LG Display to boost OLED production as new factory opens

OLED TV surge on the way

by Andy Bassett
TV News

2

LG Display to boost OLED production as new factory opens
With ambitions to produce up to 10 million large-sized OLED panels per year by 2022, this new plant plays a significant role in LG’s unfolding plans for an OLED based TV future.
This latest 8.5 generation facility based in Guangzhou, China will manufacture glass sheets of 2,200 x 2,500mm from which high-resolution OLED panels of 55-, 65- and 77-inches will be created. The initial monthly output of the plant will be around 60,000 sheets and production will then ramp up to 90,000 sheets per month by 2021.

LG Display has ploughed around US$4.2 billion into the development of the Guangzhou facility, and though it is a joint venture between the company and the Guangzhou Development District (under the name LG Display High-Tech China), LG Display holds a 70 percent stake. The new factory complex is about the size of 10 football fields, and, given the number of levels above ground, the total area for OLED production capabilities is close to 427,000m². However, the total area of the entire LG Display Guangzhou Cluster, which includes LCD panel and module plants, partner company complexes and additional facilities, amounts to 1.3 million m².

The South Korean company’s longer-term manufacturing plans are based around production of OLED panels both at home and on Chinese soil and the goal is to add the 90,000 sheets from this new 8.5 plant in Guangzhou to the current 70,000 monthly sheets from LG Display’s OLED plant in Paju, Korea, as well as an additional 45,000 sheets to be produced at its 10.5 generation (2,940mm x 3,370mm) plant in Paju from 2022. To support this, LG Display recently invested a further US$2.47 billion in the Paju plant.

The stated aim of this manufacturing schedule is 10 million OLED panels per year which is supported by figures from global market research firm IHS Markit, who estimate global sales of OLED TVs to reach 5.5 million by 2020, increasing to 7.1 million in 2021 and finally rising to the predicted 10 million by 2020.

LG Display to boost OLED production as new factory opens

LG Display’s expanding OLED output puts them in a strong position with their manufacturing customer base, which includes LG Electronics, Sony, Philips, Hisense, Skyworth, Changhong and Konka. With OLED operations now up and running at the well established LG Display Guangzhou Cluster; infrastructure, well-optimised tariffs, labour and distribution conditions, along with increasing production volume, will boost the company’s competitiveness by providing technology and products in a timely manner.

Attending the opening ceremony, Dr. Sang Beom Han, CEO and Vice Chairman of LG Display, commented, “Based on our vast experience and capability in OLED production, LG Display will make every effort to ensure the success of LG Display High-Tech China.” He added, “With our dual OLED panel production sites in Korea and China, the company will further accelerate the OLED trend in the global premium TV market by providing large-size OLED panels to the world.”

LCD panels still form the largest part of LG Display’s income but the collapsing LCD market (due to oversupply and weak global demand) recently contributed to a US$300 million operating loss for the company in the second quarter of 2019. Their response to these changing market conditions is a transition from LCD to OLED panels as rapidly as possible and their recent increase in shipments from 2.9 million units in 2018 to an expected 3.8 million in 2019 is supported by an increasing number of TV manufacturers bringing their own OLED models to market - all supplied with OLED panels from LG Display, of course. Thus, the company expects its sales ratio of OLED panels to reach 30 percent this year, resulting in its large-size OLED panel business turning a profit on an annual basis for the first time.

So, things are looking positive for OLED TVs from a manufacturing perspective but these televisions are still perceived as premium products and, as such, attract a price tag to match. This is part of LG Display’s business plan to start extracting maximum profitability from OLED production after such a huge series of investments. It’s therefore unlikely that significant price drops will be just around the corner for discerning TV purchasers but patience may well bring some benefits in the fullness of time.

Are AVForums members prepared to wait before taking the OLED leap? Let us know in the discussion thread.

Source: Press release, m-en.yna.co.kr,
Image Source: LG
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