A History of Changes in the LCD Industry

Japan’s Willingness to Start Small

When it came to LCDs, Americans wanted to “go big” from the very beginning—targeting large-screen applications such as televisions. Small uses like calculators and digital watches were dismissed as low-margin and not worth the effort. Yet at the time, large-size LCD technology was still far from maturity. Technical hurdles loomed large, breakthroughs were slow to arrive, and commercialization remained elusive. In the end, U.S. companies gave up.

That retreat handed a once-in-a-generation opportunity to the Japanese—who, unlike their American counterparts, were not afraid of starting small.

What the Americans abandoned, the Japanese embraced. Skilled at turning “borrowed stones from other mountains into jade,” Japanese firms found ways to acquire U.S. LCD patents. Sharp, for example, paid $3 million to purchase LCD technology from RCA, while Seiko obtained similar technology through other channels. In 1973, Sharp successfully launched the world’s first TN-LCD calculator, while Seiko introduced a TN-LCD digital watch. Soon after, companies such as Panasonic, Hitachi, and Toshiba also poured resources into LCD research and development.

The “small applications” cast aside by the United States quickly became Japan’s first pot of gold.

Then came the next leap. In 1988, Sharp took the lead again by unveiling a 14-inch TFT-LCD display, igniting explosive growth in the global laptop market. Japanese manufacturers rode this wave into another profit boom. By 1994, Japan’s share of the global LCD market had soared to a staggering 94%.

Unsurprisingly, this did not sit well with the United States. Washington responded with a series of countermeasures—raising tariffs on TFT-LCDs and filing anti-dumping lawsuits against Japanese display makers—in hopes of slowing Japan’s advance and rebuilding an American LCD supply chain.

But that was easier said than done. Faced with Japan’s entrenched technological advantages, massive capital investments, and long industrial cycles, these containment efforts failed to revive the U.S. display industry. Instead, they created an unexpected opening for South Korea and Taiwan.

How did that happen?

The Koreans Who Bet Big

Watching Japanese companies rake in enormous profits, South Korean firms were understandably eager to get a slice of the pie. They began laying the groundwork in TFT-LCD manufacturing, but in the early days they were no match for the Japanese giants. All they could do was wait for the right moment.

That moment arrived in 1994—and it came in triplicate.

First, the United States began taking steps to curb Japan’s TFT-LCD expansion.
Second, Japan’s economy slid into stagnation following the collapse of its asset bubble, dragging down the LCD industry along with it.
Third, the industry entered a downturn in the so-called “crystal cycle”—the recurring boom-and-bust pattern driven by shifts in TFT-LCD supply and demand that send panel prices rising and falling.

When all three forces converged, it was a gift delivered at exactly the right time.

South Korean companies went all in. Capital poured into the LCD industry at breakneck speed, and multiple TFT-LCD production lines were built in rapid succession.

Then came the Asian financial crisis three years later. Just as the LCD industry might have emerged from its slump, demand weakened again. Japanese firms were hit hard for a second time. Facing mounting losses, they slashed production and laid off workers.

Samsung and LG took the opposite path.

They, too, were bleeding cash—hemorrhaging it, in fact—but instead of retreating, they doubled down. They matched Japan dollar for dollar, endurance for endurance, betting that whoever could hold out the longest would win. Korean firms continued pouring money into ever more advanced TFT-LCD fabs and recruited Japanese engineers who had been laid off, bringing critical know-how under their own roof.

Nearly a decade of relentless investment and learning paid off. By 1999, Samsung had captured 18.8% of the global LCD panel market, ranking first worldwide, while LG followed closely with 16.2%. South Korea had overtaken Japan and emerged as the new powerhouse of the LCD industry.

The victory did not come cheap. Samsung posted losses exceeding $100 million per year for seven consecutive years. LG endured eight straight years of losses, averaging $53 million annually. But in the end, the gamble paid off—opening the door to more than a decade of easy profits for Korean manufacturers.

Taiwan: The Unexpected Winner

Rising alongside South Korea’s ascent in the LCD industry was Taiwan. But unlike Korea, Taiwan did not actively challenge Japan head-on. Instead, the opportunity was handed to it—by the Japanese themselves.

