LG Display Confident Of Their LCD Prowess

LG's panel manufacturing division, LG Display, has captured much media attention in recent weeks. LG Display has struggled for a number of reasons, including how many smartphone manufacturers are moving away from LCD to OLED technology and LG has traditionally been a LCD manufacturer. Furthermore, LCD panel prices have been under pressure because there is considerable competition within the industry. In the decade so far we have seen a large number of Chinese panel manufacturers selling technology to a number of manufacturers around the world and this has depressed prices such that some of the more established players have struggled. LG Display has made several announcements that the business is ramping up OLED production lines but this process takes several months through to years: factory lines being started today may be commissioned next year but will not be up to full capacity until 2018 or perhaps even 2019. As such, the massive investment needed to build production may not be realized for another couple of years.

Earlier in the week, LG Display vice chairman, Han Sang-beom, commented at a CEO conference that LG Display had seen the early signs of a recovery in the last few weeks of the second quarter (around a month ago). The business had suffered a very difficult period with Q1 2016 operating profits slashed by over 90% because of intense competition in the LCD industry. LG Display has also suffered because of poor sales of some of its chief customers, such as Apple, where iPhone sales have been sluggish. However, Han stated that LG Display remains confident because it has a technological edge in the LCD market: the company still believes it has the world's best LCD technology and high profitability, but is making much noise about its POLED (plastic organic light emitting diode) screen technology, which can be manufactured to be flexible. Han also explained that LG Display is preparing to supply POLED technology to a number of Chinese businesses.

The company is planning on reinvesting profits derived from its LCD business into the OLED business as well as considering if it should invest into building upon its 10.5-inch LCD technology, where several Chinese competitors have invested considerable sums and are making headway. LG Display has already invested 1 trillion won (a little under $900 million) into the Gumi factory in the North Gyeongsang Province and recently celebrated a new production line; the company is also planning to establish new production lines at the Paju plant in the Gyeonggi Province by 2018, designed to supply mobile and automobile customers. Han expects the LCD and OLED business to "be balanced out by 2019 and 2020." He expects some of this growth to be powered by LG Display's new OLED television sets as well as the flexible POLED technology. The company must be hoping that the signs of a recovery in the LCD market are true, otherwise it may struggle to invest into its OLED business.

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About the Author

David Steele

Senior Staff Writer
I grew up with 8-bit computers and moved into PDAs in my professional life, using a number of devices from early Windows CE clamshells and later. Today, my main devices are a Nexus 5X, a Sony Xperia Z Tablet and a coffee cup.