Abstract: In this paper, we set up an innovation ability evaluation system for the flat panel display industry and use the principal component analysis method to quantitatively analyze the impact of FDI on the innovative ability of China's flat panel display industry. Research on the overall impact of China's flat panel display industry innovation capacity shows that in the early stages of industrial development, FDI had a positive impact on the improvement of industry innovation ability, but impact strength was not large, such as APA, AIP and FI. When the industry developed to a certain scale, FDI had a negative impact on improving the ability of industry innovation, to a certain extent, the innovation ability was reduced. This paper's further study on leading enterprises such as BOE shows that the influence of FDI on innovation ability will have different effects because of the different environment and different conditions.