LG Display to spend 3 trillion won on OLED facility

LG Display will invest 3 trillion won ($2.5 billion) to expand production facilities for high-end organic light-emitting diodes (OLED) panels at its factory in Paju, Gyeonggi, the company announced Tuesday.

The 3-trillion-won investment will specifically go to the 10.5 generation OLED production line. In the display industry, the word “generation” refers to the size of the “mother glass” on which panels are produced in factories. Older generations refer to larger sheets of mother glass that enable the production of more and bigger displays.

For example, a 10.5 generation mother glass can product eight 65-inch panels and six 75-inch panels, a company spokesman explained.

The Korean panel maker has spent 4.6 trillion won in the P10 OLED factory in Paju since 2015, and the latest spending plan is focused on ramping up its monthly capacity to 45,000 panels sized over 65 inches by the first half of 2023.

LG said that when the 10.5 generation OLED production line is completed, it plans to produce not only TV panels but also other products like wallpaper and rollable displays to enter new markets.

The investment comes as the global leader in OLED panels has vowed to speed up the transition from LCDs to OLEDs to get a bigger share of the premium TV and smartphone market.

LCD panels have been plagued by falling demand and a supply glut, partly due to Chinese producers.

LG shipped 2.9 million large OLED panels last year, which accounted for over 20 percent of its total sales, turning to a surplus for the first time in the five years since the panels’ launch.

LG Display expected the sales ratio to exceed 30 percent this year.

It anticipates the new production line will help boost the number of OLED customers. The global OLED market started off with LG Electronics as a solo player in 2013 but now has a long list of 15 companies including China’s Hisense, Japan’s Toshiba and Panasonic, and Europe’s Philips.

Another LG OLED factory in China will start operations next month to roll out 60,000 OLED sheets per month.

This would increase the company’s total monthly OLED sheet output capacity to 130,000 units this year, when combined with the production line at its Paju factory.

Market researcher IHS Markit predicts that the proportion of OLED TVs will rise from 5.7 percent of the total market in 2018 to 10.4 percent in 2023. As for OLED panels, the firm forecast a jump from 290,000 units sold in 2018 to 10 million units in 2022.

BY SONG KYOUNG-SON, YONHAP [song.kyoungson@joongang.co.kr]