Global material companies are hesitating to invest to Korean market, a stronghold of global leading display companies. The cooperative relationship at R&D level is actively sustained, but their investment plan for production of materials are not examined. The reason is that demand is not forecast to be consistent and the competition against domestic companies are getting bitter.

According to the industry on Feb.24, global display material companies are reluctant to mass produce in Korea. The competitiveness to labor environment like personnel expenses declined sharply. Above all, the sustainable growth in domestic display industry is no longer collateralized.

But these material companies make still aggressive investment in material production factories for semiconductors.

Through its massive investment, Japanese TOK Advanced Materials Co., Ltd. set up the factory in Songdo, Incheon. All products are materials for semiconductors. The entire quantities of materials related to display such as OLED 176 are produced in Japan.

An executive of this company said, "There is no plan to mass produce materials for display in Korea.""As the demand is not only unmarketable, but also return of investment is difficult. Above all, the competition is too tough. So, we don`t prefer the production in Korea."

Another OLED material company is hesitating even R&D with a Korean company. The main reason is to concern technology leakage.

"During our information exchange with a Korean display company, this company already betrayed our trust several times through its leakage of our information to other subcontractor," the insider of this company disclosed.

And due to characteristics in this industry, global material companies carry out their businesses in the long term point of view. They invest in businesses which can be sustainedly continued for several decades.

But due to Chinese companies` recent chase, the crisis theory is spreading out in domestic display industry. As the speed of Chinese and Taiwanese companies` encroachment on domestic market becomes expeditious, the investment attraction to domestic market is also falling down.

The expert of this industry pointed, "How domestic companies can sustain the competitiveness in display industry will come into important variable to investment by global material companies." "As an emerging country like China and India, in order to raise preference of investment, government`s diversified efforts as well as those of companies are also needed."

Staff Reporter Sung,Hyun-hee sunghh@etnews.com