1、 itif.org How Innovative Is China in the Display Industry?STEPHEN EZELL|SEPTEMBER 2024 Chinese companies have become leading innovators in display technologies,in addition to becoming the largest global producers.Chinas display industry has grown as a result of extensive subsidies,rampant intellectu

2、al property theft,and economies of scale.KEY TAKEAWAYS Chinese enterprises global share liquid crystal display(LCD)production has reached 72 percent,while their share of organic light-emitting diode(OLED)production has now surpassed 50 percent,both starting from under 1 percent the decade before.Fro

3、m 2020 to 2027,analysts expect Chinas global share of capital expenditure(CapEx)investments in display technologies to average about 85 percent,with Chinese companies accounting for over 90 percent of the sectors CapEx by 2027.Chinese LCD and OLED makers,long second fiddle to South Korean leaders,ar

4、e increasingly winning innovation awards in the sector with novel display products.The R&D intensity of top Chinese firms in the“technology and electrical hardware and equipment”sector increased 646 percent over the past 10 years,compared with a 67 percent increase for U.S.firms.Chinese display make

5、r BOE alone received an estimated$3.9 billion in subsidies from Chinese national and provincial governments over the past 12 yearsand in 2022 alone,the company was the third-largest recipient of Chinese government subsidies.Chinas massive subsidization of the industry has driven down prices(and thus

6、 profitability)in the sector,knocking many foreign competitors out of the market or precluding would-be competitors from entering.Chinese firms capabilities in display technologies are likely to spill over into semiconductor capabilities,because process similarities between the technologies are clos

7、e to 70 percent.INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 2 CONTENTS Key Takeaways.1 Introduction.3 Background and Methodology.5 Importance of Display Innovation and U.S.Role.6 Chinas Display Industry.7 How Innovative Is China in Display?.11 Innovation Inputs to Chinas Display

8、 Industry.14 R&D Intensity.14 Scientific Publications.16 Patents.17 Company Case Studies.18 BOE.18 TCL.19 Chinas Government Policies Supporting the Display Industry.21 What Should America Do?.23 Conclusion.24 Endnotes.25 INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 3 INTRODUCTION

9、 Electronic displays have become an integral part of the economy,representing the key visual and tactile(via touchscreens)human interface for a wide variety of consumer electronics from televisions,computers,mobile phones,tablets,and vehicles to a range of other applications,from medical devices to

10、refrigerators.Displays also play vital roles in national defense capabilities,from the heads-up displays in fighter jet cockpits to the combat information centers on navy ships.Thus,leadership in electronic displays has become critical not just for a nations ability to field competitive enterprises

11、in consumer electronics and information and communications technology(ICT)industries,but also to their national defense capabilities.Indeed,innovation in displays has been an indispensable driver of the global information technology revolution.Cathode ray tubes(CRTs)were first commercialized in the

12、1920s,with color CRT being developed in the 1950s and the CRT era persisting well into the 1980s.In the 1990s,the advent of liquid crystal displays(LCDs)which leverage the light-modulating properties of liquid crystals combined with polarizersenabled the creation of the first portable laptop compute

13、rs;and in the 2000s,LCDs advanced further to enable manufacture of flat-screen televisions.Into the 2010s,display technology evolved again,with the advent of organic light-emitting diode(OLED)technologythink smartphone screensbecoming the current leading technology.While OLED display largely started

14、 with mobile phones,OLEDs have become increasingly prevalent in the flat-panel display(FPD)market(i.e.,large flat-screen TVs).(While OLED offers superior display quality,its higher cost and shorter lifespan compared with LCDs mean both technologies will likely continue to coexist.)1 Innovation in di

15、splays has been an indispensable driver of the global information technology revolution.Within LED technology,going forward,MiniLED technology,which uses LEDs that are much smaller,about 1/40 the size of regular LED backlights,comes next,and itself will be followed by MicroLED technology,which uses

16、three nonorganic LEDs(red,green,and blue)per pixel and may offer an optimal combination of clarity,durability,and energy consumption.2 Elsewhere,innovative micro-display technologies will advance visual interfaces for automated reality/virtual reality(AR/VR)goggles and help enable the metaverse econ

17、omy.Moreover,display has become one of the most significant inputs,by value,into ICT hardware.In fact,displays account for an estimated 64 percent of the value of a nominal 55”LCD ultra-high definition(UHD)TV(with the processor accounting for 13 percent and other components 23 percent).Likewise,disp

18、lays account for about 20 percent of the value of an Apple MacBook Pro computer or iPhone and as much as half of the value of Apples Vision Pro VR goggles.Overall,analysts estimate that the display unit accounts for about 22 to 37 percent of a modern smartphones material cost(compared with the 50 to

19、 70 different types of legacy chips in a smartphone,which together account for about 8 to 15 percent of the material cost).Analysts estimate that the global display market will generate$182 billion in sales in 2024 and more than double in size over the next decade to become a$372 billion market by 2

20、034.3(Analysts expect the interactive display market to grow from an$11.3 billion market in 2023 to$18.5 billion by 2031.)4 And while Chinese enterprises used to be bit players in an industry INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 4 once dominated largely by South Korean fi

21、rms,Chinas share of the combined glass display marketLCDs and OLEDsnow exceeds 70 percent.5 Breaking that down,Chinas share of global LCD production has now reached 72 percent,while its share of OLED production has exceeded 50 percent.For the first time,in Q1 2024,Chinese players surpassed South Kor

22、ean ones as the leading producers of OLED panels.6 Moreover,Chinas prowess in displays is increasingly driving the competitiveness of its TV manufacturers.Chinas rapid ascent in the display industry has largely been the result of concerted Chinese government strategiesat national and provincial leve

23、lsdesigned precisely to make it so.The Chinese government has showered the sector with subsidies in an effort to foster national champions such as BOE and TCL.In fact,China display maker BOE alone received an estimated$3.9 billion in subsidies from Chinese national and provincial governments from 20

24、10 to 2021,and in 2022,the company was the third-largest recipient of Chinese government subsidies(and in 2023,the seventh-largest recipient).In addition to cash(i.e.,loans or grants),these subsidies have taken the form of tax breaks,discounted capital,free or discounted land and utilities,and state

25、-provided financing for hiring foreign talent.Chinese display makers have also benefitted from extensive foreign IP theft.Chinas global share of LCD production has grown from 0 percent in 2004 to 72 percent in 2024,while its share of OLED production has grown from 1 percent in 2014 to over 50 percen

26、t today.Chinas aggressive subsidization of the display industry has driven down prices and led to overcapacity,thus depressing profitability for foreign competitors that have to earn market-based rates of return in order to persist in the industry.In the LCD sector,this approach has succeeded in dri

27、ving most foreign competitors out of the industryJapanese companies stopped investing in the sector wholesale around 2010,and the Japanese national champion,JOLED,recently filed for bankruptcyor precluded other would-be competitors from entering the industry.As a U.S.Department of Commerce report co

28、ncludes in diagnosing the failure of a proposed Foxconn LCD production facility to get off the ground in the United States,“Despite significant tax breaks,subsidies,and environmental exemptions from the State of Wisconsin,the project did not materialize as originally envisioned due to a lack of crit

29、ical materials suppliers(e.g.,glass-makers)in the geographic vicinity,a global glut in LCD production,and local labor costs making production unprofitable.”7 While Chinese display makers such as BOE,TCL,Tianma,and Visionox certainly started behind leading peers(notably Japans Sharp and South Koreas

30、LG and Samsing Display),they are increasingly developing innovative products in their own right,as reflected by BOE and TCL increasingly winning prestigious awards in the field,such as at the Consumer Electronics Show(CES).For instance,at the 2023 CES,TCL-CSOT(China Star Optoelectronics Technology C

