The Korea Display Industry Association (KDIA) said that due to the supply chain crisis, key display equipment manufacturers in South Korea, such as Zhouxing Engineering, Wonik IPS, Sunic System, and other companies, will all suffer from parts shortages. Delayed deliveries, will affect companies such as LG Display.
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According to KEDGLOBAL, insiders said that the core components of OLED panels need to wait for more than 6 months after receiving an order, while it only took 2-3 months in the past. Filters that used to be delivered in 2.5 months now have to wait about a year.
KEDGLOBAL said Korean display equipment makers’ heavy reliance on foreign components has exacerbated losses from parts shortages and delayed deliveries by display equipment makers will disrupt the expansion of facilities at panel makers such as LG Display.
A report by the Korea Display Industry Association shows that in 2021, only 9% of the components in the display equipment industry will be manufactured locally in South Korea, while most components need to be imported overseas. Components come from Japan and 19% from Europe. This heavy reliance on foreign components makes South Korea’s display equipment industry more vulnerable to disruptions in global supply chains.
Moreover, some parts of display equipment manufacturers usually need to be replaced every 6 to 12 months. For equipment manufacturers, a stable supply of parts is crucial, because they are also responsible for replacing parts, etc. After-sales service.
The Korea Display Industry Association has set up a body to promote cooperation between device makers and component makers, and about 40 device and component makers currently plan to join the body. Regardless of the global supply chain situation, South Korea needs to improve the competitiveness of local components to reduce damage to the display industry, an official from the Korea Display Industry Association said.
But KEDGLOBAL said that South Korean display equipment makers lacked the technology and ability to cope with global supply disruptions by producing parts, and even some equipment makers were having to buy used parts from China at more than double the price.
Global sales for South Korean display equipment makers shrank to $233 million last year, just one-tenth of the $2.3 billion in 2020, according to market research firm Omdia. By comparison, China’s global sales are $10.5 billion.
