In A Pool Of Display Sharks, China Is The New Apex Predator

Guest Post: Chris Riegel, STRATACACHE

When I first saw this picture, I knew it reminded me of something, but I just couldn’t put my finger on it.

Chris Riegel

In our industry, the past 10 years of visual display manufacturing have been dominated by the big Korean manufacturers, Samsung and LG.  Through a combination of brains, muscle, money and tactics that would make a Lannister blush, the Koreans all but eliminated the Japanese from relevance in the large format LCD display business that they invented.  Sony, Sharp, NEC, Toshiba, et al, were reduced to mere shadows of their former selves as the Korean war machine marched on.

As the display market has grown by orders of magnitude, Samsung and LG made tens of billions in profits, grew in power and influence globally and sat nearly unopposed at the height of their power.

This success was noticed around the world, but nowhere more intensely than in Beijing.

The problem with being King is that everyone desires the throne.  In the past five years, in dozens of trips to China, I have personally witnessed the gathering storm headed for Seoul.  When Xi Jinping and the Chinese central planners realized the opportunity in visual display and its strategic importance to mobile, entertainment, transportation and dozens of other key industries, they set about putting the full force and power of the Chinese industrial juggernaut at that target.

In the past three years, BOE has risen from obscurity to become the largest display manufacturer in the world, blowing past Samsung and LG as if they were standing still, and more than doubling global LCD output capacity as display fabs spring up all across China.

The Chinese understand that if they capture a significant position in the display business, they can leverage this capability across multiple market segments for success.  They also understand that they can dramatically lower the cost for display systems and open up new scale markets to grow top line.

This strategy is now starting to be seen in the financial results of the players.  While Samsung reports a Q4 drop of 10%, Huawei jumps 21% as they take massive market share in mobility from Samsung in the emerging market segment, based on fully integrated Chinese display and mobile platforms.

As LG (wisely) pivots from LCD to OLED to try and stay one step ahead of the global LCD glut that’s about to hammer the market in 2020 and beyond, the landscape continues to change dramatically, as the crown shifts to a new King.

We’re seeing a flood of resumes coming in globally from product and salespeople looking for their next digital signage/display  industry gig. Reality appears to be setting in for the people who’ve been riding the Korean wave for many years.

For all of us who swim in this ocean, there is a new apex predator about, and I am excited to see the future.