31、o.,Ltd.,which is TCLs display subsidiary)won the“Innovation Award for MiniLED Display of the Year.”BOE has developed innovative flexible OLED screens and what it claimed to be the worlds largest 95-inch 8K OLED screen when the company launched it.BOEs display manufacturing facilities are among the w

32、orlds most sophisticated and are extensively automated.8 BOE has also worked assiduously to develop its patent portfolio,being a top 10 global patent filer over each of the past six years(and the fifth-leading patent filer globally in 2023).INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024

33、 PAGE 5 In summary,China has clearly wrested leadership in the global LCD industry away from other players:In 2004,China accounted for 0 percent of global LCD production,but by 2024,this share had reached 72 percent(as strong a case of“comparative advantage”being effectively artificially manufacture

34、d through industrial policy as there ever could be).Likewise,Chinas market share in OLEDs has increased from less than 1 percent in 2014 to over half today;and if current trends continue,competitors in that segment of the market will be hard-pressed to persist as well.(Indeed,the only route for Sout

35、h Korean or Japanese players will be to out-innovate on the front end to develop the next generation of MiniLED and MicroLED solutions.)China has clearly wrested leadership in the global LCD industry away from other players.Moreover,it turns out that the manufacturing process similarities between fa

36、bricating displays and semiconductors are close to 70 percent,meaning that as Chinese firms develop capabilities in display technologies,these may increasingly spill over into semiconductor capabilities,furthering powering the competitiveness of Chinas semiconductor firms.9 Ultimately,Chinas increas

37、ing capabilities in display manufacturing are thus likely to spill over to adjacent and downstream sectors.BACKGROUND AND METHODOLOGY The common narrative is that China is a copier and the United States is an innovator.That narrative often supports a lackadaisical attitude toward U.S.technology and

38、industrial policy.After all,America leads in innovation,so there is nothing to worry about.First,this assumption is misguided because innovators can lose leadership to copiers with lower cost structures,as has been the case in many U.S.industries,including consumer electronics,semiconductors,solar p

39、anels,telecom equipment,and machine tools.10 Second,its not clear that China is a sluggish copier and always destined to be a follower.To assess how innovative Chinese enterprises and industries are,the Smith Richardson Foundation provided support to the Information Technology and Innovation Foundat

40、ion(ITIF)to research the question.As part of this research,ITIF is focusing on particular sectors,including display innovation.To be sure,its difficult to assess the innovation capabilities of any countrys industries,but it is especially difficult for Chinese industries.In part,this is because,under

41、 President Xi Jinping,China discloses much less information to the world than it used to,especially about its industrial and technological capabilities.Notwithstanding this,ITIF relied on several methods to assess Chinese innovation in displays.First,we conducted in-depth case study evaluations of t

42、wo Chinese consumer electronics/display innovation companies randomly selected from companies listed on the“2023 EU Industrial R&D Investment Scoreboard.”Second,we conducted interviews with global experts on the Chinese display innovation industry.And third,we assessed global data on display innovat

43、ion,including scientific articles and patents.INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 6 IMPORTANCE OF DISPLAY INNOVATION AND U.S.ROLE German physicist Ferdinand Braun is credited with inventing the first CRT in 1897,though it was John Bertrand Johnson and Harry Weiner Weinha

44、rt of Western Electric who were the first to invent a hot cathode and turn CRT into a commercial product in 1922.11 Scottish engineer John Baird,Russian engineer Vladimir Zworykin,and American Philo Farnsworth are credited with pioneering television technology(Farnsworth won the U.S.patent,despite a

45、 lengthy dispute with RCA),but it was RCA under the leadership of David Sarnoff(who had hired Zworykin)that took the lead in commercializing the technology and establishing U.S.leadership in the industry.12 By World War II,RCA had become Americas leading manufacturer of displays for critical radar,s

46、onar,and electronic navigation systems.By 1946,enhanced by innovations developed during WWII,televisions emerged significantly improved.13 While in 1948 about 800,000 television receivers were sold,by 1950,this figure had surged to 7.5 million.(As noted,although displays and televisions are separate

47、displays being a TVs key inputthey do go hand-in-hand.)The postwar years were a time of remarkable growth for U.S.television manufacturing and programming,and RCA generated substantial revenue from its patents and manufacturing.14 Despite RCA becoming the leading American color TV producer of the 19

48、50s,the U.S.Department of Justice(DOJ)began aggressive antitrust actions against RCA.DOJ required RCA to share its patents freely with domestic competitors and to only charge royalties from foreign competitors.RCA,reliant on licensing revenue,was forced to license its technologies to foreign compani

49、es,primarily ones from Japan.The effect was devastating.As Economist Steven Klepper argued in his book Experimental Capitalism:The Nanoeconomics of American High-Tech Industries,the action was one of the triggers that led to the eventual demise of the American color TV industry.15 Or as historian Jo

50、hn Steele Gordon wrote,“To protect an American industry from the dominance of one company,antitrust had killed off the entire industry.Thats a bit like using a guillotine to cure a headache.”16 There are no major U.S.companies involved in LCD production,nor is there significant LCD manufacturing in

51、the United States.By the 1960s,Japanese televisions were flooding the American market,sold at cheaper prices than their American counterparts.This was made possible by lower labor costs and technology transfer,as well as the practice of“dumping,”which involved pricing below cost in the United States

52、 but pricing high in Japan,where the industry was protected from foreign competition.17 Unfortunately,when Zenith filed suit against Japanese players on antidumping grounds,the U.S.Supreme Court ruled against it,in large part because the court did not take the time to understand the Japanese industr

53、ial policy system and the role of“administrative guidance”provided by Japans Ministry of International Trade and Industry(MITI),which coordinated foreign markets,including pricing policies,of major Japanese companies in particular industries.18 Such a decision would be akin to not recognizing the fo

54、undational role the Chinese government has played in turbocharging Chinas display industry today,including though massive industrial subsidization.By the late 1990s,Zenith,the last well-known U.S.television manufacturer,had been acquired by South Koreas LG Electronics,ringing the death knell for the

55、 U.S.industry and providing a INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 7 crystal clear case study of how poor antitrust and trade policy can conspire to decimate a U.S.industry.Today,only two U.S.television manufacturers remain:VIZIO,which was founded in 2002 to provide high-

56、quality,low-cost flat-panel televisions but produces primarily in countries such as China,Mexico,and Taiwan,and South Carolina-based Element Electronics,founded in 2006 to manufacture budget-friendly LCD and LED TVs.19 However,there are no major U.S.companies involved in LCD production,nor is there

57、significant LCD or OLED manufacturing at commercial-product scale in the United States.20 As China captures ever-greater market share in the display industry,the United States risks increased vulnerability to dependence on Chinese suppliers for critical display inputs,which is concerning at a time w

58、hen the United States has taken steps to increase its resilience and self-reliance in supply chains for critical ICTs.Moreover,with displays vital to numerous weapons system platforms,the United States needs to ensure it maintains capabilities in display for defense purposes alone.CHINAS DISPLAY IND

59、USTRY As noted,over the past two decades,Chinas share of the LCD market has grown from virtually nil in 2004 to 72 percent today.(See figure 1.)Meanwhile,South Korean companies share of the LCD market cratered from 36 percent to just 4 percent,while Japanese companies share fell from 22 to 4 percent

60、 as well,and Taiwanese companies share fell by almost half,from 38 to 22 percent.The scale of Chinas overall display industry continues to grow,with it experiencing a compound growth rate of 21.6 percent from 2012 to 2022.21 Figure 1:Global LCD industry market shares,by country22 0%10%20%30%40%50%60

61、%70%80%90%100%20042009201420192024JapanTaiwanChinaSouth KoreaINFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 8 Similarly,Chinas share of the global OLED market has grown from virtually nothing,just 1 percent,in 2004 to over half today,while South Koreas share of the market has falle

