LG Display plans $9bn OLED plant

SEOUL: Apple Inc supplier LG Display Co will spend 10 trillion won (US$8.7 billion) on building a new plant and expanding production of a newer type of display that can be used to cut power use, make thinner devices and show brighter colours.

The factory will produce organic lightemitting diode (OLED) displays for larger TVs, smartwatches and automotive displays and is targeted to start in the first half of 2018, Seoul-based LG Display said yesterday.

The technology has been touted as a possible replacement for the liquid-crystal displays (LCDs) used in smartphones. Apple plans to adopt OLED for iPhones from 2018.

“Today’s announcement implies that the potential timing of Apple’s adoption of OLED screens is set,” said Claire Kim, an analyst at Daishin Securities in Seoul.

LG Display said in August it planned to spend about 10 trillion won over three years to develop the advanced screens, which offer a brighter, sharper picture than LCDs. The panels also save space and power because they do not need a backlight. Slowing sales of LCDs is hastening a push into OLEDs for smartphones and wearable devices.

The investment intensifies the company’s rivalry with Samsung Display, the dominant maker of OLED panels for smartphones. Samsung supplies the ultra-thin screens to Apple’s key competitor Samsung Electronics and to Chinese phonemakers. Apple’s demand for the panels will be strong enough to support more than one big maker, Ms Kim said.

“I don’t think the P10 plant alone will entirely cover Apple devices only, so Apple has to turn to Samsung to secure stable production,” she said.

Apple is LG Display’s biggest customer, accounting for about 25% of sales. The South Korean company last month reported a 30% decline in third-quarter operating profit as prices and demand fell.

A group of 200 employees at Samsung Display, which already provides OLED screens for the Apple Watch, created a standalone team working exclusively on screens for Apple products.

The two South Korean makers are the biggest producers of OLED screens.

The global OLED market is forecast to climb to $29.1 billion by 2022, from $13 billion this year.