According to South Korean media reports, Samsung display and LG display are very different in the face of Japan’s restrictions on the export of South Korean parts and materials.

In terms of display, LG can also produce organic light emitting diode (OLED) panels in its overseas factories. However, for Samsung display, if domestic factories stop production, its overseas factories will inevitably be affected by a chain reaction. Samsung’s Korean factories use the front-end process of Japanese parts and materials, while its overseas factories are responsible for the back-end process.

LG display will begin mass production of OLED panels for large TVs in Guangzhou, China in August

In addition, LG display will start mass production of OLED panels for large-scale TV in Guangzhou, China in August. The Guangzhou plant implements the front-end process including deposition packaging, while the company’s plant in Vietnam is responsible for the back-end process, including lamination and assembly. Therefore, LG display is not expected to be subject to export restrictions from Japan because the whole production process is completed in factories in China and Vietnam. “All etching gases used in the production of large OLED panels are provided by Chinese companies,” said an LG display official. “We do not use Japanese etching gases, so we are not affected by Japanese export restrictions.”

LG’s domestic factories in Korea, such as those in Paju and Gumi in Korea, use etching gas from Japan, but because the production lines of their domestic and overseas factories are completely separated, it can prevent losses from chain reaction.

At present, LG display is better than Samsung display, but LG display has also been trying to prevent any damage to export regulations. Industry experts said that the Guangzhou plant, which has begun the countdown to production, may increase its panel production earlier than originally planned. In addition, LG shows that it is considering replacing Japanese etching gas with Chinese products.

On the other hand, Samsung’s situation is not very good. Samsung shows that the front-end process is completed in A3 line in South Korea, and the back-end process is carried out in V3 plant in Vietnam and Tianjin plant in China. It is said that the company’s factories producing small and medium-sized OLED panels use Japanese polyimide. If the Japanese government’s restrictions are extended, they will hit domestic factories. “At present, there is no Samsung factory in Korea to produce finished OLED panels. All panels are eventually produced in overseas factories,” said a Samsung display official.

Japan controls 90% of the global polyimide supply and basically monopolizes the global polyimide market. Therefore, it is difficult to replace Japanese imports with Korean products.

“It may be difficult to find domestic and foreign companies that can replace Japanese products,” said an industry official. Therefore, if Samsung shows that it will take a long time to find new suppliers or replace imported products from Japan with products made in Korea, it will have no choice but to modify its OLED supply plan for enterprise customers.

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