Recently, the longest-ever "618" shopping festival officially came to an end. Fueled by the national subsidy program for trade‑ins, sales of consumer electronics—specifically smartphones, tablets, and laptops—saw significant year-over-year growth.

As one of the world's largest consumer markets for electronics, China has become a global hub for production and innovation in recent years. The rapid advent of technologies like artificial intelligence, smart vehicles, and virtual reality has driven ever-increasing demand from manufacturers for upstream semiconductor and display materials.

What are the latest trends in semiconductors and display technologies? How are leading companies responding to intensifying competition? National Business Daily (hereinafter referred to as NBD) recently conducted an exclusive interview with Sui Yu, Managing Director of Electronics China at Merck, to find out.

Sui Yu, Managing Director of Electronics China at Merck Group (Photo/proviced by the interviewee)

Doctor of Materials Science from Shanghai Jiao Tong University and EMBA graduate from CEIBS, Sui Yu has held various management roles at Merck over the past decade—including leadership positions in the former Display Technologies business unit, Strategy & Development, and now the Semiconductor Materials division—gaining extensive experience in multinational operations, strategic planning, and localization.

Electronics is one of Merck Group’s three core business pillars. In 2024, Merck Group’s net sales totaled 21.2 billion euros (about 166.7 billion yuan), with its electronics business accounting for approximately 3.8 billion euros (about 29.9 billion yuan). China, a strategically important market, has long served as both an innovation center and a growth engine for the electronics division.

Since being appointed in late 2022 as the first Chinese national to hold the Managing Director position for Electronics China, Sui Yu has witnessed Merck's commitment to becoming "the most localized multinational".

"For me—and the entire China team—the Group has placed tremendous trust in us. Our organizational structure and decision-making authority in China are entirely distinctive. Many key decisions are now made locally," says Sui Yu.

Becoming "the Most Localized Foreign Enterprise"

Merck Electronics has established four high-tech manufacturing sites in Shanghai (Jinqiao and Waigaoqiao), as well as in Suzhou and Zhangjiagang. It also hosts several R&D centers in China: Electronics and LCD China Centers, Display Materials R&D Center, OLED Technology China Center, and Liquet Crystal Materials R&D Center, alongside a Waigaoqiao ultra-high-purity gas equipment fabrication facility and a fully integrated semiconductor base in Zhangjiagang.

NBD: What role does the Chinese market play in Merck's electronics business, and how does it differ from other regions?

Sui Yu: China is a vital part of Merck Electronics' global footprint—an innovation hub and a strategic cornerstone. It is the world's largest semiconductor consumer market and leads global display manufacturing by capacity—accounting for around 70% of global LCD production. Since Merck Electronics focuses on semiconductors and displays, China is enormously important to us.

In recent years, China has demonstrated distinctive resilience and dynamism. Policies favoring high-tech, premium, and high-efficiency "new productive forces" are driving industrial upgrades. Government subsidies and trade-in programs have spurred domestic demand, fueling growth in smart home and energy-efficient electronics. Moreover, skyrocketing demand for AI endpoints is injecting further momentum into the Chinese market.

NBD: Merck announced 1 billion yuan investment in China by 2025. You mentioned last year that this had largely been completed. Could you share your investment strategy and future plans?

Sui Yu: Merck has long pursued a global localization strategy. In China, this means 'putting down roots and serving China'—building a local support network that spans all product lines in displays and semiconductors: LCD, OLED, photoresists, semiconductor materials, electronic materials supply systems, and services.

As you noted, our 1 billion yuan investment plan announced in 2022 has now been fully executed, though Merck Electronics has been investing continuously. We are working throughout the supply chain to integrate into the Chinese ecosystem—such as localizing our slurries with the help of partners, which is part of our "smart localization" strategy. We don't just rely on ourselves; we work through strategic partnerships to empower China's electronics information industry.

NBD: As the first Chinese national to lead in this role, how has the past two years felt?

Sui Yu: Being appointed as the first Chinese national to head the business underscores Merck's commitment to localization. In the past two years, I've felt strong trust from our headquarters.

Unlike other regions, all semiconductor material units in China are merged under a single division, with an organizational structure designed around customers, not products. This gives us autonomy in decision-making. We also have access to global resources supporting the Chinese market.

LCD Remains Dominant, but Flexible Displays are Rising

Consumer electronics demand has shifted from curved screens to flexible, foldable, and stretchable displays.

NBD: How does Merck view these emerging trends?

Sui Yu: From a volume perspective, we believe LCDs will remain mainstream in the foreseeable future, especially for medium and large-sized displays. Merck has decades of experience and a strong market position in LCD.

Even mature technologies like LCD continue to innovate—image quality has improved, costs continue to fall, making it a highly economical and capable option. High-quality LCDs with Mini‑LED can rival OLED in picture quality.

NBD: Merck's first China-based OLED materials plant launched in Shanghai in 2022. What unique opportunities and challenges does OLED present?

Sui Yu: Flexibility is a crucial trend—bendable, foldable, stretchable displays could trigger an OLED boom. Compared to LCD, OLED's major advantage is form-factor freedom—a key selling point.

We already see OLED in mid-size devices like laptops. Its market share will grow once cost reduction is achieved and more flexible applications emerge. While large-size OLED TVs exist in high-end niches, mainstream large-size adoption remains uncertain.

To support this, we have introduced our liviFlex™ flexible product portfolio. With experience in both semiconductor and display materials, Merck is well-positioned—particularly in encapsulation technologies. OLED's sensitivity to oxygen, moisture, and temperature makes packaging critical. Our technologies—ALD, CVD, spin‑coated dielectric materials—are highly applicable to OLED encapsulation.

Avoiding a Redsea Price War in Semiconductors

Semiconductor manufacturing relies on a global value chain. Demand is driven by end applications and macroeconomic conditions; supply is influenced by wafer capacity and other factors. Merck supports over 100 local chip manufacturers, supplying more than 150 types of high-purity chemicals and specialty gases.

NBD: With rising local competition, how does Merck balance collaboration and competition?

Sui Yu: It's a good sign to see many new players emerge—equipment and material suppliers alike. We remain confident in our core strategy and won't waver despite increased competition.

We have unique strategic advantages: global certifications from major manufacturers; a strong innovation mindset; and process quality built from extensive experience. The semiconductor market is large and diverse—some materials have low entry barriers and intense price pressure (‘red-sea’); we choose not to compete there. Instead, we differentiate by focusing on high-tech, high-value, challenging segments to solve customer pain points.

Competition is not an issue. With sufficient market space, multinationals can always find suitable niches. It's vital to stay globally minded, leverage our strengths, and integrate into the local ecosystem—learn from local manufacturers' agility and speed, and build long-term strategic partnerships.

Building High-Resilience Organizations in China

NBD: From a corporate perspective, what are the keys to building a "high-resilience" multinational organization in China?

Sui Yu: Merck operates in cyclical industries amid economic, geopolitical, and global volatility. We live in a fast-changing era, but we don’t focus on short-term cycles—instead, we anchor ourselves in long-term technological revolutions: 5G, AI, IoT—all reshaping electronics and technology. As a 350-year-old tech company, we emphasize long-termism.

Whether as a team or individuals, I hope we embrace change, remain vigilant, cultivate self-driven growth mindsets, and act with pioneer spirit to innovate and adapt.

In China, no one thrives alone. Collaboration with upstream and downstream players is key—mutual benefits come from working together. We aim to establish long-term partnerships and stay open—co-developing ecosystems, solving industry-wide challenges, and building a more resilient and sustainable industrial landscape.