[Future Materials and Components Dependency] "The Reality Behind Korea's Display Powerhouse... 0% Localization Rate for Liquid Crystals and Color Filters"

Localization Rate for Liquid Crystals, Color Filters, and Glass Substrates at 0%
Heavy Reliance on Imports for Key OLED Materials
Micro LED Localization Rate Below 10%

Although South Korea's display industry leads the global market, the localization rate of core components remains low. For basic materials such as liquid crystals and color filters, the localization rate is 0%, and for key components of next-generation technology like micro light-emitting diodes (Micro LED), most localization rates are below 10%.

According to data submitted by the Ministry of Trade, Industry and Energy at the request of Assemblyman Lee Jaegwan of the Democratic Party of Korea on October 7, 2025, as of 2023, the localization rate for major items in the display industry was 0% for liquid crystals, color filters, glass substrates, and backlight units; less than 5% for precision metal masks used in organic light-emitting diodes (OLED); and less than 10% for RGB light-emitting elements and transfer process equipment in micro light-emitting diodes.

In the liquid crystal display (LCD) sector, the localization rate for liquid crystal materials was 0%, with total reliance on overseas sources. Color filters, glass substrates, and backlight units also had a 0% localization rate, meaning all were imported. Polarizers achieved a 100% localization rate from 2022 to 2023, but in 2024, reliance on overseas sources returned to 100%. For manufacturing equipment, exposure equipment was 100% dependent on foreign suppliers, while etching and inspection equipment had a 100% localization rate. The localization rate for driver integrated circuits was also found to be 100%.

The OLED sector showed significant variation by item. Among light-emitting organic materials, the localization rate for hosts was high at 95%, but for dopants, it was only 33%, with 67% imported. The localization rate for precision metal masks was less than 5%, meaning over 95% were sourced from overseas.

The localization rate for transparent adhesive layers was less than 10%, and for deposition equipment, less than 20%. In contrast, encapsulants and protective films had a localization rate of over 95%, and inspection equipment and driver integrated circuits achieved 100% localization. The thin-film transistor (TFT) backplane had a localization rate of 85%.

In the micro light-emitting diode (Micro LED) sector, reliance on overseas sources was even more pronounced. The localization rate for RGB light-emitting elements was less than 10%, and for transfer process equipment, also less than 10%. The backplane had a localization rate of 20%, while encapsulants and optical components had a localization rate of less than 5%, indicating near-total dependence on imports. Inspection and calibration equipment also had localization rates below 10%. Among these, only driver integrated circuits achieved a 100% localization rate, with all production taking place domestically.

The industry has expressed concerns about this reliance on overseas sources. A supply chain concentrated in specific countries can significantly disrupt the domestic production base, depending on price and supply volume. An industry insider stated, "With the localization rate for core components remaining at 0-20%, it is difficult to guarantee a stable production base. Without self-sufficiency in materials and equipment, the competitiveness of the display industry will inevitably weaken."

The government is promoting large-scale research and development and investment to foster materials, components, and equipment. Some strategic items, such as organic materials and inspection equipment, have shown results, but there remains a significant gap for basic materials like liquid crystals and color filters, as well as for micro light-emitting diode transfer processes. Experts point out that unless supply chains are diversified and long-term technological development is pursued in parallel, it will be difficult to maintain a strong position in the global market.

Yonhap News Agency