LGD to Boost Small and Medium OLEDs, 'Hyungmanhan Au'... 3.3 Trillion Won Facility Investment Undertaken (Comprehensive)

LG Display Paju Plant Panorama

[Asia Economy Reporters Heungsun Kim and Hyunjin Jung] LG Display is set to invest around 3 trillion KRW targeting the small- and medium-sized organic light-emitting diode (OLED) market. This decision comes as the company believes its large OLED panels for TVs, launched to compete against the aggressive LCD panel market dominated by Chinese companies, have gained traction. The move aims to expand market dominance into small- and medium-sized product segments such as laptops and tablet PCs.

On the 17th, LG Display announced a new facility investment worth 3.3 trillion KRW to secure production capacity for small- and medium-sized OLEDs. The board of directors approved this agenda on the 13th, deciding to establish a 6th-generation (1500mm × 1850mm) small- and medium-sized OLED production line at its Paju plant in Gyeonggi Province by March 2024. The new line is expected to begin operations in 2024.

This marks LG Display’s first large-scale investment in OLED panel production lines in two years. Previously, in July 2019, the company invested 3 trillion KRW in large OLED panel production facilities at its 10.5-generation Paju plant. Regarding small- and medium-sized OLEDs, this is the first investment in four years since July 2017.

LG Display’s announcement of a large-scale new facility investment in small- and medium-sized OLEDs is interpreted as a strategic move to strengthen competitiveness and increase market share in the growing small- and medium-sized OLED market alongside its already leading position in the large OLED market. Currently, LG Display’s Paju plant operates an existing 6th-generation small- and medium-sized OLED production line called E6. The new investment appears to be separate, aiming to build an additional production line. According to industry sources, the current small- and medium-sized OLED production volume in Paju is about 30,000 units, and this new investment is expected to double production capacity.

According to market research firm Omdia and the Korea Display Industry Association, the small- and medium-sized OLED market revenue, which was approximately $26 billion (about 30.4 trillion KRW) last year, is projected to expand to $39 billion by 2024. In terms of revenue, the small- and medium-sized OLED market is about six times larger than the large OLED market. Regarding market share in the small- and medium-sized OLED segment last year, Samsung Display led with 73.1%, followed by LG Display at 12.3%.

Industry insiders view LG Display’s new investment in small- and medium-sized OLEDs as closely related to its strategic key customer, Apple. Small- and medium-sized OLEDs are mainly used in mobile devices, laptops, and tablet PCs. Since the second half of 2019, LG Display has been supplying OLED panels for Apple’s iPhone series. Currently, only Samsung Display and LG Display supply OLED panels for the iPhone series, while Chinese display maker BOE is developing its technology to enter the supply chain. Additionally, demand for vehicle displays, including electric vehicles, is rising, further boosting growth prospects for the small- and medium-sized OLED market.

An industry official commented, "Small- and medium-sized OLED panels for smartphones and laptops have been dominated by Samsung, while LG Display has been recognized for its competitiveness in large panels such as those for TVs. This investment appears to be a choice to break this structure, expand its domain, and reshape the leadership in the overall OLED panel market."

Meanwhile, LG Display expects its large OLED business to turn profitable in the second half of this year. Having mass-produced the world’s first large OLED in 2013, LG Display has invested in large OLEDs for eight years and held an 86% market share as of last year. In the second quarter of this year, LG Display recorded an ‘earnings surprise’ with operating profit exceeding 700 billion KRW for the first time in four years, and achieved record quarterly sales of 6.9656 trillion KRW.

This content was produced with the assistance of AI translation services.