Preemptive Investment
According to industry sources on Nov. 18, LG Display will set up its 10th organic light-emitting diode (OLED) panel production line, P10, in Paju. The company will invest 4 to 5 trillion won (US$3.42 billion to 4.27 billion).
The company previously announced in July that it will invest more than 1 trillion won (US$853.97 million) in building a new plant in Gumi to produce 6th-generation OLED substrate sheets of 1,500 mm x 1,850 mm. Therefore, the total investments for plants in Gumi and Paju will reach 5 to 6 trillion won (US$4.27 billion to 5.12 billion) within this year. According to the plan announced by LG Display in August, the company will make an investment of 10 trillion won (US$8.54 billion) by 2018.
Industry watchers believe that LG Display is making preemptive investments, since the company considers OLED panels a new growth engine in the future, replacing the liquid-crystal display (LCD) market that will reach a plateau within the next three to four years. In particular, the company is considering the possibility that Apple, the largest buyer in the industry, will adopt OLED panels in its devices from around 2017 to 2018 when the P10 plant will start operating in earnest. Chinese TV and smartphone manufacturers are already using OLED panels in diverse products.
In addition, there is the possibility that LG Display will invest not only in OLEDs, but also in low-temperature polycrystalline silicon (LTPS) and oxide-based LCDs, which are considered to be next-generation LCDs, at the same time for short-term investment efficiency. Previously, Samsung Display also decided to convert the 8th line process in Tangjeong to an oxide line.
Moreover, all eyes are on next generation production lines LG Display will build in P10. Earlier, LG Display President Han Sang-beom said, “We haven’t decided yet whether to make supplemental investments or new investments for 10th–generation production by increasing substrates, after the investment in 8th–generation OLED. When choosing the way to the 10th generation, we are also inclining to OLED, but will decide later after watching it a little more.” However, the company is less likely to build the 10th–generation line, because there should be glass substrate production plants around, and it takes a considerable amount to construct the production facilities.