BOE's suppliers saw their profits decline by 36.9% last year.

LX Semicon is accelerating its expansion into the OLED display driver IC (DDI) market for the IT industry. Facing declining profitability due to competition from companies like Novatek, coupled with rising memory semiconductor prices expected to lead to a decline in smartphone shipments this year, the company is focusing on dominating the IT market, particularly in sectors like tablets, where demand for DDI is growing.

DDI is a semiconductor used to control individual pixels on the displays of smartphones, TVs, and tablets, enabling clear and vivid images. Samsung Electronics leads the DDI market with a global market share of approximately 30%, followed by Novatek and LX Semicon.

According to data released by financial information company FnGuide on January 20, LX Semicon's operating profit last year was estimated at 105.3 billion won, a 36.9% decrease from the previous year (167.1 billion won). The company believes that increased competition in the smartphone market and declining demand for TVs led to a reduction in the supply of DDI (Direct Digital Interface) for OLED panels, resulting in decreased profitability. "The performance of small and large DDI (Digital Display Interface) devices continues to be sluggish due to declining smartphone market share and shrinking TV demand," said Kim Jong-bae, a securities analyst at Hyundai Motor.

LX Semicon is turning its attention to the IT market, including tablets, where OLED applications are rapidly growing to ensure profitability. As devices like Apple's iPad accelerate their transition from LCD to OLED panels, OLED shipments in the IT market are growing rapidly. According to market research firm UBI Research, global shipments of OLED screens for IT use are projected to increase from 24 million units last year to 53 million units in 2029.

"DDI used in TVs is facing continued negative impacts, including declining demand in the medium to long term and a diversification of the customer base," explained Kang Min-gu, a researcher at IBK Securities. "However, the proportion of OLED in IT products is expected to gradually increase, driving a recovery in profitability."

Due to the impact of rising memory semiconductor prices this year, it is generally believed that the profitability of manufacturers supplying components for products such as smartphones will still take time to improve. The growth of the artificial intelligence (AI) industry has led to a surge in demand for server DRAM, causing supply shortages. This has led to a significant increase in the price of memory semiconductors, including DRAM, which in turn has driven up the list prices of smartphones and PCs.

An industry insider explained, "The price increase of smartphones and PCs this year is a natural progression." He added, "The shipment forecasts in last year's business plans are being revised downwards, and component manufacturers are also facing pressure to lower unit prices."

Intensified competition in the smartphone market is also a concern. Last year, Novatek's DDI shipments were affected by its entry into LG Display's supply chain. LX Semicon diversified its customer base by supplying DDI to companies like BOE, but now that BOE is also sourcing DDI from Novatek, the company is facing pressure to lower shipments and component prices.