When Honor Device CEO George Zhao took the stage in Berlin in September to unveil the Chinese smartphone maker’s latest models, one thread united all of the company’s flagship devices: OLED screens.
Displays using OLED, or organic light-emitting diodes, not only boast crisper images, they also make slimmer device designs possible, along with better energy efficiency and higher flexibility. The new trifold Mate XT smartphone that Huawei Technologies, Honor’s former parent, unveiled in September to acclaim showed off the bendability of OLED screens.
For its part, Honor, whose share of the Western European foldable phone market has overtaken Samsung’s—touted its Magic V3 smartphone, just 9.3 millimeters thick, as the world’s thinnest and lightest foldable smartphone. According to Zhao, it can be folded more than 500,000 times and offers better brightness and scratch resistance than premium iPhones and Samsung phones.
Honor tablets and laptops, including the company’s first artificial intelligence computer, also come with OLED screens. Honor sources its displays primarily from Chinese suppliers such as BOE Technology Group and Everdisplay Optronics, according to industry executives.
This purchasing marks the latest victory for China’s display makers, who long ago overtook Japanese, South Korean and Taiwanese rivals in the traditional liquid crystal displays (LCDs) used in computer monitors and TVs in terms of both production volumes and prices.
Chinese display makers today account for more than 70% of global LCD production capacity, according to the Washington-based Information Technology and Innovation Foundation (ITIF). That share is set to rise as more players are edged out of the market.
A similar story is playing out in OLEDs. Just five years ago, South Korean display leaders Samsung Display and LG Display held nearly 90% of the market for smartphone OLED screens, data from market research agency Omdia shows. As of this year, however, their combined share has sunk to less than 60%, while that of Chinese display manufacturers, led by national champion BOE, has surged to over 40%. ITIF estimates the market share of Chinese OLED makers now exceeds 50%.
“Samsung Display is pivoting its OLED strategy to focus on the most premium clients, namely to serve Samsung itself and Apple,” said David Hsieh, senior research director for displays at Omdia. “It’s not likely that Samsung’s display making could compete with Chinese rivals on price, and it’s not likely that Chinese handset and electronics makers such as Huawei, Xiaomi, Oppo [and] Vivo will again turn to foreign suppliers once they have local solutions.”
An OLED smartphone display made by Samsung costs around USD 80–100, according to Omdia, while Chinese display makers can offer them for USD 30–40 apiece, though the quality might not be as high.
An executive at a company that supplies equipment to Samsung and BOE said that to compensate for the greater frequency of production defects, Chinese OLED makers also usually include a batch of free displays with each order. “This business model would largely help you to maintain your smartphone margin, so why wouldn’t you choose to use the Chinese OLEDs?”
OLED displays are the most expensive component in consumer electronics, surpassing the cost of central processors in devices like smartphones and computers. They have made significant inroads into smartphones, and now more electronics makers are considering them for larger devices, including tablets and laptop computers.
Part of the driving force behind the rapid rise of the Chinese OLED display industry is Beijing’s push to localize tech supply chains. Huawei uses OLEDs in the majority of its devices, including the Mate XT, which sources say contains screens mainly from BOE.
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Huawei was also one of the first in the industry to use OLEDs in tablets and laptops. Oppo, Vivo, and Xiaomi have each followed suit and begun using local suppliers for OLED displays.
While the US has imposed multiple rounds of export controls on semiconductor technologies to curb China’s tech advancement, display technologies have been largely unaffected. But escalating bilateral tensions have accelerated China’s efforts to localize its entire supply chain, according to industry executives.
“Facing challenges in buying the most advanced semiconductors, Huawei is aggressively focusing on enhancing other components within its reach,” an executive with an industry supplier said. “This includes incorporating superior displays and higher-specification cameras and lenses to attract customers.”
Expanding its market share in display manufacturing has helped China to foster a robust supply chain, enabling domestic players to provide essential materials for OLED production. Local players like Changchun Hyperions Technology, Shaanxi Lighte Optoelectronics Material, and Guangdong Aglaia Optoelectronic Materials are gaining market share at the expense of established foreign rivals such as Solus Advanced Materials, Duksan Neolux, Merck, and DuPont.
