The rapid growth of China's display industry is a result of the government's determination to raise its manufacturing technology to the world's top, not just relying on the huge domestic market of 1.4 billion people. China's display industry has become one of China's leading high-tech industries as a result of the government's intensive promotion of growth-driven industries. This study focused on the background of growth and industrial status of China's fast-growing display industry in a short period of time, and through SWOT analyzer method, the internal and external environment and competitiveness of Chinese display industry were analyzed. Based on this, the main purpose of this study was to present strategies that Korean companies could use for business in China.
The growth process of China's display industry was analyzed step by step, focusing on the trend of scale and weight in the global market. From the early 2000 to 2008, when the fifth-generation TFT-LCD line was first constructed, it was seen as a step to introduce and accumulate technology to pursue Korea and Japan and stabilize the industry. In particular, it was a time when foreign companies aimed to quickly build up their industries and enter the global supply chain through mergers and acquisitions (Korea, Hydis) and technology joint ventures(Japan, Fuji/NEC). From 2009 to 2017, China's display industry grew rapidly. In the field of LCD technology, the company quickly pursued Korea and achieved the world's No. 1 production capacity. During this period, the government's policy support was bold even in the face of oversupply of LCD and uncertainty over future technologies. This was a time when China's unique socialist economic system was well demonstrated. After 2018, it is in the process of upgrading industries and improving quality. And it is the stage of devising and promoting plans to raise the status of industry as a leader, not as a pursuer. An ambitious plan is currently underway to make the display industry the world's No. 1 in line with the direction of development of high-tech industries oriented toward the 13th Five-Year Plan.
In order to conduct in-depth analysis of China's display industry, the main policies of industry, the supply chain status of industry, and the distribution status of major regions were conducted. In particular, specific case analysis was conducted through analysis of representative panel companies and Up-Downstream companies. BOE, CSOT, and Visionox are representative panel manufacturers. However, there are many differences in many ways. Of course, it is the same that they have grown with the support of the central and local governments, but there are differences in the changes in corporate governance, the business portfolio of display and group companies as a whole, the vertical integration of up-downstream companies and the strategy of forming industrial clusters. And we analyzed the level of localization through the analysis of equipment and materials companies.
With the rapid growth of China's display industry, Korean companies are expanding their business in China. So I studied the strategy of enterprise entering the market. First of all, SWOT analysis method was applied to China's display industry to analyze internal and external environment. The internal environment was analyzed by dividing it into strengths and weaknesses, Strengths of China's display industry are characterized by the following; 1) the government's strong industrial policy 2) the formation of an industrial supply chain based on a huge domestic market 3) the expansion of government and private investment in high-tech industries 4) abundant research personnel in science and technology. Weakness factors are : 1) The high external dependence of the upstream industry represented by equipment and materials 2) the high debt rate of the company and the Moral Headgear prevalence of managers. The analysis of external environment was divided into opportunity and threat factors. Opportunity factors include: 1) Extended expansion of emerging markets by Chinese Set-makers such as TCL, Skyworth and Xiaomi. This has expanded opportunities for display-related companies to enter overseas markets. 2) The Chinese market is the largest market in the global display industry (3) The government's localization policy and the expansion of the capital market in China have a high potential for growth of domestic manufacturing companies. Threat factors include: 1) Deteriorated profitability of LCD manufacturing companies due to excessive investment 2) Rapid expansion of trade protectionism 3) Increase in manufacturing costs due to rapid increase in unit labor costs of manufacturing companies, 4) Rapidly changing manufacturing environment
Matrix response strategy was derived by combining internal and external environmental factors of China's display industry with internal capabilities of Korean companies. The S-O strategy is as follows; 1) entering the supply chain of set companies that have built factories outside of China 2) The development of joint models utilizing the Chinese government's policies and capital markets. The W-O strategy is as follows; 1) Establishing a local cooperative system for post-processes and parts and materials 2) Establishing a systematic management system for local manpower. The S-T strategy is as follows; 1) Expanding technology applications and strengthening intellectual property rights 2) Using a strategy to strengthen security and widen technology gaps for leading technologies. The W-T strategy is as follows; 1) Strengthening competitiveness by expanding cooperation among domestic companies. 2) Pursuing manufacturing innovation by converging technologies of the fourth industrial revolution.
Finally, I suggested the future development strategy of the Koreanvdisplay industry. It is as Follows; 1) to innovate structure and strengthen competitiveness of Korean display industry. in order to achieve, the expansion of the national R&D support system, establishing a system in which high-quality manpower can flow smoothly into small and medium-sized enterprises. 2) companies should actively respond to changes in the global value chain (GVC). 3) it is a strategy to enter China's supply chain using financial technology. Korean companies need to increase cooperation with Chinese companies by utilizing financial techniques such as M&A, J/V, and equity investments. and based on this, they need to use market entry and exit strategies using capital markets in China. 4) we need to expand cooperation between Korean and Chinese businesses by Coopetition concept.