Panel sector on moving manufacturing to US: Taiwan's top two firms uninterested, JDI leads the way
Rebecca Kuo, Taipei; Charlene Chen, DIGITIMES Asia
Tuesday 29 April 2025
The US government has called on the display industry to establish production domestically. However, Taiwan's leading panel manufacturers have expressed no interest in relocating. In contrast, Japan Display (JDI) is actively planning a new OLED display factory in the US through collaboration with OLEDWorks, potentially becoming the only production site outside Asia utilizing the latest OLED technology.
Regarding the move toward "Made in America," Innolux chairman Jim Hung stated that the company has evaluated the possibility of building a plant there. Taiwan remains a manufacturing powerhouse, and he noted that besides the difficulty of relocating panel production lines, ecosystem challenges also make it unlikely for Innolux to shift front-end production to the US at this time.
AUO(2409.TW) chairman Paul Peng commented that panels are components, and most downstream product assembly occurs in Asia. Under these circumstances, AUO currently does not consider establishing factories in the US because producing in the US and then shipping back to Asia for assembly would be illogical.
The decisions by Taiwan's top two panel makers reflect the current state of the LCD industry, whereas JDI approaches from an OLED industry perspective, highlighting fundamental differences between the companies' strategies.
In February 2025, JDI officially announced its strategic investment in OLEDWorks. The partnership will leverage JDI's OLED technology and production know-how to build an OLED R&D center and production line in the US.
Raymond Sun, CEO of JDI Taiwan, a wholly owned subsidiary of JDI, told DIGITIMES in an exclusive interview that the planned US OLED factory primarily targets niche markets such as automotive, medical, defense, and specialized applications, which differ significantly from consumer electronics market demands.
The project is progressing steadily according to plan. Although the investment amount and partnership structure have yet to be finalized, both parties are engaging in ongoing discussions based on their technical roadmap, supply chain layout, and potential customer needs.
Aligning with the "Made in America" initiative, JDI plans to establish the Americas' sole mass production base equipped with advanced OLED display technology. Sun mentioned that talks are underway with interested stakeholders including automakers, target application customers, and supply chain partners.
Production line strategy for specialized applications
Sun explained that since the targeted applications differ greatly from typical consumer electronics, the US plant will not be designed with large-scale production lines like those for consumer products. Instead, JDI aims to provide a long-term, stable supply of high-value-added application products, adopting a strategy distinct from mainstream large-scale display production lines.
Overcoming supply chain challenges
Sun pointed out that the advanced OLED technology developed jointly with OLEDWorks features simpler product structures compared to TFT display modules, requiring no color filters or backlight units. Additionally, OLED materials have smaller transport volumes, making supply chain integration less complex. This facilitates establishing small- to medium-sized display capacity locally in the US, achieving both technological independence and supply stability.
JDI also plans to collaborate with local US material suppliers and equipment manufacturers to reduce risks and costs associated with long raw material supply chains.
Sun highlighted that OLEDWorks currently operates a small-scale production line in Germany supplying automotive tail light lighting and developing microdisplays, demonstrating viable technology and mass production capabilities that form a foundation for expansion into the North American market.
Future progress depends on the US policy environment, funding arrangements, and integration of customers and supply chains. Particularly in the automotive, medical, and defense sectors, stringent requirements exist for supply chain stability and long-term delivery capability. JDI intends to proceed cautiously with development.
The US imposes a reciprocal tariff of 24% on Japanese imports, currently under a 90-day exemption period. The Japanese government continues negotiations with the US, and JDI maintains close contact with relevant Japanese authorities. Since electronic industry players generally cannot absorb high tariffs, if rates increase, related costs are expected to be passed on or renegotiated, likely unavoidable.
Current order stability amid tariff concerns
When asked whether recent orders and production schedules have been affected by tariffs, Sun said orders remain normal and capacity follows original plans. The main factor is the long lead time for display materials, preventing rapid supply chain adjustments.
Even with urgent order demand, significant production changes or inventory increases within 90 days are difficult, limiting opportunities for short-term gains.
Article edited by Jack Wu
digitimes.com |
