A new display technology called OLED (organic light-emitting diode) is on the rise, increasingly replacing LCD (liquid crystal display) to make smartphone and television screens. Now, China is seeking to dominate the OLED industry by fair means or foul.
On June 27, South Korean prosecutors announced that it indicted seven individuals—six Korean nationals and one Chinese national surnamed Li—for violating South Korea’s Industrial Technology Protection Act while attempting to pass on core OLED technology to an unnamed Chinese OLED company, according to South Korean news site Aju News. Three individuals, including Li, were arrested and detained.
Kwon is a researcher working for an unnamed South Korean company that has business partnerships with Samsung Display, the sole provider of OLED displays for Apple’s iPhone X, according to technology news site CNet. Li, who was working for the Chinese OLED company, approached Kwon with a job offer that would pay three times his current salary—if Kwon would steal and bring back some critical information about OLED technology, according to Aju News.
With the help of a few co-workers, Kwon successfully transferred about 5,130 documents on OLED to the Chinese company from August 2017 to February 2018.
Last month, while Kwon was on his way to China, he was arrested by intelligence officials at an airport in South Korea. Li, who was traveling with Kwon, was also arrested.
According to Aju News, OLED technology is one of South Korea’s largest exports. In 2017, the country’s total export value topped $27.3 billion, of which OLED made up 34 percent, reaching $9.22 billion. Samsung Display had a record year in sales revenue in 2017, reaching about $4.85 billion, mostly from sales of OLED products. In the global smartphone OLED panel market, Samsung has a near monopoly.
China’s OLED Ambition
China’s domestic OLED industry is still limited. According to Aju News, none of the major smartphone makers around the world get their OLED supply from Chinese sources. Additionally, Chinese companies only have the capability to manufacture rigid OLED display screens and have yet to develop technology for flexible OLED display screens that can be bent, which have greater application in smart devices and gadgets.
Chinese manufacturers also have not yet developed the technology to produce large OLED panels for TV screens.
As a result, Chinese companies have been dangling lucrative salaries for South Korean OLED professionals, in an attempt to lure away talent who can accelerate China’s OLED development.
A June 8 article posted on the official website of China Semiconductor Association (CSIA), a trade organization, reported that Samsung Display’s latest QD-OLED display—an enhanced OLED display using quantum-dot technology to produce more brightness and color accuracy—made it even harder for Chinese display-screen makers to catch up with Samsung and LG, another South Korean conglomerate that is a top maker of OLED products.
According to Aju News, Chinese companies have offered an annual salary of up to 500 million Korean won ($450,000) to senior South Korean professionals in the semiconductor and flat panel display fields, which was about three times higher than the average industry salary in South Korea.
Aju News also reported in June that three principal OLED researchers at Samsung Electronics, the parent company of Samsung Display, quit their jobs this year and took up jobs at BOE Technology, a Chinese OLED maker based in Beijing.
BOE saw its production yield rate of micro-sized OLED display panels improve after it hired a number of South Korean OLED experts, according to Aju News.
In fact, BOE has employed over 100 South Korean professionals, most of them former employees of Samsung Electronics, LG, or SK Hynix, a South Korean maker of DRAM chips, which are a semiconductor building block for telecommunications devices including mobile phones, Aju News said, citing an unnamed source.
BOE Technology Group, founded in 1993 and listed on both the Shanghai and Shenzhen stock exchanges, has slowly risen to become an internationally recognized company in recent years. Its shares doubled and net revenue quadrupled in 2017, compared to the year prior, according to Bloomberg, before its shares took a plunge this year, shedding more than 32 percent as of June 18.
In 2017, BOE became an Apple supplier, manufacturing OLED screens for the latter’s 9.7-inch iPad, reported Taiwanese newspaper China Times. And this year, BOE became one of the flat panel suppliers for Apple’s cheaper models of the MacBook laptops. And according to a June 28 report by Bloomberg, Apple was in talks with BOE in February about the possibility of OLED supplying screens for high-end iPhones.
BOE’s high-tech ambitions caught the eye of the Chinese regime, which is working closely with the firm to recruit overseas Chinese and non-Chinese engineers into the company, including those from the United States.
According to an August 11, 2016, article on the official website of the State-owned Assets Supervision and Administration Commission (a Beijing government agency in charge of state-owned firms), BOE’s party committee will follow the principle of “the [Chinese Communist] Party’s management of talents.” Party committees are set up at all workplaces in China to ensure company policies toe the Party line.
This means hiring staff through the Chinese regime’s recruitment programs, such as the Thousand Talent Plan, which targets science and tech fields China wishes to further develop, as outlined in national policies such as “Made in China 2025.”
Of the company’s approximately 17,000 employees in R&D (research and development), 471 were recruited from abroad, and of those, 45 were recruited from government programs, as of August 2016.
The Thousand Talent Plan was introduced by the central authorities in 2008 to lure promising workers from around the world to work in China. Such programs are a key part of China’s strategy to catch up with and eventually supplant global tech industries.
More than 7,000 top-level Chinese and foreign professionals have been recruited under the Thousand Talent Plan. Chinese nationals returning to China receive a one-time package of 1 million yuan ($151,140), along with guaranteed employment at a university, research institute, or state-owned enterprise.
Local governments in China also have their own versions of talent recruitment programs for overseas Chinese and have their own financial incentive packages to attract overseas talents.
BOE has partnered with government authorities since at least 2011 to recruit staff. A search on the official website of the Beijing government’s office for “overseas Chinese affairs” showed that BOE was looking to hire four overseas Chinese with at least a master’s degree in OLED and related fields in 2011. This year, the company was seeking to fill 18 job openings in several fields, including artificial intelligence, cloud computing, and display technology.
In recent years, authorities in Chaoyang District, the populous area of Beijing where BOE is headquartered, have begun recruiting overseas talents for BOE under its own “Phoenix Program.” In 2016, the Chaoyang government announced on its official website that it recruited 13 people to BOE, including Tong Guanshan, who is currently the company’s senior VP and chief technology officer (CTO). Tong worked for IBM from 2001 until 2016, according to his LinkedIn profile. He served at the global headquarters in multiple positions, including the head of the global R&D department, according to Bloomberg.
In 2014, Pablo Navarrete Michelini, an assistant professor in signal processing from Chile who later served as a senior software engineer for the California-based tech firm Yuvad Technologies from 2011 to 2013, was recruited to China under the same program. He is now a principal researcher at BOE.
The Phoenix Program also successfully recruited Bin Sun in 2012, according to the official website of the Chaoyang Overseas Talent Center, a government office. She was head of BOE’s intellectual property (IP) management center before she took a job as general counsel at Xiaomi, a Chinese cellphone maker, in January 2016, according to her LinkedIn profile. Before joining BOE, Bin was a patent lawyer for the major U.S. law firm Foley & Lardner.