LG to put OLED first as Chi­nese LCD-mak­ing firms nar­row the gap

The China Post - - WORLD BUSINESS - BY YOUKYUNG LEE

South Korea’s LG Dis­play said Mon­day that it will change its in­vest­ment pri­or­ity to ad­vanced dis­plays called OLEDs as Chi­nese man­u­fac­tur­ers quickly catch up with their South Korean ri­vals in the LCD mar­ket.

LG Dis­play Co., a sup­plier to Ap­ple Inc., said that over the next three years it plans to spend 10 tril­lion won (US$8.4 bil­lion) on fu­ture dis­plays in­clud­ing OLED, flex­i­ble dis­plays and high-end LCD screens. It did not give break­down fig­ures, say­ing the size for each type of dis­play will hinge on mar­ket sit­u­a­tions.

LG Dis­play and LG Elec­tron­ics are the lone man­u­fac­tur­ers of OLED TVs, which are still more ex­pen­sive and more dif­fi­cult to pro­duce than LCD TVs. LG Dis­play’s OLED busi­ness has been los­ing money.

OLEDs, or or­ganic light-emit­ting diodes, re­quire no back­light and can be made into a flex­i­ble dis­play. Ri­val Sam­sung Elec­tron­ics uses OLEDs only for small-size de­vices such as smart­phones, say­ing that big-size OLED TVs face chal­lenges in prices and pro­duc­tions.

But LG vowed to con­tinue its high-stake bet. The com­pany said that in or­der to stay ahead of Chi­nese com­pa­nies, it must con­tinue its early OLED push.

LG Dis­play’s CEO said that while the Chi­nese firms will even­tu­ally catch up to South Korean mak­ers in the LCD mar­ket, there is still an op­por­tu­nity in the fu­ture dis­plays.

“But there is still a gap in OLED,” CEO Han Sang­beom said at a news con­fer­ence.

On the back of mas­sive in­vest­ments, South Korean elec­tron­ics com­pa­nies sur­passed Ja­panese com­pa­nies to be­come the world’s largest sup­plier of flat dis­play pan­els in the early 2000s. Those dis­plays are used to pro­duce tele- vi­sions, com­puter screens and mo­bile de­vices.

But helped by gov­ern­ment sup­port, Chi­nese com­pa­nies are quickly nar­row­ing the gap with South Korean firms, threat­en­ing the Korean com­pa­nies’ lead­ing po­si­tion.

Chi­nese dis­play mak­ers are ex­pected to ac­count for 27 per­cent of global LCD pro­duc­tion in 2020, up from 16 per­cent this year, ac­cord­ing to LG Dis­play.

LG be­lieves its gi­ant in­vest­ment will pay off as the OLED mar­ket poses a greater growth op­por­tu­nity than the LCD mar­ket, where growth has stag­nated. Dis­playSearch, a mar­ket re­search firm, fore­casts OLED ship­ments to jump about three­fold to US$28.3 bil­lion in 2022 from US$8.7 bil­lion in 2014.

Han, the LG Dis­play CEO, said the com­pany’s OLED busi­ness will turn prof­itable in the next two years.

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