The localization push is also giving Chinese OLED suppliers a great opportunity to improve their technological capabilities.
“Based on our internal forecast, the technological gap of OLED technologies between South Korean and Chinese [manufacturers] is around a year or two,” said a manager with a US-based display equipment supplier. “Chinese display suppliers have poached too many South Korean engineers. It is only a matter of time before the Chinese fully dominate the OLED industry.”
In more traditional LCD displays, China’s BOE, TCL China Star Optoelectronics Technology and HKC controlled more than 57% of the global market as of 2023, according to Omdia data. That is a sharp contrast to 2011, when Samsung and LG Display of South Korea together held about 55% of the market. Samsung finally exited LCD making in 2022, while LG Display had a share of only 6% last year.
Chinese suppliers are also already dominant in many of the materials used for making LCDs. For instance, Shanjin Optoelectronics and Hengmei Optoelectronics have become the world’s top two suppliers of polarizers, overtaking Japanese peers Sumitomo Chemical and Nitto Denko. Samsung SDI has decided to sell its polarizing film business to China’s Wuxi Hengxin Optoelectronic Materials.
“The display market is really cruel and always faces fierce competition,” said a Taiwanese display industry executive. “Japan and Taiwan do not have enough strong and large-scale TV, computer and smartphone brands to support the industry. Another issue is Chinese display players don’t really care about profit when they are advancing market share.”
An executive from Merck, a key chip and display material maker, said display making is more “modularized” than semiconductor manufacturing, which has helped China master the segment relatively quickly.
“Unlike chipmaking, which involves complex processes and numerous variables, display manufacturing is a more standardized and commoditized industry. Each stage of the production process can be considered a discrete module, making it easier to manage and optimize,” the executive said.
Now dominant in LCDs, China is on the course to expand its OLED display capacity.
BOE is constructing the country’s first production line for what are called “8.6-generation” OLEDs. It is scheduled to begin operations in 2026. Other Chinese companies, like Visonix, are considering building similar lines, though they face financial challenges. Outside China, only Samsung continues to invest in advanced display production in this way.
In the display industry, larger generations generally offer better efficiency for producing various screen sizes. Most existing OLED production lines are based on the 6-generation format. But investing in OLED displays can be twice as expensive as investing in comparable capacity for LCD screens.
The OLED frenzy kicked up a notch when Apple started using the screens in its most premium iPads this year. The company began using them for its entire premium iPhone lineup in 2020, and is considering deploying them in more iPads and even MacBooks from 2025, as Nikkei Asia first reported. The iPhone maker is also putting OLEDs in its budget iPhone SE starting next year, completing a shift away from LCD screens.
The rising penetration of OLED has weighed on LCD suppliers, particularly Japanese and Taiwanese makers. Japan’s Sharp this year decided to shut its Sakai LCD plant, while AUO and Innolux recently sold off display plants in Taiwan.
The pressure extends to the equipment and materials side. KLA said in March that it would halt production of equipment for flat-panel display manufacturing after Apple ended its R&D into cutting-edge micro LED displays. The American equipment maker foresaw the overall display industry becoming increasingly commoditized, with thinner and thinner profit margins, sources said.
But the Chinese display industry faces its own struggles amid overcapacity issues and slowing economic momentum locally and globally.
Visionox has reported three consecutive years of net losses since 2021, while Everdisplay Optronics has not turned a profit since it began reporting earnings in 2018. Many Chinese companies are relying on government subsidies and funding to stay afloat.
Eric Chiou, research vice president at Trendforce, said OLED displays will eventually reach tablets and laptop computers, with the pace of adoption by brands like Apple setting the tone for the industry.
As for China, he said, the country faces a dilemma. Many of its display makers reaped the benefit of the country becoming the dominant force in LCDs, but now these strong players are staring at the prospect of a spending race in OLED.
“The competition in China’s domestic market is ferocious,” Chiou said. “Another round of the survival race is coming up.”
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.