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LG Innotek has struggled to expand its presence in Samsung Electronics’ Chip-on-Film (CoF) market, despite the establishment of a domestic supply chain with PI Advanced Materials and SK Nexilis in 2021. Over the past three years, progress has been minimal, and Stemco, a joint venture between Japan’s Toray Industries (70%) and Samsung Electro-Mechanics (30%), continues to dominate the CoF market for Samsung smartphones. LG Innotek's CoF production line is expected to operate at around 70% capacity this year.

According to industry sources, LG Innotek still supplies CoF components for Samsung's Galaxy A5 series, but Stemco remains the market leader in terms of both total volume and model-specific allocations.

CoF connects the display panel glass substrate to the flexible printed circuit board (FPCB), enabling thinner and more compact devices. Samsung uses CoF in higher-end models of its mid-range Galaxy A series. The 2021 domestic supply chain, part of a government-led localization initiative, involved PI Advanced Materials providing polyimide (PI) film, SK Nexilis supplying flexible copper-clad laminate (FCCL), and LG Innotek manufacturing the CoF.

Before 2021, these materials were sourced entirely from Japan. Although LG Innotek had supplied CoF to Samsung before, 2021 marked the first time it delivered on a large scale, supplying the Galaxy A52 exclusively and sharing the A72 with Stemco.

CoF is part of LG Innotek’s tape substrate division. Production volumes increased from 16.48 million meters in 2019 to 20.51 million meters in 2021, but dropped to 14.49 million meters in 2022, with a slight recovery to 15.56 million meters last year. This reflects a utilization rate of 63% compared to the production capacity of 24.58 million meters.

As of 2024, LG Innotek and PI Advanced Materials continue to supply CoF for Samsung’s Galaxy A5 series, but Stemco remains ahead in both total supply and model-specific allocations.

The lack of progress since 2021 is due to several factors, including reduced momentum behind government-led localization efforts, declining sales of Samsung’s mid-range smartphones, and pricing pressures. Unlike in 2021, this year's Samsung lineup does not include the Galaxy A7 series. Additionally, PI Advanced Materials' acquisition by France's Arkema last year has further distanced the company from the original localization goals.

LG Innotek’s CoF production line, capable of producing 200 million units annually, is expected to operate at around 70% capacity this year. In addition to Samsung, LG Innotek also supplies CoF to Chinese manufacturers like Oppo, Vivo, and Xiaomi. CoF prices range from KRW 300 to 400 per unit, potentially generating KRW 60 to 80 billion in sales from 200 million units. Last year, LG Innotek reported revenue of KRW 20.6 trillion.

Mounting methods for display driver ICs (DDIs) on panel substrates vary by substrate type and attachment method, including Chip-on-Film (CoF), Chip-on-Plastic (CoP), and Chip-on-Glass (CoG). These methods differ in DDI mounting positions and the connection between the panel substrate and FPCB. Samsung’s flagship smartphones use CoP, which mounts chips on the PI substrate of flexible OLED displays. The higher-end Galaxy A series uses CoF, while the lower-end Galaxy A and budget Galaxy M series use CoG, mounting chips on glass substrates.

Editor：Lulu

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