[THE INVESTOR] Despite the challenges that Korean display makers face in the era of fast-following Chinese rivals, Merck Korea Managing Director Glenn Young says that Korea will continue to serve as a strategically important Asian market where the firm’s key customers are located.
“We plan to stay close to our key customers as we need to understand the way each of our key customers use our materials, and that needs to be done strictly and confidentially,” said Young in a press conference held in Seoul on June 26.
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Backed by the government, Chinese display makers, BOE, Tianma and Visionox, have been increasing their presence in the global display market over the past years, investing heavily in OLED.
In the LCD sector, they are considered to have outpaced the Korean duo Samsung Display and LG Display. Due to neck-and-neck competition, LG Display turned to red in the first quarter, and the loss is expected to widen.
Merck recently opened an OLED technology center in Shanghai to better serve its Chinese customers. Some market watchers assumed the latest opening indicated that the German company is trying to shift its strategic OLED hub from Korea to China.
For the past several years, Samsung has been enjoying an overwhelming dominance in the mobile OLED segment while LGD has been taking the lead in the large-sized TV sector.
Samsung’s market share in the smartphone OELD market reaches over 90 percent.
In the face of the changing business environment, he said Merck has recently made adjustments in the business structure by creating a division that oversees the businesses for all types of displays, including LCD and OLED.
“We have a lot of expertise in the area of display and we want to bring all of that expertise to our customers,” he said.
Young said although Korean display makers, including LGD, are facing some difficulties at the moment because of competition, there will be new opportunities as new markets are growing, including those for flexible and automotive products.
Health care, life science, and performance materials are the three main business pillars of the German firm-- they account for 46 percent, 38 percent, and 16 percent in terms of sales, respectively.
The German company, founded in 1668, earned 15.3 billion euros (US$17.90 billion) last year and invested 2.1 billion in R&D. It employees 53,000 worldwide in 66 nations. The Korean market takes up 4.5 percent of Merck’s annual revenue.
By Kim Young-won (email@example.com)