By the mid-1990s, Japan’s LCD industry was trapped in a perfect storm. The domestic economy was sluggish, the LCD sector was mired in a downturn, the United States was imposing trade pressures, and South Korean competitors were steadily eroding Japan’s market share. Japan found itself under siege from both within and without.

To offset losses, spread risk, raise capital, and push back against pressure from the U.S. and Korea, Japanese firms made a remarkable shift. Technologies that had once been guarded with extreme secrecy were shared with Taiwanese companies. Japan encouraged Taiwan to build its own TFT-LCD production lines and localize manufacturing.

For Japan, this strategy offered multiple benefits: technology licensing fees provided much-needed cash flow; outsourcing investment reduced the risk of further losses; and Taiwan-based production helped alleviate capacity constraints.

For Taiwan, the opportunity was too good to pass up. Local firms had long aspired to enter the LCD industry but lacked the necessary technology. When Japanese companies came knocking, Taiwan was ready. With a solid semiconductor manufacturing foundation—an important advantage for TFT-LCD production—Taiwanese companies shifted into high gear.

Between 1999 and 2009, Taiwan brought an astonishing 37 LCD panel production lines into operation in just a decade. This surge marked a golden era of investment in Taiwan’s industrial history and gave rise to the island’s so-called “Five Panel Tigers.” The result was a rapid takeoff of Taiwan’s TFT-LCD industry, which surpassed Japan and became the world’s second-largest player, trailing only South Korea.

China’s Mainland: The Last to Laugh

Every crisis carries the seeds of opportunity.

The 1997 Asian financial crisis allowed South Korea to seize its moment and overtake Japan. A decade later, the 2008 global financial crisis created a similar opening—this time for mainland China. By capitalizing on the downturn, Chinese manufacturers ultimately surpassed both South Korea and Taiwan.

The playbook was strikingly familiar. Like Korea before it, China pursued counter-cyclical investment—pouring money into the industry when the LCD cycle was in decline. As financial stress forced competitors to post losses and lay off workers, Chinese firms moved in, acquiring assets and absorbing technical talent.

Under the dual blows of the global financial crisis and a prolonged LCD downturn, South Korean display makers shifted into defensive mode, scaling back investment. Taiwan’s panel industry fared even worse, suffering massive losses and undergoing repeated rounds of consolidation. Mainland China’s LCD sector was also hit hard, but companies such as BOE Technology Group and China Star Optoelectronics saw something others did not: an opportunity disguised as a crisis.

At the same time, there was another factor that gave Chinese companies confidence. China was not only the world’s largest market for LCD panels, but also the only major market where demand was still growing at the time. In addition, labor costs in China were relatively low. Chinese firms believed that if they could endure this difficult period, domestic LCD panels—offering better cost-performance—would ultimately win market acceptance.

With relentless efforts from companies such as BOE Technology Group, China Star Optoelectronics, and Tianma Microelectronics—along with strong policy support from the government—China’s LCD display industry entered a phase of rapid expansion.

Between 2008 and 2013, BOE continued to pour massive investment into the sector, building multiple TFT-LCD production lines and completing China’s first Generation 8.5 fab, capable of meeting demand across a wide range of screen sizes. China Star Optoelectronics, founded only at the end of 2009, took just two years to independently construct and bring online China’s second Gen 8.5 production line.

By the end of 2015, China had eight Gen 8.5 LCD panel lines in mass production. Adding lines that were about to enter production—including BOE’s Fuzhou Gen 8.5 line, CEC Panda’s Chengdu Gen 8.6 line, HKC’s Chongqing Gen 8.6 line, and BOE’s Hefei Gen 10.5 line—the total number of high-generation LCD fabs exceeded twelve.

In the fourth quarter of 2016, BOE became the global market leader in LCD displays for smartphones, tablets, and laptops, ranked second worldwide in monitor panels, and third globally in television LCD panels.

