LG Display's OLED Investment In China Waiting For Approval

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LG is hoping to receive approval from the South Korean government sometime this month for its planned investment in a production facility for OLED TV panels located in Guangzhou, China, according to a new report by Business Korea. LG Display, the company’s business unit responsible for the manufacture of panels, must first gain permission from South Korea’s Ministry of Trade, Industry and Energy before the company can start building its eight-generation OLED display production plant in China. Because of that, South Korean companies including LG are obliged to follow the same ruling under existing laws in the country.

Last July, LG unveiled its plan to expand its OLED production in China with a $2.32 billion investment in a new large-sized OLED production line in Guangzhou through a new joint venture it plans to establish for that purpose. This was alongside LG Display’s other expansion plans for its OLED TV panel production in other locations such as in Paju, South Korea, where the company intends to infuse $2.5 billion into a large-sized OLED display manufacturing plant as well as $4.4 billion in a sixth-generation plastic OLED production line there. The announcement to expand in China reportedly did not please the South Korean government for various reasons, including economic and technological factors. However, trade regulators in the country are expected to change their mind soon and give a go signal to LG’s OLED production expansion in China. According to some industry watchers, the planned OLED production plant in China could produce approximately 2.6 million OLED TV displays every year once the company kicks off its investment in the first quarter of 2018 and begins production in 2020, provided it gets approval from South Korean regulators for such an endeavor.

Overall, LG Display’s OLED investments for new large-scale production plants could reach up to $8.86 billion, with some estimates putting the company’s 8.5G OLED production capacity at around 60,000 units per month by the end of the year and double that rate once production kicks off at the Guangzhou plant. On the other hand, the planned 10.5G production line in Paju is expected to turn out approximately 30,000 panels per month once operation begins in 2020, with LG Display’s total expenditure for the OLED manufacturing expansion estimated at around $14.89 billion through to the second half of 2020.