62、n from 96 to 45 percent over that timeframe.(See figure 2.)Figure 2:Global OLED industry market shares,by country23 Within the OLED market,Samsung Display remains the leading player,with a 49 percent market share as of Q1 2024,but BOE has moved into second place,with a 16 percent market share,follow

63、ed now by Chinas Tianma and Visionox(with 10.8 percent and 10.1 percent market shares,respectively),and LG Display now in fifth place with a 9.5 percent market share.(See figure 3.)In the small and medium-sized OLED market(think of like vehicle display screens),South Korean companies held a 62.3 mar

64、ket share in 2023 compared with Chinese firms 36.6 percent;but by Q1 2024,Chinese firms had taken a 50.5 percent market share compared with South Korean firms 48.2 percent share,meaning that in this sector,China closed a gap of over 20 percentage points in just one year alone.In total,between 2015 a

65、nd 2022,Chinese manufacturers grew their capacity from 1.0 million glass sheets per month(measured on a Gen 8.5 converted scale)to 4.0 million glass sheets per month.24 0%10%20%30%40%50%60%70%80%90%100%201420162018202020222024OthersChinaSouth KoreaINFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMB

66、ER 2024 PAGE 9 Figure 3:Overall OLED shipment market shares25 As noted,Chinese dominance in display innovation is in turn powering Chinese enterprises downstream competitiveness in the TV industry.Chinese companies including BOE,China Star(i.e.,TCL-CSOT),and HKC Display account for 70 to 85 percent

67、of the 65-/75-/85-inch LCD panel market and nearly 100 percent of ultra-large-sized LCD TVs(90115 inches).26 As market research firm Omdia wrote,Chinese TV makers TCLs and Hisenses“early adoption and sourcing of ultra-large-sized panels(98-inch and 100-inch)from Chinese panel makers have been partic

68、ularly notable.This strategy not only helps panel makers efficiently utilize their display production capacity but also supports Chinese TV brands in their quest to become global leaders in the ultra-large-sized LCD TV market.”27 As of year-end 2023,Chinas Hisense had claimed a 14 percent share of t

69、he global television industry and TCL 13 percent,though Samsung still led with a 19 percent market share.(See figure 4.)0%10%20%30%40%50%60%70%80%90%100%Q1 2023Q2 2023Q3 2023Q4 2023Q1 2024Samsung Display(KOR)LG Display(KOR)BOE(CHN)Tianma(CHN)Visionox(CHN)Others(CHN)INFORMATION TECHNOLOGY&INNOVATION

70、FOUNDATION|SEPTEMBER 2024 PAGE 10 Figure 4:Company market shares of global television industry,2023(Chinese firms in orange)28 Chinese companies have also become significant players in the automotive display industry,with their total market share increasing from just 12.9 percent in 2016 to 45.3 per

71、cent today.(See figure 5,last bar.)(Note:Shown in figure 5 are various types of automotive displays,AMOLED referring to active-matrix OLEDs.)Chinas two largest players in the automotive sector,BOE and Tianma,together now account for 30.7 percent of the global market.29 Figure 5:Automobile unit shipm

72、ent share,by region,first half of 202330 0%2%4%6%8%10%12%14%16%18%20%Samsung HisenseTCLLGXiaomiSkyworthPhilips+AOCSonyVIZIOSharp0%10%20%30%40%50%60%70%80%90%100%AMOLEDa-Si LCDLTPS LCDOxide LCDTotalJapanTaiwanChinaSouth KoreaINFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 11 Finally,

73、a key reason Chinese companies have become so strong in the display industry is that they are leading investment in it.And these are capital-intensive projects:A new display fab can cost as much as$7 billion and take three to four years to complete.31 From 2015 to 2022,China had already increased it

74、s number of multibillion-dollar display fabs from 7 to 16.32 From 2020 to 2027,analysts expect Chinas global share of capital expenditure(CapEx)investments in display technologies to average about 85 percent,with Chinese companies expected to account for over 90 percent of the sectors CapEx by 2027.

75、(See figure 6.)Figure 6:Global shares of display equipment CapEx by country,20202027(forecast)33 HOW INNOVATIVE IS CHINA IN DISPLAY?Chinese companies are making strides in display innovation,with regard to both manufacturing process innovation and product innovation itself.Importantly,innovation in

76、display manufacturing processes is critical for enabling display product innovation.Indeed,display fabs are some of the most expensive and complex in the worldrivaling at least the cost and complexity of 7 to 10 nanometer(nm)semi fabs(if not the most-sophisticated 2 to 3 nm semi fabs,which can cost

77、over$30 billion to construct.)When BOE launched its Gen 10.5 LCD fab in Heifi,China,in 2018 called“Fab 9”at a cost of$6.95 billion,it was regarded at the time as“the most advanced display fab in the world.”34(See Box A for a description of the LCD manufacturing process.)Notably,since most display ma

78、nufacturing must be performed in a cleanroom,and handling the glass requires extraordinary precision,display factories are heavily automated and robotized,with few engineers on the factory floor.More recently,in April 2022,BOE confirmed it would build an$8.8 billion 8.5-Gen IT AMOLED line in Chengdu

79、,Chinathe facility to be known as B16to target the laptop and tablet market.35 BOEs equipment costs for the B16 facility are expected to be about 18 percent higher than Samsungs A6 factory(which is manufacturing competing IT AMOLED products).However,as one analyst explained,“B16 will adopt a more eq

80、uipment intense low-temperature poly oxide(LTPO)array process than Samsungs planned oxide thin film transistor(TFT)approach.”36 The equipment BOE is using at B16,though more costly,will give it the capability to produce fully 0%10%20%30%40%50%60%70%80%90%100%20202021202220232024202520262027IndiaJapa

81、nTaiwanChinaSouth KoreaINFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 12 flexible displays(and presumably also include more module process equipment).BOE asserts that factory B16 will enable it to boost OLED production by more than 50 percent over the ensuing three years.37 Box A:H

82、ow an LCD Screen Is Manufactured Writing in Forbes,Harvard professor Willy Shih has provided a comprehseive description of the complex process of maufacturing LCD display panels.38 The following is excerpted from his article with permission:Liquid crystal display screens are manufactured by assembli

83、ng a sandwich of two thin sheets of glass.On one of the sheets are transistor“cells”formed by first depositing a layer of indium tin oxide(ITO),an unusual metal alloy that is transparent.That conveys electrical signals to the middle of a screen.Then a layer of silicon is deposited,followed by a proc

84、ess that builds millions of precisely shaped transistor parts.This patterning step is repeated to build up tiny little cells,one for each dot(known as a pixel)on the screen.Each step has to be precisely aligned to the previous one within a few microns.On the other sheet of glass,the process entails

85、making an array of millions of red,green,and blue dots in a black matrix,called a color filter array(CFA).This is how colors are produced when light is shined through it.Then tiny amounts of liquid crystal material are dropped into the cells on the first sheet and the two sheets are glued together.T

86、he manufacturing process align the two sheets so the colored dots sit right on top of the cells;they cant be off by more than a few microns in any direction anywhere on the sheet.The sandwich is next covered with special sheets of polarizing film,and the sheets are cut into individual“panels”a term

87、that is used to describe the subassembly that actually goes into a TV.Flat-screen television being manufactured along a Chinese assembly line39 INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 13 In terms of product innovation,Chinese display products have made great strides in recen

88、t years,despite,on net,continuing to lag behind leading South Korean products by some degreealthough that gap temporally is likely at most 18 months behind.Notably,in 2021,Apple approved Chinas BOE as an iPhone display supplier,and BOE is reportedly supplying OLED panels for the newest iPhone 15 ser

89、ies base model.40 However,as one analyst noted,Chinese OLEDs feature predominantly in domestic products or in Apples budget models due to their lower quality and yield compared with South Korean OLEDs.As the analyst elaborated,“Chinese companies have not yet matched Korean technology in power consum

