[Edaily Reporter JAEMIN SONG ] Facing fierce competition from China, the domestic display industry has unanimously called for expanded policy support to maintain its technological lead. Samsung Display and LG Display emphasized the need to continue production innovations using artificial intelligence (AI) and investments in next-generation technologies, while also improving investment conditions through tax incentives and infrastructure development.

Heo Cheol, Executive Vice President of Samsung Display, said at the policy forum titled “Displays as Industrial Security: Achieving a Leapfrog Advantage Through AI,” held on the 1st at the National Assembly Members’ Office Building in Seoul, “Displays are becoming a core strategic asset that determines leadership in the electronics industry and national security,” adding, “AI is fundamentally changing the landscape of competition.”

Samsung Display is focusing on applying AI to material design and inspection to boost productivity and reduce defect rates. The company is also preparing for new form factors, such as foldable and slider devices, as well as the microdisplay market. In particular, it invested over 4 trillion won in an 8.6-generation organic light-emitting diode (OLED) line for IT devices and began mass production last July.

Samsung Display maintains that policy support is necessary to sustain this large-scale investment. Vice President Heo said, “There are limits to what companies can achieve on their own to maintain a decisive technological lead and succeed in a rapidly changing global environment.” He went on to emphasize the need to extend the carryover period for tax credits on national strategic technologies from the current 10 years to 20 years and to ensure the timely provision of key infrastructure such as power, water, and roads.

LG Display also viewed technological capabilities as ultimately decisive for survival in the competition with China. Lee Han-gu, Group Head at LG Display, stated, “The key to surviving as China catches up lies in overwhelming and differentiated technology.” LG Display has been developing its own customized AI and applying it to production sites since 2024. In the design sector, the company highlighted a case where AI reduced a task that previously took about a month to just 8 hours.

LG Display has requested that the government implement a “direct refund system.” The display industry, which requires massive investments in production facilities and research and development (R&D), currently finds it difficult to immediately benefit from the existing system—which allows for a partial deduction of investment costs from corporate income tax when losses result from such investments. The company explained that the system needs to be improved so that a portion of the tax credit can be refunded in cash even in years when the company reports a loss. They also suggested that the unique characteristics of border regions, such as Paju, should be reflected in the “Regional Preferential Index” currently being designed by the government.

Industry representatives also pointed out that AI competitiveness should not be limited to large panel manufacturers. Lee Sang-jin, Executive Director of the Korea Display Industry Association, explained that according to the association’s survey, 30% of small and medium-sized enterprises (SMEs) have almost no experience with AI, while 36.2% are still in the stage of considering its adoption. He argued that large companies’ experience with AI should be shared with their partner firms, and that the government should provide support for initial implementation costs and consulting services.

Securing new sources of demand is another challenge. During the forum, the automotive display sector—driven by the spread of autonomous driving and software-defined vehicles (SDVs)—and the defense sector, including head-up displays (HUDs) for fighter jets, were cited as emerging markets. In the automotive sector, some participants suggested that government R&D support should be expanded beyond panel development to include actual vehicle application and validation.

Executive Director Lee stated, “While semiconductors and AI are multilateral industries involving multiple countries, the display industry is effectively a contest between China and South Korea.” He went on to emphasize that, as the shift toward AI, the expansion of new markets, and changes in the supply chain are now in full swing, it is time to revise the government’s 2023 Display Industry Innovation Strategy to align with the changing environment.