LG Building A New $4.5 Billion OLED Factory In China: Report

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LG Display is planning to double its OLED panel manufacturing capacities in China after the South Korean administration approved the company's request to build another production facility in Guangzhou earlier this week, five months following LG's initial request which was still actively deliberated just several weeks back. The company is said to be committing approximately $4.5 billion to the plant, BusinessKorea reports, citing industry sources familiar with the project. The vast majority of that sum is expected to be allocated for Korean suppliers whereas only a fifth of it will end up overseas. Such a domestic-first approach to a foreign investment may have played an important role in the process of having the plan approved by Seoul, some industry watchers believe.

The development is scheduled to officially begin in the coming weeks, with the plant itself being expected to be completed by the second quarter of 2019. Provided LG doesn't manage to improve its capacities in the meantime, the Guangzhou factory will more than double its current output and bring it to approximately 115,000 units of 8.5-generation OLED panels per month, up from 55,000 modules it currently produces. The move is yet another step in LG's efforts to refocus its display business on OLED technologies which already established themselves in the industry and are expected to continue growing at a rapid pace in the coming years. The tech giant's current plans are largely committed to TV panels, though its smartphone division finally commercialized an Android flagship with an OLED screen this year, having launched it in the form of the LG V30. LG Display also produced the POLED modules for Google's Pixel 2 XL and is expected to continue its partnership with the Alphabet-owned company going forward.

The Guangzhou plant will be solely dedicated to manufacturing TV OLED panels and will allow LG to further strengthen its already superior position in the market. While the company managed to grow into a major maker of OLED panels for TVs, it has yet to commit more resources to doing the same in the mobile segment which is currently entirely dominated by Samsung Display which accounts for over 97 percent of global OLED panel production for smartphones. The market is unlikely to go through significant changes in 2018 but major shifts may come as soon as 2019 once Chinese companies manage to commercialize TV OLED technologies.

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