90、ption,weight,and image quality,which is why they have not supplied premium products like Apples iPads.”41 The analyst noted,however,that“Chinese companies aim to quickly close the technology gap by investing heavily with profits from their domestic market.”42 That said,Chinas display and TV products

91、 are demonstrating increasing innovation and starting to win prestigious awards.At the January 2024 CES in Las Vegas,TCL introduced what it billed as“the worlds largest MiniLED TV,”measuring 115 inches.There,TCL also highlighted its ink-jet(IJP)OLED technology,saying it had achieved“significant brea

92、kthroughs”in image quality,power consumption,and product lifespan.43 At the show,TCL chairperson Tomson Li noted that when TCL first appeared at CES,“we had only a small booth covering 9 square meters.”In 2024,the TCL booth covered a space of 1,700 square meters.44 TCLs portfolio at the January 2024

93、 CES built upon its showing at the May 2023 Display Week expo in Los Angeles,at which the company“unveiled over 30 of its latest products and advanced technologies”including more than 10 firsts in the world,the company claimed.45 At that conference,Louis Lazar,a senior consultant at Newry Corp,an in

94、novation and growth strategy consulting firm,commented that“China has been pushing innovations in the display industry,and has been leading the way,which was really impressive.”46 In terms of product innovation,Chinese display products have made great strides in recent years,despite,on net,continuin

95、g to lag behind leading South Korean products by some degreealthough that gap temporally is likely at most 18 months behind.For its part,at the 2024 CES,BOE“rolled out a slew of new products such as a flexible organic light-emitting diode or OLED display,a transparent display panel,a 4K mini LED cur

96、ved display,and a 45-inch 8K borderless cockpit screen equipped in automaker Geelys new electric vehicle,the Galaxy E8.”47 At the 2023 LA Display Week expo,BOE presented more than 50 new products,one of them being a 110-inch 16K glasses-free 3D display,the first of its kind in the world.48(This is i

97、ts-MLED,a new glass-based active LED display system.)At that expo,BOE also introduced its f-OLED,a high-end flexible OLED technology solution,which can not only present a variety of new forms such as full screen,folding,and curling,but also realize multi-functional intelligent integration such as fi

98、ngerprint recognition,under-screen camera,and biometrics.BOE has won several notable innovation awards.For instance,the project of R&D and industrialization of high-refresh-rate display technology based on super-dimensional field technology won the First Prize of Beijing Science and Technology Progr

99、ess in 2021.49 The companys Industrial Design Centre has won 13 design awards including two Red Dot Awards,and was qualified as a leading design institution in Beijing and a design innovation center in INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 14 Beijing.And BOE was listed as

100、one of MIT Technology Reviews“50 Smartest Companies in the World”in 2019 for its self-developed light and shadow devices.50 Elsewhere,Chines OLED-maker Visionox has been regarded for its innovative self-aligned pixelization technology,portable and rollable laptops,and transparent car displays.51 And

101、 Hisense turned heads at the 2024 CES with an automobile laser display that provides higher color performance than LEDs do,is 80 percent smaller than traditional products,and for which Hisense won a CES innovation award.Hisense also earned a CES 2024 Innovation Award for the 110UX MiniLED TV it intr

102、oduced there.52 Lastly,Xiaomi,one of Chinas leading electric vehicle producers,has started incorporating high-tech display technology into its newest car models,which includes a 16.1-inch 3K resolution mini-LED center display.An Honor Magic v2 phone with a flexible screen that folds53 INNOVATION INP

103、UTS TO CHINAS DISPLAY INDUSTRY This section examines indicators assessing Chinas display industry innovativeness,considering factors such as research and development(R&D)intensity,scientific publications,and patenting levels.R&D Intensity The R&D intensity of Chinese firms competing in the display s

104、ector is mixed.According to the“2023 EU Industrial R&D Investment Scoreboard”(which actually reports companies R&D investments from the year 2021),BOE and TCL Electronics posted R&D intensities of 4.9 and 4.0 percent,respectively,for that year;this was less than Samsungs 8.1 percent R&D intensity,bu

105、t more than Sharps 3.5 percent.(See table 1.)U.S.OLED maker Universal Display posted an R&D intensity of 18 percent.INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 15 Table 1:Leading display company R&D investors on the“2023 EU Industrial R&D Investment Scoreboard”54 Company Headqua

106、rters R&D Investment(Billions)R&D Intensity Universal Display United States$0.1 18.0%Samsung South Korea$20.7 8.1%BOE China$1.8 4.9%TE Connectivity Switzerland$0.7 4.1%TCL Electronics China$0.4 4.0%Xiaomi China$2.0 3.6%Sharp Japan$0.8 3.5%While,unfortunately,displays are not a subcategory within the

107、“EU Industrial R&D Investment Scoreboard,”the study places companies(including display ones)into the broader category of“technology and electrical hardware and equipment”(although this would include other tech hardware companies,from computers to semiconductors).Nevertheless,considering this,both th

108、e United States and China experienced the greatest growth in R&D expenditures by their technology and electrical hardware firms,compared with other nations.Here,U.S.firms posted a 70 percent increase in their R&D investments from 2013 and 2021,whereas Chinese enterprises in the sector increased thei

109、r aggregated level of investment by 646 percent.(See figure 7.)Figure 7:R&D investment by leading firms in technology and electrical hardware and equipment(billions)55$0$20$40$60$80$100$120$140United StatesChinaTaiwanSouth KoreaJapan201320172021INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER

110、2024 PAGE 16 Considering a count of companies in the“technology and electrical hardware and equipment”category in the“EU Industrial R&D Investment Scoreboard”(which provides data for the top 2,500 R&D-investing companies globally),the number of Chinese companies on this list tripled from 2013 to 202

111、1(from 51 to 153),while the number of U.S.companies fell by 40 percent and other competitor nations including Taiwan,Japan,Germany,and South Korea all also experienced declines(though smaller).(See figure 8.)Figure 8:Number of top-R&D investing firms in technology and electrical hardware and equipme

112、nt,by country56 Scientific Publications Unfortunately,scientific publications data is unavailable for companies competing in the display industry specifically.However,in the closest industry for which comparable data is available,computers and information science,scientific publications in the field

113、 by Chinese publishers increased from 9,200 to roughly 102,500 between 2003 and 2022,while U.S.publications increased by only 38 percent.(See figure 9.)050100150200250ChinaUnited StatesTaiwanJapanSouth Korea201320172021INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 17 Figure 9:Scie

114、ntific publications in computers and information science57 Patents While,to be sure,patent applications can be a problematic metric(they dont necessarily reflect quality,and their number can be artificially inflated through incentives to file),Chinese companies have been trying to dramatically ramp

115、up their patent holdings in the display field.Emblematic of this is that BOE was the fifth-largest filer of patents to the Patent Cooperation Treaty(PCT)system in 2023,filing for nearly 2,000 patents.(See table 2.)BOE has been among the top 10 PCT filers for the past six consecutive years.BOEs cumul

116、ative independent patent applications exceeded 80,000 by the end of 2022.Table 2:Leading global corporate PCT patent filers,202358 Firm Number of patents filed to PCT Huawei Technologies 6,494 Samsung Electronics 3,924 Qualcomm 3,410 Mitsubishi Electric 2,152 BOE Technology Group 1,988 LG Electronic

117、s 1,887 Telefonaktiebolaget LM Ericsson 1,863 Contemporary Amperex Technology 1,799 Oppo Mobile Telecommunications 1,766 Nippon Telegraph and Telephone 1,760 020,00040,00060,00080,000100,000120,0002003200520072009201120132015201720192021South KoreaChinaTaiwanJapanUnited StatesEU-27INFORMATION TECHNO

118、LOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 18 Patent grant applications are unfortunately unavailable for display technology specifically.The closest categorically related field is for audio-visual technology patents.Here,Chinese entities had seen a sixfold increase in audio-visual technology pa

