Samsung and LG: Display Technology as a National Security Asset

“Individual companies cannot maintain a significant competitive edge through isolated efforts. To prevent losing global panel leadership to China, we must define display technology as a national security asset and implement proactive support and policy changes at the national level immediately,” said Heo Cheol, Vice President of Samsung Display.

Experts from industry, academia, and research gathered on October 1 at the National Assembly for a policy discussion organized by the Korea Display Industry Association, where they unanimously called for extraordinary government support to counter China's technological and capital offensive.

During the discussion titled “Display as an Industrial Security Asset, Leading the Super Gap with AI,” Heo emphasized that “display technology has evolved beyond mere product competitiveness to become a core strategic asset that influences the leadership of the electronics industry and national security.” He urged for an extension of the tax credit carryover period for national strategic technologies from 10 years to 20 years and an expansion of R&D cost deductions.

Lee Han-goo, head of LG Display, echoed this sentiment, stating, “The only way to survive amid China’s fierce competition is through overwhelming and differentiated technological capabilities.” He pointed out a loophole in the corporate tax reduction benefits that companies do not receive in a timely manner when they incur losses due to the large-scale equipment industry’s characteristics. He strongly requested the introduction of a 'direct refund system' that would allow for immediate cash refunds of a portion of investment funds. He also called for policy considerations for companies in border areas like Paju, which, despite being in the metropolitan area, face emotional and geographical isolation and are close to North Korea.

The domestic display industry is recognized as a key sector with a production inducement effect of 20 billion won for every 10 billion won invested, and it has a higher trade balance improvement effect than semiconductors. However, concerns have been raised about its position being shaken by China's rapid pursuit and global power competition.

Kim Hyuk-jung, a researcher at the Korea Institute for International Economic Policy, warned, “China has rapidly reduced the gap, capturing 30% of the OLED market within a decade, following its dominance in the LCD market.” He referenced a U.S. Department of Commerce report and examples of regulations on Chinese companies under the National Defense Authorization Act (NDAA), stating, “In modern warfare, displays serve as the 'eyes and brain' of advanced weapons, making supply chain monopolies a critical threat to national security.”

Experts identified 'AI convergence technology' as a potential breakthrough to counter China's offensive. Han Cheol-jong, head of the Korea Electronics Technology Institute (KETI), noted, “In new AI markets like smart glasses and autonomous driving, form factor flexibility and low-power, high-transmittance technologies will determine leadership.” He highlighted that the glass processing (TGV) technology, which is gaining attention due to the large-scale of AI semiconductors, could create explosive synergies with the 46 trillion won infrastructure established by the domestic industry.

Lee Jeong-hoon, CEO of Seoul Semiconductor, remarked, “Despite having world-class micro LED technology, the domestic market is being eroded by Chinese products,” adding that there is an urgent need for government and public institutions to create policy demand by prioritizing the purchase of domestic technological products, similar to the U.S. Trade Agreements Act (TAA).

Moderating the discussion, Moon Dae-kyu, a professor at Soonchunhyang University, stated, “Corporate investment goes beyond merely building factories; it is about establishing a shield for South Korea's industrial and economic security.” He emphasized that as China accelerates its efforts by integrating AI across the board, the government and National Assembly must swiftly provide support for national R&D infrastructure and proactive policy changes.