The Final Winner Emerges

The global LCD panel market eventually settled into a three-way balance among mainland China, South Korea, and Taiwan. But Chinese mainland manufacturers did not allow this “Three Kingdoms” standoff to last long.

By 2019, BOE successfully overtook LG to become the world’s largest TFT-LCD panel manufacturer, while China Star Optoelectronics secured the third position globally. Mainland China had become the world’s largest panel manufacturing base. With LG and Samsung subsequently announcing their exit from TFT-LCD panel production, the industry’s center of gravity shifted decisively to mainland China. After decades of fierce competition, the long-running LCD battle ultimately ended with China laughing last.

The Current State of the LCD Industry

The global LCD panel market has undergone a dramatic reshuffle. Chinese manufacturers now dominate the top five positions, while Japanese and South Korean players have exited the field or pivoted toward OLED. BOE, China Star Optoelectronics, and HKC together control more than 70% of the market. Riding the wave of larger screen sizes, China Star’s panel shipments are projected to surge by 17.5% in 2025. Whether Chinese firms can replicate their LCD dominance in the OLED era, however, remains an open question.

On August 21, 2024, the Sakai Display Products (SDP) factory in Sakai City, Osaka Prefecture, officially ceased operations. As Japan’s last remaining LCD TV panel plant, its closure marked the complete end of domestic LCD television panel manufacturing in Japan.

South Korea’s situation is no more optimistic. In January 2025, LG Display announced the sale of its Guangzhou Gen 8.5 LCD plant to China’s TCL China Star Optoelectronics for RMB 13.415 billion, effectively exiting the LCD TV panel market. While LG Display still operates some LCD lines in South Korea, they are focused on notebook and monitor panels rather than televisions. Samsung, Korea’s other display giant, had already announced years earlier that it would concentrate exclusively on OLED technology and withdraw from LCD TV panels altogether. As a result, South Korea has now fully exited the LCD TV panel market.

In 2024, three of the world’s top five LCD TV panel suppliers were mainland Chinese companies: BOE, China Star Optoelectronics (CSOT), and HKC. BOE shipped 59.7 million panels, CSOT 48.1 million, and HKC 36.2 million. Together with Taiwan’s Innolux and AUO, the global LCD TV panel market has effectively become a duopoly dominated by mainland China and Taiwan.

What Comes After LCD: OLED and Mini-LED

If the story of LCD is a marathon defined by patience, capital, and industrial discipline, then the next chapter—OLED and Mini-LED—will test a very different set of strengths.

OLED, with its self-emissive pixels, thinner form factor, and superior contrast, represents a technological leap rather than an incremental upgrade. This time, South Korea did not miss the moment. Samsung and LG exited LCD early and placed decisive bets on OLED, securing leadership in smartphones, premium TVs, and high-end displays. Years of losses were once again absorbed—but this time by Korean firms—allowing them to lock in key patents, production know-how, and customer relationships.

For Chinese manufacturers, OLED is both an opportunity and a reckoning. Massive investments are already underway, but OLED’s higher technical complexity, lower yields, and stronger intellectual-property barriers make it far harder to replicate the LCD playbook. Whether China can translate its scale advantage into OLED leadership remains uncertain—and the outcome may hinge less on capital intensity than on materials science, equipment localization, and long-term R&D persistence.

Mini-LED, by contrast, offers a more familiar battlefield. As an advanced backlight technology built on the LCD ecosystem, it plays directly to China’s strengths in manufacturing scale, cost control, and supply-chain integration. In TVs, monitors, and tablets, Mini-LED is emerging as a pragmatic compromise—delivering much of OLED’s visual improvement without abandoning the LCD infrastructure. Here, Chinese panel makers and downstream brands are already moving aggressively, narrowing the gap with Korean competitors.

Looking ahead, the display industry is unlikely to be ruled by a single technology. OLED will dominate the premium segment, Mini-LED will extend the life of LCD in mass markets, and emerging technologies such as Micro-LED remain on the distant horizon. What the LCD saga ultimately teaches is not which technology wins—but who survives long enough, invests deeply enough, and stays disciplined enough to be there when the next cycle turns.

The battle is far from over. It has simply entered its next phase.