SK Materials has decided to establish a joint venture with JNC based in Japan and branch out into OLED material business. JNC possesses key technology to blue OLED material and its patents related to the technology will be transferred to their joint venture. With this decision, SK Materials has prepared an important turning point for South Korea’s OLED material industry that has been dependent on Japan.
SK Materials and JNC have decided to establish a joint venture called “SK JNC (tentative name)”. Both companies held their respective board meetings and agreed to go forward with joint venture. SK and JNC will have a 51% and a 49% stake of joint venture respectively. Joint venture’s headquarters will be set up in South Korea. It is reported that they will invest between $40.5 million (45 billion KRW) and $45 million (50 billion KRW) as initial capital and also build a R&D center and a production plant in South Korea.
SK Materials will branch out into OLED material business through the joint venture. It has been supplying special gas for semiconductors and displays and this is the first time that the company is branching out into OLED material business. Reportedly, the company already finalized a supply contract with a major OLED display company from South Korea.
The reason that SK Material is branching out into the business is due to its growth. OLED display is emerging as the next-generation display due to its excellent quality and thickness and power consumption compared to LCD. Because it can be folded or bent due to its flexibility, it is necessary for innovative devices such as foldable and rollable mobile devices. According to a market research company DSCC, the global market for OLED materials is estimated to grow 23% from 2019 ($951 million) to 2024 ($2.688 billion).
The two companies’ joint venture is expected to be an important milestone for South Korea’s materials industry as JNC’s patents related to blue OLED material will be transferred to their joint venture. Development of blue OLED material is seen as the most difficult task out of all OLED materials. While phosphorescent material with high efficiency is used for red and green colors, fluorescent material with low efficiency is used for blue OLED material. Also, South Korean companies have not been able to enter the global market for blue OLED material as Japanese companies such as Idemitsu Kosan have built tall barrier to entry. As a result, Samsung Display and LG Display have been purchasing blue OLED materials from Japanese companies such as Idemitsu Kosan and Hodogaya Chemical even through they are leaders in the global OLED display market.
SK Materials is now able to internalize and localize blue OLED material through the joint venture. Because JNC possesses key patents on boron family that is seen as a next-generation material, it is expected to assist in preparing an important foundation for SK Materials to grab upper hands in future markets. Their joint venture will target related markets based on SK Materials’ production capacity and business network and patents transferred from JNC. Starting with blue OLED material, it will also develop red and green luminescent materials and expand its business towards all OLED materials such as ETL (Electron Transport Layer) and HTL (Hole Transport Layer).
Staff Reporter Yun, Geonil | benyun@etnews.com