The panels, which form pictures using a thin, bendable layer of organic light-emitting diodes, had been cutting-edge technology when trouble first began brewing between the two companies in 2012.
But the market has changed dramatically since then, and South Korean industry insiders worry that Samsung and LG wasted precious time and resources, raising the possibility China will eventually take over in OLEDs like it did with liquid crystal displays (LCDs).
The Supreme Court of Korea today upheld a ruling acquitting four Samsung Display employees and a chief executive at a LG Display supplier of stealing trade secrets, ending the last outstanding legal battle between the two companies.
Prosecutors had alleged the five individuals illicitly obtained LG’s encapsulation technology for sealing OLEDs. The five originally received a suspended sentence. But they were cleared in an appeal, on grounds that the information was also available from academic papers and reference materials for Japanese suppliers, and therefore did not qualify as a trade secret.
Both Samsung Display and LG Display declined to comment on the Supreme Court ruling.
This was just one of many legal battles Samsung and LG have waged over OLED panels. Three years ago, the top court upheld convictions over technology leaked from Samsung Display to LG Display. They also sued each other over patents, with at least four cases going to court.
The feud first began in 2012, when LG Display executives were charged with stealing technology from Samsung Display. The companies kept up the drama by holding competing news conferences accusing each other of theft.
Both companies were driven by the need to “convince consumers that they had superior technology” in the budding OLED market, an industry insider said.
But their drawn-out battle came with the cost of allowing their Chinese rivals to get ahead. Over 100 South Korean display engineers have moved to China in search of better paying positions. Dozens are working to set up a mass production line at BOE Technology Group’s OLED factory in China, a source familiar with the matter said.
The technological gap between South Korean and Chinese players is only shrinking. BOE began full-scale panel shipments to Apple in 2021. It aims to expand smartphone panel shipments by 70% this year to 100 million units, and is considering building a new factory in the city of Chengdu.
TCL China Star Optoelectronics Technology, or CSOT, has also decided to expand capacity at its OLED plant in Wuhan.
OLEDs were first commercialised by Pioneer in 1997, and Sony launched its first OLED TV in 2007. But Japan’s leading electronics companies later exited the business, and South Korean players took control.
Samsung controlled 59.3% of the global OLED market in 2021, according to the US-based Display Supply Chain Consultants. LG Display followed with 23%, then BOE with 8.7%. Chinese players expanded their market share by three points last year.
Buoyed by government subsidies, Chinese companies have succeeded in gaining control over nearly half the global market for LCDs in 10 years. They now greatly outpace their South Korean and Taiwanese rivals, which hold around a 20% share each. South Korean industry insiders worry that the same thing will happen with OLEDs.
Samsung and LG are exploring new partnerships in response to the growing competition. Samsung Display has faced delays in developing OLED panels for TVs, and is now in negotiations to supply them from LG Display instead.
Top executives from both companies confirmed the talks in January. But they have yet to reach an agreement. Several suppliers said negotiations had halted due to disagreements over price. Some believe their legal dispute stood in the way as well.
Experts believe that if South Korea loses ground to China on OLEDs, semiconductors will be next. Chips have emerged as a focal point in the rivalry between the US and China, as well as for economic security, and many in the industry are closely watching the competition between South Korean and Chinese players in OLED displays.