119、tents awarded from 2012 to 2022(from 412 to 2,542),although here U.S.entities were awarded about double that number of patents in 2022.(See figure 10.)Figure 10:Global number of audio-visual technology patents59 COMPANY CASE STUDIES This section examines the China display innovation companies BOE an

120、d TCL.BOE BOE Technology Group Co.,Ltd.is a leading manufacturer of electronic displays and intelligent interface products.Displays account for 88 percent of BOEs operating revenues.Since its inception in April 1993,the company has expanded its network across 20 countries and regions in Europe,the A

121、mericas,Asia,and Africa.Simultaneously,it has concentrated its ownership of manufacturing sites in domestic locations such as Beijing,Hefei,Chengdu,Chongqing,Fuzhou,Mianyang,Wuhan,Kunming,Suzhou,Ordos,and Guan.60 This balanced“conducting overseas acquisitions and taking root in domestic markets”stra

122、tegy has led to BOE becoming a leading enterprise in the global display industry.In terms of BOEs organizational structure,it employs a model called the“1+4+N Ecosystem.”The“1”accounts for the semiconductor display business,the primary capacity of BOEs resources and assets;“4”symbolizes the pillars

123、of their Internet-of-Things(IoT)operations,which are the IoT innovation business,the sensor business,the Mini LED business,and the smart medical and engineering business;“N”stands for the continuation of these IoT 01,0002,0003,0004,0005,0006,0007,000201220142016201820202022South KoreaChinaJapanUnite

124、d StatesINFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 19 applications;and“ecosystem”is a testament to BOEs collaborative partnerships and the companys management of innovative resources.61 According to 2021 rankings published by the World Intellectual Property Organization(WIPO),B

125、OE placed seventh with 1,980 international patent applications,landing it among the top 10 patent filers for six consecutive years.Among its newer applications,90 percent were domestic inventions while over 35 percent were filed overseas with its neighbors Japan and South Korea,as well as throughout

126、 the United States and Europe.In recent years,BOE has also increased its R&D investments,expenses,and personnel.In 2022,BOE invested approximately$12.6 billion RMB($1.8 billion)in R&D investments,a 1.28 percent increase from the previous year.62 This amounted to 33 R&D projects,with an increased foc

127、us on OLED technologies.Specifically,BOE began its Taishan Project with the goal of producing LCDs“with an image quality comparable to that of OLEDs and a cost lower than that of OLEDs.”63 In addition to its success in the semiconductor industry,BOE has garnered numerous global and domestic partners

128、hips with automobile corporations.One of its most notable achievements came to prominence in April 2023 at the 20th Shanghai International Automobile Industry Exhibition,which saw the launch of the Yang Wang U8,U9,Denza N7,as well as the newly released Dolphin and Seagull series models,all of which

129、were equipped with BOEs new in-vehicle display solutions.64 Specifically,the 12.8-inch large-size flexible OLED curved surface display central control screen enhanced the immersive driving experience.Its 180 ultra-wide viewing angle was conducive to improving safety features and the interactive disp

130、lay,thus distinguishing itself from the traditional LCD instrument display.BOEs continued success in new display technology has garnered the company numerous awards.Moreover,its National Engineering Research Centre was honored for its achievements in the new-type display industry by Chinas National

131、Development and Reform Commission.Additionally,the project of R&D and industrialization of high refresh rate display technology based on super-dimensional field technology was awarded the First Prize of Beijing Science and Technology Progress in 2021.65 The company has also gained substantial recogn

132、ition in the world of academia.Moreover,BOE was granted the honor of MIT Technology Reviews“50 Smartest Companies in the World”in 2019 for its self-developed light and shadow devices.66 TCL Headquartered in Huizhou,Guangdong Province,the Creative Life(TCL)Industrial Holdings Co.,Ltd.began operations

133、 in April 2019 amid a split from its predecessor,TTK Home Appliances(Huizhou)Co.,Ltd.Whereas the latter engaged in the production and manufacturing of audio tapes,telephones,TVs,mobile phones,and similar technologies,TCL focuses on the R&D,manufacturing,and sales of products including smart screens,

134、mobile communication devices,and independently develops home Internet services.With 28 R&D Centers,over 10 joint laboratories,as well as 22 manufacturing facilities,TCL effectively operates businesses in 160 countries and regions across the globe.67 This can be attributed to its innovation strategy

135、known as“Value Led by Brand with Relative Cost Advantage.”68 In more recent years,TCL has established itself as a trailblazer in the MiniLED industry,thus maintaining market competitiveness through innovative contributions and award-winning products.In developing this smart-screen technology,TCL has

136、 aimed to improve the users viewing experience by offering convenient,high-quality products with competitive pricing.As a INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 20 result,the market share of global TV shipments saw TCL with the second-highest amount by the end of 2022.69 Am

137、ong its numerous accolades in the past several years,TCLs MiniLED 4K Smart Screen 65C835 won the“Best Product 2022-2023,Premium MiniLED TV”at the Expert Imaging and Sound Association(EISA)Awards.70 Moreover,TCL MiniLED 4K Smart Screen 75C935 and 75C835 together won the CES 2023 Innovation Awards,thu

138、s displaying outstanding design and engineering in consumer technology products.71 TCL headquarters in Huizhou,China72 Over the past seven years,TCL has also made significant developments in OLED technology and panel manufacturing,with substantial contributions from the Japanese panel company JOLED.

139、Although conventional LED TV sets are less expensive and display better brightness,OLED demonstrates advanced image quality and contrast with deep blacks.The key term to note is“light-emitting,”thus an LED never completely turns off,as it functions as a backlight to produce color and transmit images

140、 through the LCD screen.In contrast,OLED technology uses micro-pixels to emit light,thus images can be more legible to the average user and are able to quickly change color since the pixels are individually controlled.73 Beyond television sets,TCL has implemented OLED technology in the form of a lig

141、ht tablet computer solution.In March 2023,TLC launched an upgraded tablet from its traditional medium-sized predecessor to an ultra-thin model with high-precision touch technology,a faster refresh rate,and enhanced image quality.74 According to Insights by GreyB,TCL currently has 7,963 patents globa

142、lly,60 percent of which are active.75 Beyond R&D investment in other global corporations,TCL has implemented similar initiatives in academic institutions.In 2018,TCL began collaborating with the Warsaw University Technology in Poland on artificial intelligence(AI)-related research and innovation aft

143、er launching the a large R&D center named TCL Research Europe.76 In connection with its ongoing investment in AI and identifying its new applications,the company also partnered with the University of Hong Kong and Chinese University of Hong Kong.77 INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEM

144、BER 2024 PAGE 21 CHINAS GOVERNMENT POLICIES SUPPORTING THE DISPLAY INDUSTRY The Chinese government has targeted the display sector since the early 2000s,although its first significant industrial policy toward the sector came in 2012 with the 12th Five-Year Plan for the Development of New Display Tec

145、hnology,which was followed with a 20142016 New Display Industry Innovation Development Action Plan and more recently the 20182020 New Display Industry Action Plan,which focused on accelerating Chinese R&D into OLED micro displays and printed micro display panels.78 Chinas“Made in China 2025”strategy

146、 also targeted the display industry,calling for the development of 100-inch-level,8K,and 4K printed AMOLED displays by 2025 as well as the development of similar flexible displays by the same year.Notably,in 2019,Chinas Ministry of Industry and Information Technology(MIIT)promulgated the“Implementat

147、ion Opinions on Promoting the Quality of Manufacturing Products and Services,”which provided direction and funding to establish a flexible display innovation center and promote further development and commercialization of display technologies.79 From 2010 to 2021,BOE received a total of$3.9 billion

148、in subsidies from the government;thats an average of$325 million in subsidies annually.Its worth noting that Chinese provinces also have their own long-term economic development plans,of which displays,TVs,and consumer electronics are a common focus.For instance,the“Outline of the 13th Five-Year Pla

