▶ [2020.06.10 8 News] China's counterattack with'half price TV'… LCDs were removed.

In the mid-1990s, the Korean display industry was already leading the world. Samsung Electronics and LG Philips LCD (currently LG Display) competed for the first time in the TFT-LCD market, which grew by more than 30% per year. The problem is that most of the core materials that make up the LCD panel depend on imports. One of them is a polarizing plate that transmits backlight light in a certain direction to realize an image. It is an essential material that accounts for about 10% of the cost of LCD panels, and is only made by Nitto Denko, Sumitomo Chemical, and Sanlitz in Japan.

LG Chem, which occupied the next-generation display as a new growth engine in the 21st century, was interested in it. As the LCD market expands, it is calculated that if a polarizer made of a core material is made and sold, profits will follow. In order to reduce trial and error following the early stages of development, we asked Nitto Denko for technical cooperation to ensure stable production. The answer that came back was "Never transfer technology". He did not want to share the rapidly growing market with Korean companies.

LG Chem turned to self-development. In optical, physics, and optical applications, various studies such as adhesives and precision fields were needed. Even in the financial crisis in the late 90s, the research personnel were newly recruited and the organization for independent development did not stop. It was fortunate that we were able to mobilize our original technology in the field of petrochemicals and industrial materials as a chemical company. After operating the first line in 1999, it succeeded in mass production in just two years. It was an ultra-fast development.

However, as a latecomer, it was not easy to go beyond Japanese companies. The wide line yields remained at around 50% for almost half a year. In some cases, the customer was rejected. There was no point to ask where the optical properties of the polarizers did not come out properly or if the surface continued to burst. Japanese companies did not watch the emergence of competitors. We lowered the unit price by 20% and entered explicit checks.

When it came to talking about closing a business, all the employees went on a shift day and night. It's time for everyone to settle down in the factory, the company judge said. Eventually, it succeeded in improving yield in one month and turned to surplus in 18 months. Sales, which were only 5 billion won in 2000, increased to 400 billion won, 100 times the size in 5 years. In 2009, it finally beat Nitto Denko and became the world's No. 1 polarizer. It started in the 2000s and has grown rapidly over a decade, in line with the growing demand for laptops, monitors and smartphones. Regarding the localization of LG Chem's polarizer, the Korea Institute of Engineering, Hanlimwon, evaluated that "Korea, which was the last year's pursuit of Japan as a technological powerhouse, was the first leading company in Korea."

In this way, the LCD polarizer that represents the'pole' of our industry is now moving to China. LG Chem decided to sell its business after receiving $1.1 billion from Chinese chemical materials company Shanshan. Although the board approval process still remains, the sale policy will not change. An official from LG Chem said that the business is not a bad business yet, even if the Chinese market itself that still produces a lot of LCD panels is not a bad business, but the technology itself is generalized so that many Chinese companies jump in and there is no price competition.

There is also a realistic reason why there is nowhere else to sell. Chinese companies' share of the world's mid-to-large LCD panel shipments surged from 6.1% in 2011 to 40.4% last year. During the same period, Korea shrank from 51.9% to 23.9%. The Korean display industry, tired of China's low-cost offensive, is now declaring'de-LCD' one after another and focusing on next-generation displays such as OLED. From this year on, it is expected that China will be responsible for more than half of the world's LCD supply, and the adjustment of the Korean LCD rear industry (material), which is losing its market, may seem natural at first glance. As for LG Chem, there is also the aspect of raising cash to focus on the core food of the secondary battery.

Of course, there is also a cold evaluation that LG Chem has achieved the No. 1 position in terms of volume, but still lacks Japanese technology. "It's coming." Seok Jun-hyeong, former vice president of Samsung Electronics, who led the localization of Samsung's polarizer after LG Chem, said it highly praised LG Chem's technology and said, "LG Chemical's polarizer was a vague position in Japan in terms of technology and China in price competitiveness." As for the decision to sell, he said, "I can understand enough from a business level," and "I'd like to see our company endure with the core technology in the field of polarizer materials."

So, LG Chem's sale of the polarizer business seems to symbolize any'sookmyung' carried by the Korean industry built up in ruins. It is like the fate of a Korean company that pursues Japan and finally overcomes it, but cannot stop for a moment while being pursued by China. Although I understand with my head the dizzying claims that I need to develop an intermediate-materials-oriented industry focusing on material parts and equipment, it is a dramatic show that I have no choice but to think it is a sound to practice. It is also a confirmation of the grim business world that even localized technology can sell to potential competitors to survive.