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Japan plays key support role in hot OLED display market

Demand for panel materials, production equipment keeping manufacturers busy

OLED TVs on display at Bic Camera, a large electronics store in Tokyo

TOKYO -- As South Korea and China dominate the production of next-generation OLED display panels, Japan is carving out its own niche as a support player in the booming market.

Organic light-emitting diode display panels are rapidly becoming ubiquitous, with makers of flat-screen televisions and smartphones scrambling to adopt them in 2017. The market is projected to grow to around 3 trillion yen ($27.1 billion).

Among the Japanese companies cashing in on the trend is Idemitsu Kosan, which supplies materials used to produce panels, and Canon Tokki, which leads the market for panel manufacturing equipment.

Mitsubishi Chemical is another player, aggressively pursuing production of a material used in panels for TVs. Earlier in August, the company set up a marketing team specializing in OLED display panels at its Kurosaki Plant in the southern Japanese city of Kitakyushu.

The team, which will comprise 20 to 30 members well-versed in related technologies, markets a light-emitting material to South Korean and Chinese manufacturers. The material is employed in the low-cost "printing method" of panel production. While the vapor-deposition production process currently enjoys widespread use, the printing method is likely to increase for production of large panels.

After receiving orders, the company will start making the material, which should see use in OLED TVs scheduled to hit the market in 2018.

Surging demand

According to British market research firm IHS Markit, global shipments of OLED display panels are expected to jump 63% in 2017 from the previous year to $25.2 billion. South Korean makers Samsung Electronics and LG Display account for most of the market.

But Japanese companies are still grabbing a piece of the action by maintaining high market shares for materials and parts used to make the panels, as well as panel production equipment.

Idemitsu, which is competing with Germany's Merck for top share in the market for light-emitting materials, is trying to increase combined production capacity in Japan and South Korea by 70% in the two years through fiscal 2018. And Sumitomo Chemical is poised to launch commercial production of a light-emitting material compatible with the printing method of production.

Japanese companies also lead in panel production equipment. Canon Tokki, which has the biggest share of the market for deposition machines, plays a key role in panel production. It expects its 2017 output capacity to double as it scrambles to keep up with demand.

Meanwhile, Dai Nippon Printing and Toppan Printing are major producers of the specialized metal masks that are the key to OLED displays' high-definition images.

Samsung Electronics and LG Display remain bullish about investment, with each planning to spend some 1 trillion yen to increase capacity. This means Japanese companies are likely to further expand their presence in support sectors.

OLED display panels are also rapidly finding their way into smartphones. Apple, for example, is expected to adopt them in its latest iPhone. Mizuho Securities forecasts that 47% of all new iPhones will be equipped with OLED panels.

As more smartphones makers transition to OLED, the market for the panels can only grow, prompting Nissha Printing to step up marketing of a material for touch panels.

Falling prices

OLED TVs are taking off in Japan, with retail prices declining as Sony, Panasonic and other domestic makers enter the market.

Tokyo-based market research firm GfK Japan said Monday that unit sales of OLED TVs in the first half of 2017 soared nine times from the same period in 2016. Although not releasing sales figures, the firm noted, "The market is becoming activated."

The average price of 55-inch OLED TVs stood at 360,000 yen in June, compared with 150,000 yen for LCD TVs, according to BCN, another Tokyo-based market research company. Despite the price difference, OLED TVs are becoming more affordable.

Some e-commerce sites are offering 55-inch OLED TVs for less than 200,000 yen. And according to large Japanese retailer Bic Camera, sales of OLED TVs at one of its Tokyo stores have increased 30 to 40 times since last year.


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