149、n for National Economic and Social Development of Guangdong Province”called for“the promotion of key flat panel display industrialization projects such as TFT-LCD panels,AMOLED panels among others.”80 Sichuan province,where medium-sized OLED manufacturing is concentrated,likewise targeted the sector

150、 in its own 13th Five-Year plan,released in 2016.In 2017,the Wuhan Municipal Peoples Government issued the 13th Five-Year Plan of Wuhan East Lake New Technology Development Zone,promoting the advancement of the optical communication,laser and integrated circuits industries,and the new display sector

151、 as well.(Wuhan is a major production location for BOE,TFT-LCD,and Tianma).81 Elsewhere,in October 2019,Shanghai announced that it would build a new base for the display industry in Jinshan District to promote cluster-type development with upstream and downstream industries and establish the Shangha

152、i New Display Process Research Center as one of Shanghais innovation platforms.Government subsidies are omnipresent in China,and more than 99 percent of listed firms in the country received direct government subsidies in 2022.In fact,Chinese industrial subsidies added up to about$245 billion,or 1.73

153、 percent of Chinese gross domestic product(GDP)in 2019.82 And the display industry has been one of Chinas largest recipients of government subsidies:One author noted that“the scale of the Chinese governments subsidies for the display industry is staggering.”83 Indeed,China has supported the growth o

154、f its LCD and OLED industry through generous government subsidies and reduced taxes to domestic display manufacturers.84 From 2010 to 2021,BOE received a total of$3.9 billion in subsidies from the government;thats an average of$325 million in subsidies annually.In 2023,BOE received 3.8 billion yuan

155、in subsidies($532 million)which was more than the companys 2.5 billion yuan($350 million)in profits for the year.85 BOE is regularly among the top 10 annual recipients of Chinese INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 22 government subsidies,ranking seventh,for instance,in

156、2021.86 Meanwhile,BOEs top shareholder is a fund owned by the Beijing city government.Provincial-level(or local-level)subsidies play an important role and flow directly into Chinese display makers ability to construct new fabs.For instance,BOEs aforementioned new B16 plant in Chengdu is to be operat

157、ed by a joint venture that is 53 percent owned by BOE,with the remainder held by state-owned entities.The Chengdu regional government covered an estimated 30 percent of the funds to build the plant.87 Overall,local government subsidies in China for building a display facility can be as high as 85 pe

158、rcent of the costs.88 One reason financial subsidies(and the cheap financing provided by Chinese banks)matter is that depreciation can make up 30 to 40 percent of the cost of producing an LCD panel.As Shih explained:For a 6.7 inch high definition OLED display like one that might be used on a smartph

159、one,estimated production costs in Korea are$62 which include$28 for materials,and$34 for labor and overhead,which includes the depreciation.Chinese suppliers have been pricing this display at$20$23,which would only be possible if you didnt have to factor in capital costs.89 Overall,local government

160、subsidies in China for building a display facility can be as high as 85 percent of the costs.Broadly,China provides 50 to 70 percent of investment costs for Chinese display makers through equity investments,cash benefits,and discounts on loans,land,and infrastructure.China also provides a selling pr

161、ice subsidy of 5 to 15 percent(normally when a panel maker sells a product to the original equipment manufacturer(i.e.,the TV maker).China also provides talent recruitment subsidies of up to 100 percent and supports annual salaries when display manufacturers hire personnel with masters/doctors degre

162、e from overseas.The Chinese government also ensures attractive financing to the sector,providing capital at zero or low interest rates.Companies in the sector are also eligible for reduced corporate tax rates of as low as 15 percent.90 Display makers are further entitled to a one-time reward of$85.7

163、 million if they reach a revenue of$857.2 million.91 Chinas massive subsidization of the display industry has both led to overcapacity in the sector and driven down prices to an extent damaging for firms that dont receive such massive subsidies and have to earn market-based rates of return.As the U.

164、S.Department of Commerce explained:In summary,Chinese companies hold a significant share of the global production of LCDs.Buttressed by Chinese government non-market policies and practices,Chinese firms dominate the industry while their competitors struggle to compete with their artificially low-pri

165、ced products.Since displays are important in other sectors,lack of manufacturing diversity may increase supply chain risks in other product areas outside of ICT.92 Chinese overcapacity has driven competitors out of the business and/or precluded new competitors from entering.Japanese firms ceased all

166、 investments for LCD larger than 8Gen as of 2010.In March 2024,Sharp announced it would close its Gen 10 LCD factory,which one INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 23 industry analyst noted“would hasten FPD display industry consolidation and further strengthen Chinas TC p

167、anel suppliers.”93 Chinese theft of foreign IP in the display industry has been rampant.In July 2023,Koreas Supreme Court found a dozen executives and employees of Toptec,a key input supplier to the display industry,guilty of leaking key technological assets to BOE.In July 2024,a former Samsung engi

168、neer was sentenced to six years in a South Korean prison for leaking 340 billion won($24.5 million)worth of OLED technology secrets to China.94 In October 2023,the U.S.International Trade Commission(USITC)announced it would begin an investigation into allegations that several Chinese electronics com

169、panies stole trade secrets related to OLED display technology from Samsung Display.95 USITC identified eight Chinese respondents in the case so far,including major display maker BOE Technology Group as well as several BOE subsidiaries.In short,Chinas display sector has benefitted greatly from innova

170、tion mercantilism.WHAT SHOULD AMERICA DO?As noted,the United States no longer has consumer electronics industry commercial-scale domestic LCD or OLED production capabilities.(It does have smaller players serving niche markets such as defense.)To recreate one,the United States would need to introduce

171、 an industrial policy on the scale of what China has implemented,which is unlikely to happen.Nevertheless,there are steps U.S.policy could take.NetFlex is one of Americas 18 institutes of manufacturing innovation focused on advancing Americas hybrid electronics technology base.96 While display is no

172、t one of its 11 manufacturing technology roadmaps continuously updated by its Technical Working Groups,it does provide technology platform demonstrators for sectors such as automotive.There is a niche OLED manufacturing community in the United States(e.g.,for defense electronics),and NetFlex could b

173、e attuned to supporting the countrys innovation and technology development needs.Congress could also consider establishing a new Manufacturing USA Institute more specifically tailored to next-generation display electronics,such as microdisplays.Chinese government policy has been foundational and ind

174、ispensable to the growth of the Chinese display industry,and the experience shows that industrial policy can indeed artificially manufacture“comparative advantage”for nations advanced-technology industries.U.S.government agencies could further assist allied nations companies combating Chinese IP the

175、ft in the sector.For instance,in 2023,Samsung filed suit against BOE in the Eastern District Court of Texas,citing infringement on its edge panel technology for smartphones.Further,as noted,Samsung sued BOE for trade secret misappropriation before USITC in November 2023.97 Where appropriate,U.S.enti

176、ties could file amicus briefs on Samsungs behalf in these cases.Moreover,U.S.government agencies should be working with counterparts in allied nations to more effectively exchange information about Chinese industrial espionage activities and push back against them.98 As its clear that Chinese displa

177、y companies such as BOE are benefitting from Chinese innovation mercantilist practices that include IP theft and subsidization,its appropriate USITC be investigating whether Chinese display products entering U.S.markets are benefitting from pilfered IP or unfair trade INFORMATION TECHNOLOGY&INNOVATI

178、ON FOUNDATION|SEPTEMBER 2024 PAGE 24 practices such as excessive government subsidies.To this end,its laudable that in November 2023 USITC initiated a“Section 337 Investigation of Certain Organic Light-Emitting Diode Display Modules and Components Thereof.”99 In 2023,the U.S.and South Korean governm

179、ents launched the“U.S.-ROK Next Generation Critical and Emerging Technologies Dialogue,”which committed to collaborating,“in strategic technologies that will be of greatest consequence to bolstering economic prosperity;enhancing resilience against supply chain disruptions;and securing competitive ad

