Tuesday, November 13, 2018
LG Display to Make P10 Plant in Paju as OLED Production Base
Shift to OLED Production
LG Display to Make P10 Plant in Paju as OLED Production Base
  • By Cho Jin-young
  • May 22, 2017, 01:45
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LG Display will invest 10 trillion won (US$8.9 billion) in its P production line in Paju, Korea, mainly on organic light emitting diode (OLED) facilities.
LG Display will invest 10 trillion won (US$8.9 billion) in its P production line in Paju, Korea, mainly on organic light emitting diode (OLED) facilities.

 

LG Display has decided to invest 10 trillion won (US$8.9 billion) in its P production line in Paju, mainly on organic light emitting diode (OLED) facilities. The figure will be the largest ever made in a single panel factory. The company will build the line in a hybrid form that can produce large and small and mid-size panels at the same time, but small and mid-size plastic OLED (POLED), which has become the trend in the global smartphone market, for mobile devices will account for more than 70 percent of the total production.

For large panel production, LG Display couldn’t decide on whether it should invest in 10th generation LCDs or OLEDs until the last minute but the company is expected to choose OLED. The large OLED TV market is not large yet, but it has a high growth potential. As LG Display has decided to expand the investment in OLEDs, the company will fiercely compete with Samsung and LG, which leads the panel technology, and Chinese and Taiwanese panel producers for dominance in the market.

A senior official from a LG Group affiliate said on May 22, “The P10 Plant in Paju is set to focus on OLED production, and we are now in the final talks over the exact percentage of OLED production.  However, LG Display can decide on whether it will stick to the initial plan or an alternative plan, which produces some LCD products first and then moves to OLEDs, considering the market situations in the second half of the year as the company has the technical ability to produce OLEDs at the LCD production facilities.” In this regard, LG Display presented its clear vision through its company intranet that it will introduce the production lines of both mobile POLEDs and large OLEDs in the P10 factory in Paju. The company has decided to make its bid by targeting the OLED market, instead of the LCD which is becoming the red ocean industry.

With an aim to operate the production line in the first half of 2018, LG Display’s P10 plant in Paju, Gyeonggi Province, will be 100 meters tall and as big as 14 soccer fields, the largest OLED production base in the world. The company will make an investment of 10 trillion won US$8.9 billion), the largest ever investment made in a single panel production factory. With an effort of “Government Joint Support Team for LG Display OLED New Investment” led by the Ministry of Trade, Industry and Energy (MOTIE), the administrative issues, such as the security of substation sites and wastewater treatment facilities, were settled quickly so the mass production can come ahead of schedule.

LG Display has decided to invest in OLEDs instead of LCDs because the OLED market is growing faster than expected. In particular, small and mid-size OLEDs, which are to be used on Samsung Galaxy phones and Apple iPhones, are rapidly increasing its share in the smartphone display market. According to global market research firm IHS Markit, OLEDs had a 26.5 percent share in the smartphone display market in 2014 in terms of sales but its market share is expected to expand to 57.5 percent, far surpassing that of LCDs. As Samsung Display, which has a strong captive market of Samsung Electronics, has already dominated the small and mid-size OLED market in advance by making a preemptive investment, LG Display is expanding the investment in small and mid-size OLEDs due to its growth potential.

LG Display currently makes an every effort to secure Chinese smartphone producers as its customer companies as well as Apple and Google. Its affiliate LG Electronics has also announced to release the V series smartphones equipped with OLED panels in the second half of the year. Industry sources expect that LG will become one of Apple’s panel vendors in 2018 again, though Apple changed its panel vendor from LG to Samsung after introducing OLEDs in the iPhone 8. LG Display has already established sixth generation flexible OLED lines in the E5 plant in Gumi and the E6 plant in Paju. The company will start mass production at the E5 line in the second half of the year and supply the first batch to China’s Xiaomi.

The large OLED market, which is now relatively small, has also a bright future outlook along with the recent growth of the premium TV market. The market is actually dominated by LG Display but some have pointed out that the company has struggled to secure customer companies other than its captive LG Electronics. However, Sony recently announced to enter the OLED TV market by using LG Display’s panels. So, the market is expected to expand faster.