#United States #La Jolla #OLED Displays #Display Industry #Regional Competition

The Importance of Regional Competition in the Display Industry

The display industry has witnessed massive transformations over the past century, moving from bulky CRTs to sophisticated MicroLEDs. The OLED Association recently conducted a study to explore the factors contributing to the sector's success, emphasizing the significance of regional competition. This article delves into the evolution of displays and the pressing need to encourage competition, especially against the backdrop of the current market dynamics.

Display technology has come a long way, starting with CRTs, which dominated the market in the mid-20th century, to the advent of newer technologies such as LCDs, Plasma, and LEDs. With every technological advancement, the display landscape transitioned significantly:

• - CRTs were the primary technology until the late 1990s.
• - The 1990s to early 2000s saw a rise in Plasma technology, which eventually waned.
• - LCDs became popular toward the late 1990s and have remained prevalent to this day.
• - OLED technology emerged around 2005 and continues to evolve, with MicroLEDs now on the horizon.

The shift in production hubs is notable. Initially, the U.S. dominated CRT manufacturing. As technology evolved and demand surged, production migrated to Japan, which led the active matrix LCD (AMLCD) market until competition shifted toward Korea and subsequently to China. Today, the Chinese market accounts for around 75% of AMLCD production, while the transition to OLEDs has seen Korea and China share production evenly. The display revenue breakdown illustrates this transformation, with AMLCDs still leading but OLEDs steadily gaining market share.

The Need for Regional Competition

In light of increasing competition from China, the U.S. must adapt its strategies to support regional competition in the display industry. The current reality stipulates that while the U.S. is not producing displays directly, it is crucial to encourage a plethora of suppliers. The benefits of multiple production sources are manifold; they enhance consumer choices, drive down costs, and foster innovation.
For example, the influx of Chinese panel makers in the AMOLED market has led to significant reductions in costs, promoting advancements such as foldable displays and improved energy efficiency thanks to technologies like LTPO. Without these competitive dynamics, advancements could stall or lead to price escalations, limiting consumer access to innovation.

The inherent value of having diverse suppliers cannot be overstated. It not only ensures stability amid potential supply chain disruptions but also fuels technological growth. For instance, the U.S. companies involved in the display supply chain, including those specializing in encapsulation tools and OLED materials, stand to benefit from these competitive market conditions.
Furthermore, U.S. firms can concentrate on their core competencies like software and services while relying on foreign production capabilities, allowing them to maintain their technological edge in the global arena.

Strategic Implications for the U.S.

With China's grasp on display technology continuing to expand, there is an urgent need for a U.S. policy that promotes local innovation and competition. Trade relationships with countries like China not only facilitate access to affordable electronics but also bolster diplomatic and economic ties. These relationships foster collaborations in various sectors, enhancing opportunities for job creation within the U.S.
Increasing access to competitive, low-cost products can help stimulate the U.S. economy by redirecting savings into other vital sectors such as technology and digital service offerings. Protecting and promoting competition within the AMOLED space, for instance, is crucial, as these developments directly impact consumer lifestyles.

Conclusion

The study by the OLED Association highlights the critical role regional competition plays in the display industry. It acts as a catalyst for innovation, provides consumers with increased choices, and ensures that the U.S. does not fall behind in the global marketplace. For the display technology sector to thrive, it is essential to recognize these dynamics and implement strategies that embrace a multifaceted approach to production. Regional competition should be seen not just as a necessity but as an imperative for a robust and sustainable future for the display industry and its contribution to the U.S. economy.