180、vantages for our two nations and like-minded partners.”100 Within this framework,a working group could be established whose agenda items could include information sharing on supply chain trends and non-market practices in the display industry,potential ways to protect the display industry from unfai

181、r competition,and the promotion of cooperation and investments in display technologies in the United States and South Korea.The vehicle for this could be a bilateral initiative such as the U.S.-Korea Supply Chain and Commercial Dialogue or perhaps a trilateral initiative such as the U.S.-Japan-ROK B

182、usiness Dialogue.101 CONCLUSION In summary,China has become a major player in the global display industry.It has clearly wrested leadership in the global LCD sector away from other nations,increasing its global share of LCD production from nothing in 2004 to 72 percent by 2024.Likewise,Chinese compa

183、nies surpassed South Korean ones for the first time in 2024 as the leading OLED manufacturers,capturing more than half the market.While Korean companies maintain a lead at the cutting edge of LED technologiesnotably in MiniLED and MicroLED technologiesChinese competitors are increasingly innovative

184、and catching up fast in that market segment as well.Chinese government policy has been foundational and indispensable to the growth of the Chinese display industry,and the experience shows that industrial policy can indeed artificially manufacture“comparative advantage”for nations advanced-technolog

185、y industries.Chinas strategy of massive industrial subsidization,rampant IP theft,and helping its companies achieve scale production efficiencies through access to a large domestic market have certainly reshaped the dynamics of the global display industry.Its yet another advanced-technology industry

186、 where China has transformed from being a bit player to on the cusp of being the global innovation leader.INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 25 Acknowledgments ITIF wishes to thank the Smith Richardson Foundation for supporting research on the question,“Can China Innova

187、te?”Other reports in this series cover artificial intelligence,biopharmaceuticals,chemicals,electric vehicles and batteries,nuclear power,quantum computing,robotics,and semiconductors.(Search#ChinaInnovationSeries on itif.org.)The author wishes to thank Rob Atkinson,Leah Kann,Meghan Ostertag,and Vic

188、tor Vernick for their assitance with this report.Any errors or omissions are the authors responsibility alone.About the Author Stephen Ezell is vice president for global innovation policy at ITIF and director of ITIFs Center for Life Sciences Innovation.He also leads the Global Trade and Innovation

189、Policy Alliance.His areas of expertise include science and technology policy,international competitiveness,trade,and manufacturing.About ITIF The Information Technology and Innovation Foundation(ITIF)is an independent 501(c)(3)nonprofit,nonpartisan research and educational institute that has been re

190、cognized repeatedly as the worlds leading think tank for science and technology policy.Its mission is to formulate,evaluate,and promote policy solutions that accelerate innovation and boost productivity to spur growth,opportunity,and progress.For more information,visit itif.org/about.ENDNOTES 1.Kin

191、Eun-Jin,“Chinas“Big 2”Expected to Dominate Global LCD Market with Combined 52%Share by 2027,”Business Korea,August 20,2024,https:/www.businesskorea.co.kr/news/articleView.html?idxno=223348.2.Becky Roberts and Joe Svetlik,“Mini LED TV:everything you need to know about OLED TVs premium rival,”What Hi*

192、Fi,April 18,2024,https:/ Empson,“Ive seen Samsungs conventional-sized Micro LED TV and Im convinced it could kill OLED,”What Hi*Fi,September 5,2024,https:/ be sure,MicroLED technology is expensive:a 110-inch Micro LED TV currently costs about$190,000,but as with these other technologies,costs will c

193、ome down over time as manufacturing processes are refined and the products are produced at scale.3.“Display Market Size|Share and Trends 2024 to 2034,”Precedence Research,August 2024,https:/ Display Market Worth$18.51 Billion,Globally,by 2031-Exclusive Report by The Insight Partners,”The Insight Par

194、tners,September 3,2024,https:/ Haynes,“Chinese Manufacturers Now Have Almost 3/4s Of Flat Panel Display Market:DSCC,”Sixteen:Nine,February 26,2024,https:/www.sixteen- TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 26 6.Yoo Ji-han,Lee Hae-in,and Kim Seo-young,“China overtakes S.Korea in OLED ma

195、rket for 1st time,”The Chosun Daily,August 12,2024,https:/ of Commerce and U.S.Department of Homeland Security,“Assessment of the Critical Supply Chains Supporting the U.S.Information and Communications Technology Industry,”February 2022,https:/www.dhs.gov/publication/assessment-critical-supply-chai

196、ns-supporting-us-ict-industry.8.Willy Shih,“How Did They Make My Big-Screen TV?A Peek Inside Chinas Massive BOE Gen 10.5 Factory,”Forbes,May 15,2018,https:/ Ezell,“How Innovative Is China in Semiconductors?”(ITIF,August 2024),https:/itif.org/publications/2024/08/19/how-innovative-is-china-in-semicon

197、ductors/.10.Sandra Barbosu,“Not Again:Why the United States Cant Afford to Lose Its Biopharma Industry”(ITIF,February 2024),https:/itif.org/publications/2024/02/29/not-again-why-united-states-cant-afford-to-lose-biopharma-industry/.11.J.B.Johnson,“A Low Voltage Cathode Ray Oscillograph”Journal of th

198、e Optical Society of America Vol.6,Issue 7(1922):701712,https:/doi.org/10.1364/JOSA.6.000701.12.Sarah Pruitt,“Who Invented Television?”History,March 12,2024,https:/ Hoover,“Tech Wars:RCA and the Television Industry,”American Business History Center,February 5,2021,https:/americanbusinesshistory.org/

199、tech-wars-rca-and-the-television-industry/.15.Steven Klepper,Experimental Capitalism:The Nanoeconomics of American High-Tech Industries(Princeton University Press:2015);Serguey Braguinsky et al.,“Mega Firms and Recent Trends in the US Innovation:Empirical Evidence from the US Patent Data”(working pa

200、per,no.w31460,National Bureau of Economic Research,2023),https:/www.nber.org/papers/w31460.16.Robert D.Atkinson and Michael Lind,Big Is Beautiful:Debunking The Myth Of Small Business(MIT Press,2018).17.Douglas Frantz and Catherine Collins,Selling Out:How We Are Letting Japan Buy Our Land,Our Industr

201、ies,Our Financial Institutions,And Our Future(Contemporary Books,1990),9091.18.Barbosu,“Not Again:Why the United States Cant Afford to Lose Its Biopharma Industry.”19.“VIZIO:About Us,”https:/ Electronics:Our Company,”https:/ of Commerce and U.S.Department of Homeland Security,“Assessment of the Crit

202、ical Supply Chains Supporting the U.S.Information and Communications Technology Industry.”21.“The output value of Chinas new display industry exceeds 490 billion yuan,”Retop Led Display Co.,Ltd.,https:/ compiled from:Omdia,“OLED and LCD Supply Demand&Equipment Tracker,”July 22,2024,https:/ Shih,“Sup

203、ply Chain Disruptions Should Remind Leaders to Keep Up With Allies,”Forbes,May 1,2023,https:/ Seo-young,“China overtakes S.Korea in OLED market for 1st time.”INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 27 26.Omdia,“Chinese panel makers dominate 98-/100-inch TVs panel market boos

204、ting Chinas TV sector,”news release,July 9,2024,https:/ provided by ADC.(Note:Total does not sum to 100 percent.)29.Stacy Wu,“Chinese manufacturers have risen to dominate the auto display market,holding a 45%market share in 1H23,”Omdia,https:/ Did They Make My Big-Screen TV?A Peek Inside Chinas Mass

205、ive BOE Gen 10.5 Factory.”32.Shih,“Supply Chain Disruptions Should Remind Leaders to Keep Up With Allies.”33.DSCC,“DSCC Raises Capex Outlook as OLED Manufacturers Respond to Rising Demand with More Capacity,”news release,August 5,2024,https:/ Did They Make My Big-Screen TV?A Peek Inside Chinas Massi

