely reversed within just a year.

Visitors look around Samsung Display's OLED products at Samsung OLED IT Summit 2024 in Taipei, Taiwan, Oct. 15. Courtesy of Samsung Display Trump's pledge to impose a 60 percent tariff on Chinese imports and a 10 to 20 percent tariff on goods from other regions is offering some relief to Korean display makers.

"The OLED competition largely hinges on Apple's devices, as the U.S. tech giant continues seeking ways to lower its costs by using panels from (China's) BOE," an industry official said.

"If the tariffs are realized, companies like Samsung Display or LG Display could secure price competitiveness over BOE." As part of its efforts to improve cost efficiency, Apple selected BOE and LG Display as the suppliers for the iPhone SE4, and industry officials said there are chances that BOE panels may be used for the main iPhone series. With no major U.

S. competitors existing for Samsung Display and LG Display, hefty tariffs or other restrictions against BOE may prompt Apple to reconsider adding the Chinese vendor to its supply chain, possibly changing its supplier for the iPhone SE4 panels. Along with Trump's economic policies, the Republicans' sweeping victory in the U.

S. House is also a positive signal for the Korean display makers. An LG Display official touches the company's stretchable display at a showcasing event in Seoul, Nov.

8. Courtesy of LG Display On Sept. 24, John Moolenaar, chairman of the U.

S. House Select Committee on the Chinese Communist Party, urged the Pentagon to blacklist Chinese LCD and OLED makers, specifying BOE. Moolenaar won his reelection in Michigan.

"In LCD, the industry's legacy technology, the Chinese share of global production capacity has grown from zero percent in 2004 to 72 percent today, and non-PRC manufacturers are rapidly exiting the market due to their inability to compete," Moolenaar wrote in the letter to Defense Secretary Lloyd Austin. "A similar evolution is now underway in OLED, the current generation of display technology; Chinese share of global production capacity has grown from 1 percent in 2014 to 51 percent today." Industry officials estimate that if this restriction is realized in the Trump administration, it may emulate the case of Huawei.

In 2019, Huawei delivered 241 million smartphones, but that number plummeted to 4.3 million in 2021 after Trump signed an executive order in May 2019 to block Chinese telecommunications companies and then-Secretary of Commerce Wilbur Ross placed Huawei on a blacklist. The general outlook for the Korean display makers is positive in the second Trump administration, but their lack of manufacturing presence on U.

S. soil is viewed as a looming risk. After scaling down its manufacturing facilities in China, Samsung Display is relying heavily on its Vietnamese plant for assembly processes, investing 2.

4 trillion won ($1.72 billion) into the plant. LG Display also reportedly won local approvals recently for adding $1 billion to its investment into its plant in Hai Phong, Vietnam.

.