The government will provide approximately 40 billion won in research and development (R&D) support to help the domestic display industry maintain its super gap competitiveness. With fierce competition from China, the aim is to enhance the technology level in areas such as organic light-emitting diode (OLED) and inorganic light-emitting displays, thus laying the groundwork for domestic corporations to lead the next-generation display market.
According to the government on the 7th, the Ministry of Trade, Industry and Energy has recently initiated a new call for support in the display sector R&D. The support targets include not only small and medium-sized enterprises and large corporations but also universities and research institutes.
The scale of support is differentiated based on the type of R&D projects, such as core technology and innovative product types. Since 'core technology' generally refers to innovative and new technologies developed independently and not derived from existing technologies, the proportion of support for core technology R&D is larger.
Specifically, for core technology R&D, up to 50% of the expense will be supported for large corporations. Medium-sized enterprises can receive up to 70%, while small businesses can receive up to 75%. The support ratios for innovative product types are 33% for large corporations, 50% for medium-sized enterprises, and 67% for small businesses. Universities and research institutes can receive 100% support regardless of project type.
The Ministry of Trade, Industry and Energy has allocated a budget of 38.766 billion won for support in the display sector. There are 40 types of projects, including ▲ development of inorganic light-emitting display technology and ecosystem establishment ▲ development of ultra-realistic light field display technology based on ultra-high definition AMOLED ▲ development of OLED technology for extreme environments for next-generation mobility ▲ development of micro display technology for the metaverse. The R&D period varies from 1 to 4 years for each project.
The government's move to support the display industry comes against the backdrop of 'China's fierce pursuit.' For instance, in September of last year, market research firm DSCC projected that Chinese display corporation BOE would surpass Samsung Display in the flexible OLED market by capturing 24-26% market share by 2028. It also forecast that Chinese Visionox would rise to third place in the flexible OLED market with a 14% share by 2028.
A Ministry of Trade, Industry and Energy official said, 'The market share of Korean corporations in the OLED sector stands at 74% as of 2023, maintaining a significant lead over China,' adding, 'As the display market is expected to grow further, we aim to solidify our advantage through not only tax support but also R&D support.'
Additionally, the Ministry has decided to support R&D for seizing the market for uncommercialized extended reality (XR) with a budget of 2.7 billion won. The main support project is the development of advanced XR devices and integrated technology for spatial computing. The support conditions are the same as for the display sector.
A Ministry of Trade, Industry and Energy official noted, 'Currently, XR devices are predominantly manufactured by big tech companies such as Meta and Apple, and there are no domestic corporations that have launched products yet,' adding, 'The goal is to produce domestically manufactured devices with participation from corporations across all sectors, including device components, XR content, and services.'
The government plans to select support targets and sign agreements in April and May, after which subsidies will be advanced based on the established R&D budget. This year, support will cover 9 months, excluding January to March, while from next year, all support will be provided in January for the entire year. However, if the technology development leads to business results, corporations receiving subsidies must pay a certain percentage of sales generated from the technology as 'royalties' to the government. The Ministry has set the royalty caps at 10%, 20%, and 40% of government support subsidies for large corporations, medium-sized enterprises, and small businesses, respectively.