206、ve BOE Gen 10.5 Factory.”35.“BOE to build a$8.8 billion flexible IT AMOLED production line in Chengdu,”OLED-Info,November 29,2023,https:/www.oled- 8.6 OLED factories for IT applications drive a flat panel display equipment recovery of 154%in 2024 and stabilize the market in future years,”February 5,

207、2024,https:/ Tabeta,“Chinas BOE chases South Korean rivals in OLEDs with new factory,”Nikkei Asia,May 28,2024,https:/ Did They Make My Big-Screen TV?A Peek Inside Chinas Massive BOE Gen 10.5 Factory.”39.Stock photo licensed from iStock:“Line conveyor assembly televisions stock photo,”Stock photo ID:

208、849897082,https:/ Eun-Soo,“Can Korea fend off China in display race?”KoreaJoongAng Daily,February 15,2024,https:/ Seo-young,“China overtakes S.Korea in OLED market for 1st time.”42.Ibid.43.“Chinese companies attend worlds leading display show in US,”Xinhua,May 15,2024,https:/ Yan,“Chinese innovation

209、 leads global display market,”China Daily,January 12,2024,https:/ Shenyoujia,“Chinese innovations shine at worlds leading display show,”Belt and Portal News,May 25,2023,https:/ innovations shine at worlds leading display show,”Xinhua News Agency,May 25,2023,https:/ TECHNOLOGY&INNOVATION FOUNDATION|S

210、EPTEMBER 2024 PAGE 28 47.Li Mingmei and Fan Feifei“China firms grab spotlight at CES,”China Daily,January 19,2024,https:/ Zhu,“Chinese display makers shine at global show,”May 16,2024,China Daily,https:/ Annual Report 2022,”1517.50.Argam Artashyan,“The 50 Smartest Companies In The World(2019):MIT,”B

211、izChina,July 1,2019,https:/ innovations shine at worlds leading display show.”52.Yan,“Chinese innovation leads global display market.”53.Image credit:Luke Baker,“Honor Magic V2 RSR Porsche Design Review,”Trusted Reviews,February 14,2024,https:/ Commission(EC),“The 2023 EU Industrial R&D Investment S

212、coreboard”(EC,2023),https:/publications.jrc.ec.europa.eu/repository/handle/JRC135576.55.Economics of Industrial Research and Innovation,“EU Industrial R&D Investment Scoreboard(World 2500),”European Union,https:/iri.jrc.ec.europa.eu/data.56.Ibid.57.National Science Foundation,“Publications Output:U.

213、S.Trends and International Comparisons,”October 2021,https:/ncses.nsf.gov/pubs/nsb20214/technical-appendix.58.World Intellectual Property Organization(WIPO),“IP Facts and Figures,”March 2024,https:/www.wipo.int/en/ipfactsandfigures/patents.59.World Intellectual Property Organization,“Intellectual Pr

214、operty Statistics,”2022,https:/www.wipo.int/web/ip-statistics.60.BOE,“About Us,”https:/ Annual Report 2022,”March 31,2023,1415,https:/ joins hands with its partners to make a big debut at the Shanghai Auto Show with“screen power”leading the smart cockpit vane,”DoNews,April 19,2023.65.BOE,“BOE Annual

215、 Report 2022,”1517.66.Ibid.67.TCL,“Chinas power in the wave of globalization”,2023,http:/ Report 2021,”December 31,2021,3,https:/ Annual Results,”March 2023,https:/ Wins Four Prestigious 2022-2023 EISA Awards Including Premium Mini LED TV Award,”TCL,news release,August 19,2022,https:/ Technology Ass

216、ociation(CTA),“CES 2023 Innovation Awards,”(CTA,2023),https:/www.ces.tech/innovation-awards/honorees.aspx.INFORMATION TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 29 72.Photo licensed under the Creative Commons Attribution-Share Alike 4.0 International license,https:/commons.wikimedia.org/wi

217、ki/File:TCL_2.jpg.73.Joe Lindsey,“Whats the Difference Between OLED and QLED TVs?”Popular Mechanics,March,3,2020,https:/ OLED,“Ultra thin and light!TCL Huaxing launches the first tablet OLED,”March 2,2023,https:/ Insights by GreyB,“TCL Patents Key Insights and Stats,”March 22,2024,https:/ Announces

218、New Research&Development Center in Poland,”September 3,2018,https:/ Sohee,“Display Industry Promotion Policies in China,”Korea Institute for Industrial Economics and Trade Research Paper No.21/IER/26/1-4,Vol.26 No.1(2003),https:/ Bickenbach et al.,“Foul Play?On the Scale and Scope of Industrial Subs

219、idies in China”(KIEL Institute for the World Economy,April 2024),https:/www.ifw-kiel.de/fileadmin/Dateiverwaltung/IfW-Publications/fis-import/bc6aff38-abfc-424a-b631-6d789e992cf9-KPB173_en.pdf.83.Brian J.Cavanaugh,“What Chinas Dominance in Electronics Manufacturing Means for U.S.National Security,”T

220、he National Interest,August 12,2024,https:/nationalinterest.org/feature/what-chinas-dominance-electronics-manufacturing-means-us-national-security-212290.84.Shuhei Ochiai,“Subsidized Chinese Makers Squeeze Asias LCD Industry,”Nikkei Asia,April 21,2019,https:/ 85.Shunsuke Tabeta,“Chinas BOE chases So

221、uth Korean rivals in OLEDs with new factory,”Nikkei Asia,May 28,2024,https:/ Kawase,“Made in China 2025 thrives with subsidies for tech,EV makers,”Nikkei Asia,July 22,2022,https:/ Korea fend off China in display race?”88.Shih,“Supply Chain Disruptions Should Remind Leaders to Keep Up With Allies.”89

222、.Ibid.90.BOE,“Interim Annual Report 2024,”https:/ Korea fend off China in display race?”92.U.S.Department of Commerce and U.S.Department of Homeland Security,“Assessment of the Critical Supply Chains Supporting the U.S.Information and Communications Technology Industry.”93.Linda Lin,“Display Dynamic

223、s May 2024:Sharp will restructure its display fabs in Japan in September 2024,”Omdia,May 30,2024,https:/ TECHNOLOGY&INNOVATION FOUNDATION|SEPTEMBER 2024 PAGE 30 94.Charlotte Trueman,“Former Samsung engineer receives six year prison sentence for leaking tech giants secrets to China,”Data Center Daily

224、,July 22,2024,https:/ Kale,“USITC Launches Investigation Into OLED Display Technology Theft,”Display Daily,December 1,2023,https:/ Us,”https:/www.nextflex.us/about/.97.Eun-Soo,“Can Korea fend off China in display race?”98.Stephen Ezell,“An Allied Approach to Semiconductor Leadership”(IITF,September

225、2020),https:/itif.org/publications/2020/09/17/allied-approach-semiconductor-leadership/.99.United States International Trade Commission,“Section 337 Investigation of Certain Organic Light-Emitting Diode Display Modules and Components Thereof,”news release,November 30,2023,https:/www.usitc.gov/press_

226、room/news_release/2023/er1130_64620.htm.100.The White House,“JOINT FACT SHEET:Launching the U.S.-ROK Next Generation Critical and Emerging Technologies Dialogue,”December 8,2023,https:/www.whitehouse.gov/briefing-room/statements-releases/2023/12/08/joint-fact-sheet-launching-the-u-s-rok-next-generat

227、ion-critical-and-emerging-technologies-dialogue/.101.U.S.Department of Commerce,“Joint Readout:United States-Korea Supply Chain and Commercial Dialogue Ministerial Meeting,”June 27,2024,https:/merce.gov/news/press-releases/2024/06/joint-readout-united-states-korea-supply-chain-and-commercial-dialogue.