Samsung Display and LG Display will cooperate on the development of advanced display technologies, as Korea is being challenged by rising Chinese suppliers in the already saturated market. The two companies on Wednesday signed an agreement with the South Korean government, with a total investment of 30 billion won ($29.6 million) over the next five years. The money will be allocated to local universities and institutes for research and development. The project will include the development of display patents to be used in advanced displays.

"This project is a kind of charity program to help government initiatives for balanced growth with big companies and small and medium-sized enterprises (SMEs). LG and Samsung will just spend money. and patents will be owned by developers," a ministry official said.

Awarded local universities and institutes are being tasked to develop foldable, bendable and transparent displays, and some other futuristic products.

S. Korea recognizes the "threat" from China, which is catching up in the country and could result in losing its lead in display technologies.

Display panels are one of the S. Korea?s top export items with over $12.2 billion worth of liquefied crystal displays shipped overseas in the first half of the year, accounting for nearly 4.3.