Patent trolls are jumping into the patent wars related with organic light emitting diodes (OLEDs) as the global OELD display market is growing rapidly.
The growth of the OLED market is being led by South Korean display companies. LG Display Co. announced in July a plan to make an additional investment of 3 trillion won (US$2.53 billion) in its 10.5-generatino OLED production lines in Paju. Samsung Display Co. also said on Oct. 10 it would invest 13.10 trillion won (US$11.05 billion) to produce large-size OLED panels.
The share of LG Display’s OLED business in its total sales is expected to increase from 13 percent in 2018 to 49 percent in 2024, while that of Samsung Display will rise from 73 percent to 93 percent over the same period, according to market research firm IHS Markit.
Chinese display firms are also hot on the trail. HKC Co. has recently announced a plan to set up its large OLED panel production plant for the first time in the Chinese industry, expanding its investment in not only small and medium-sized but also large OLED panels.
After Apple Inc, the largest customer of display producers, recently expanded its use of OLED panels, global television manufacturers are also adopting OLED panels.
With the rapid growth of the OLED panel market, U.S.-based luminescent material producer Universal Display Corp. (USD), which ranked first with more than a 20 percent share of the global market, saw its sales in the second quarter surpass the market estimates by a whopping 49.8 percent.
this means that the number of prey has increased for patent trolls.
Solas OLED Ltd., which filed a patent suit against Samsung Display and LG Display, has bought up OLED panel related patents from U.S. semiconductor firm Atmel Corp. and Japan-based Casio to be prepared for its assault. The company has also brought a patent litigation against a number of companies that use OLED panels, such as Samsung Electronics Co., LG Electronics Inc., Apple, Sony Corp., Google LLC and Dell Technologies Inc.
The legal action by patent trolls places a huge burden on South Korean display producers which are accelerating a shift to OLED panels. LG Display is having difficulty raising funds to invest in next-generation displays as its performance has been worsening.
Chinese companies are more and more chasing after South Korean companies. They have already overtaken South Korean firms in the liquid crystal display (LCD) panel market and are now expanding their investment in OLED panels. For smartphones, Samsung Display still has over 80 percent of market share but Chinese firms are showing clear signs of growth every quarter.
Samsung Electronics’ share of the smartphone OLED market in terms of sales dropped to 82 percent in the second quarter from 86.4 percent at the previous quarter, while LG Electronics saw its share decrease from 3 percent to 2.2 percent, according to IHS Markit. On the other hand, China’s BOE showed its market share growth from 8.5 percent to 11.5 percent and other Chinese companies, such as Everdisplay Optronics Co., Visionox Technology Inc. and Tianma Micro-Electronics Co., raised their market share. In addition, Apple is currently testing OLED panels produced by Chinese firms, including BOE, to receive the supply.
Competition between South Korean and Chinese display producers is forecast to become more intense in the smartphone OLED market in the future. In particular, LG Display had been the only one to produce large OLED panels for televisions but Chinese firms are entering the market in earnest. China’s HKC recently announced that it has invested a total of 5.40 trillion won (US$4.56 billion) and started construction of its 8.6-generation large OLED production line in Changsha city, Hunan province. This is the first large OLED investment made by a Chinese display firm. The production plant is scheduled to be completed in early 2021. South Korean display manufacturers have a long and winding road ahead.