OLEDs to China

A 55 inch OLED TV by LG Electronics.
A 55 inch OLED TV by LG Electronics.

 

According to display industry sources on Nov. 4, LG Display (LGD) has recently begun seeking to supply Chinese smartphone manufacturers, including Oppo, with small and medium-sized organic light-emitting diode (OLED) panels. LGD’s small and mid-sized OLED panels, which so far have only been supplied to wearable devices such as Apple Watch models and LG Electronics’ Urbane smart watches, are produced in the 4.5 generation flexible panel production line in Paju. This production line is also able to manufacture rigid panels, which are commonly used in smartphones.

This is a huge change for LGD, considering its existing position to stick with in-plane switching (IPS) liquid-crystal displays (LCD) for mobile devices’ small and medium-sized displays. The company has not produced OLED panels for smartphones after the G Flex, which was released by LG Electronics earlier this year. The G Flex series are also the exceptional cases to use OLED displays in order to emphasize flexible design.

Some industry watchers say that LGD is preparing to enter the global small-medium sized OLED market in earnest, following the existing TV OLED panel market. Unlike in the past, the price difference between LCDs and OLEDs for smartphones has rapidly dropped. Accordingly, mobile phone makers, including Samsung Electronics, are actively using OLED displays. Its profitability is better than LCD, which is suffering from oversupply. Market research firm IHS said that the price difference between full HD OLED and LCD panels for mobile devices decreased from US$18 (20,403 won) last year to US$8 (9,068 won) in the second quarter this year.

Eyes are also on the movement of Apple, the big player in the industry. Some say that the company, which has been producing Apple Watch models with LGD’s panel so far, will use Samsung Display’s panel from the Apple Watch 2. In addition, Apple is expected to use OLED panels for its next-generation iPhone series. For LGD, it is possible to lose its largest customer, Apple, if the company puts off on tapping into the small and mid-sized OLED market.

LGD is highly likely to start its business focusing on smaller smartphone makers, rather than going head to head with Samsung Display, which has a more than 90 percent share in the small and mid-sized OLED market. According to IHS, the flexible OLED production capacity between the two companies is an almost tenfold difference based on the total floor area.

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