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LG Display to Invest 10 Trillion Won in OLED Business by 2018
Ending Game of Chicken
LG Display to Invest 10 Trillion Won in OLED Business by 2018
  • By Cho Jin-young
  • August 18, 2015, 02:45
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LG Display has decided to invest more than 10 trillion won in the production of large flexible OLED panels by 2018. The decision signifies that its direction will switch from a LCD maker to an OLED producer, and the move can also be interpreted as its willingness to lead the future display market.

"Our company will select the OLED business as a 'game-changer' that will change market dynamics in order to dominate the future display market, and will cultivate the business as a future growth engine," said Han Sang-beom, president of LG Display. His remarks were made at a press event announcing its mid-long term strategies that was held at a company factory in Paju, Gyeonggi Province on Aug. 17.

The company has decided to make an investment mainly in the large and flexible OLED area, ultra-large UHD TVs, and the premium LCD field aimed at improving the performance of mobile devices like smartphones.

In particular, the Korean company will focus on augmenting its influence in the premium TV market and create a new market with large OLED panels. It is also aiming at nabbing the top spot in the wearable device field, mainly with small and mid-sized flexible OLED panels. In addition, the firm is planning to target the auto and foldable display markets as OLED growth areas.

LG Display comprised 23.3 percent of the global large LCD market in the second quarter of this year, which placed the firm in the top position. In fact, the Korean company has maintained the top spot for 23 quarters in a row, since Q4 2009.

However, the LCD-led display industry is currently in a stalled growth mode. Moreover, competition with Taiwanese, Chinese, and Japanese rival companies is like a game of chicken. China, in particular, is expected to threaten Korea, since Chinese LCD suppliers are predicted to increase their share of the market from 16 percent this year to 27 percent in 2020. Therefore, LG Display, the world's largest LCD panel maker, is in a quandary over the possibility of losing its market share.

As a result, the Korean company has decided to choose a strategy aimed at keeping its competitive advantage in the display market through OLED panels, which are widely acknowledged to be ahead of LCD panels in terms of image quality and design. Since barriers to technology adoption and entry are high for the OLED panel industry, Korean companies have a competitive advantage in the market to the extent that LG Display and Samsung Display are the only companies that can mass-produce OLED panels at the moment.