Invest KOREA

A display panel is an image displaying device (panel) that shows various information on a screen for people to see, and plays the role of the eye of the industry.

Korea has maintained the world's top position in the display industry for seventeen years since 2004, and most notably in the field of OLED acknowledged as the next generation display, Korea leads the world with a global market share of 81.3% (2022).

Based on continuous R&D, Korea is leading OLED technology by introducing the world's first rollerable TV and foldable OLED. Korea's OLED production technology is three to five years ahead of its competitors, and while some small and medium-sized OLEDs are produced by competitors, Korea is the exclusive producer of large OLEDs.

In the 1990s, display panels were mainly produced by four countries in Northeast Asia (Korea, China, Japan, and Taiwan), starting with Japan's investment in LCDs. In recent years, however, Korea and China have emerged as major producers.

Korea is proactively responding to new demand markets such as virtual reality, automotive, aircraft, architecture, medical, and interior by developing not only variable displays with no design restrictions such as foldable, rollable, and stretchable displays, but also transparent OLEDs and 3D displays such as holograms.

After successfully mass-producing the world's first quantum dot (QD) display product in 2021, Korea is striving to develop next-generation technologies such as micro LEDs and micro displays for AR and VR while refining OLED technologies.

Korea plans to invest KRW 62 trillion by 2026 in large-scale OLEDs and QD.

The Korean display industry has an organic industrial ecosystem linking the nation's major panel producers (e.g., Samsung Display and LG Display) and manufacturers of materials, parts and equipment and is also known for its export-oriented global supply chain.

The industry consists of two panel manufacturers leading large-scale facility investment and about 1,290 small and medium-sized enterprises producing materials, parts and equipment.

The advancement of panel technology raised the localization rate of small and medium-sized enterprises to 65%, with companies from the United States, Japan, and EU countries supplying key materials and equipment used in panel manufacturing.

As the country makes more OLED investment, domestic production of displays reached KRW 76.3 trillion or 4.3% of GDP (in 2021), total exports reached USD 21.1 billion or 3.1% of national exports (in 2022), and facility investment and employment accounted for 12.4% (in 2022) and 2.1% (in 2021) of the manufacturing industry, respectively to support Korea's economic growth.

The growth of Korean panel companies since 2000 has attracted many foreign companies to enter Korea especially in the fields of parts, materials and equipment as the domestic base is still weak.

The Korean government is providing various types of support, including a tax credit for R&D expenses in the display field and for facility investment.

More specifically, the government designated five technologies, including OLED, quantum dot (QD), micro LED panel technology, and related minor technologies, as national strategic technologies in 2022, allowing corporate tax deduction of 15% for large and medium-sized enterprises and 25% for small and medium-sized enterprises when they invest in facilities. Moreover, companies whose 2023 investment exceed the average investment in the previous three years are eligible for an additional deduction of 10% of the difference.

Investment in R&D and facilities related to seven designated technologies and facilities, including AMOLED, micro LED, and QD (Quantum Dot), will receive a tax credit. As related materials, parts, and equipment as well as panels are subject to the tax credit, many small and medium-sized enterprises are utilizing this system.

The Korean government is operating a quota tariff system to strengthen industrial competitiveness and facilitate the supply and demand of goods. The quota tariff is a flexible tariff system that can be applied temporarily by reducing the rate within the range of 40%p to the basic tariff rate for price stability and smooth supply and demand. Items subject to tariff quota are selected through a demand survey every six months or one year. The display industry is also receiving quota tariff support for manufacturing equipment, materials, and parts necessary for panel production.

Whereas quota tariffs were applied to imported manufacturing equipment in the past, the recent inclusion of display manufacturing equipment in the expanded ITA agreement resulted in quota tariffs applied to materials rather than manufacturing equipment.

In 2023, reducers were designated to be eligible for the quota tariff, which means they can be imported duty-free.

In Korea, display panels are mostly produced in clusters in Asan, Chungnam, where Samsung Display is located, and in Paju, Gyeonggi, where LG Display is located. Asan and Tangjeong in Chungnam have excellent R&D capabilities enjoying the support from local governments such as display centers and the presence of more than ten universities. In addition, KTX stations provide quick access to various regions, and Pyeongtaek Port located 30 kilometers away help reduce logistics costs for imports and exports.