Sunday, July 21, 2019
LG Display and Samsung Display Opting for Different Strategies
Different Strategies
LG Display and Samsung Display Opting for Different Strategies
  • By Cho Jin-young
  • October 4, 2016, 01:45
Share articles

Samsung Display is planning to be supplied with advanced panels for large-screen TV from China whereas LG Display is going to set up new OLED panel production lines.
Samsung Display is planning to be supplied with advanced panels for large-screen TV from China whereas LG Display is going to set up new OLED panel production lines.

 

Samsung Display and LG Display are going in different directions with Chinese display panel manufacturers increasing their investment in the production of 10th-generation panels and more advanced ones. Although both of them are refraining from investment in new LCD panel manufacturing facilities, which is sure to lead to a game of chicken, Samsung Display is planning to be supplied with that type of panels from China in order to maintain its leadership in the large-screen TV industry whereas LG Display is going to set up new OLED panel production lines.

These days, Chinese display panel manufacturers are increasing their investment in advanced LCD panel production lines for 60-inch and larger panels. In contrast, South Korean companies are making no investment for the same purpose due to the risk of direct investment. For example, BOE began late last year to build 10.5th-generation LCD panel production lines in Hefei, which are to be put into operation in 2018, and China Star Optoelectronics Technology recently decided to build 11th-generation LCD panel production lines in Shenzhen at a total investment of 7.7 trillion won. These are to be put into operation in July 2019.

Their aggressive investment is to dominate the TV market segment of at least 60 inches in the future. 10th- and 11th-generation panel plates based on a glass substrate having a size of 2,880 mm by 3,130 mm and a glass substrate having a size of 3,370 mm by 2,940 mm are capable of producing eight and 10 TV panels for use in 60-inch or larger TV, respectively. These are advantageous in terms of cost reduction in that an eighth-generation panel plate, which is currently the most widespread one in LG and Samsung, has a capacity of four TV panels.

The South Korean companies have already given up on direct investment in that type of LCD panels. “China has already got the jump on them and the large-screen LCD panel market itself is in stagnation now and, as such, an investment of several trillion won is too risky,” said an industry source. China is about to catch up with South Korea in production capacity regarding eighth-generation and more advanced large-screen LCD panels, too. According to market research firm IHS, South Korea’s and China’s capacities are likely to reach 48,378 square kilometers and 58,245 square kilometers at the end of this year, respectively.

Under the circumstances, Samsung Display opted to work with Chinese companies. It is going to invest 350 billion won and acquire 9.8% shares in the 11th-generation LCD panel company to be established early this month by China Star Optoelectronics Technology. LG Display is expected to respond to the situation by means of large-screen OLED panels. The company is currently working on the world’s largest OLED panel manufacturing facility at an investment of 10 trillion won in Paju City, Gyeonggi Province, which is scheduled to start production in the first half of 2018. This facility is likely to house production equipment for plastic OLED panels for use in smartphones, too.