LG Display has confirmed that it will fill the entire P10 plant in Paju with organic light emitting diode (OLED) facilities which will become the company’s next growth engine.
According to electronics industry sources on June 21, LG Display decided to shift the P10 plant to a base that can produce only large and small and mid-size OLED panels and plans to cast a vote for the investment plan at its regular board meeting to be held on the 25th of next month.
An official from LG Display said, “We will make the P10 as the production base for only OLED panels, excluding liquid-crystal displays (LCDs). However, we have to see market conditions, total investments and equipment development in order to decide on how much and where we will invest in large and small and mid-size OLED panels on seven floors. So, we will be able to shape the direction next month.”
LG Display decided to make an intensive investment worth 10 trillion won (US$8.76 billion) in OLED panels at the P10. This is because the company believes that the OLED market will continue to grow every year, though there will be an excessive supply as China will start operating new large LCD production facilities next year.
In particular, the small and mid-size OLED market is expected to grow from US$14 billion (15.99 trillion won) last year to US$23.7 billion (27.07 trillion won) in 2018 to US$29.4 billion (33.57 trillion won) in 2020. Therefore, LG Display decided to mass produce small and mid-size OLED panels first. In fact, the company plans to double its small and mid-size OLED production capacity every year. It will produce 15,000 units at the E5 line this year, 15,000 units of the 6th-generation OLED at the E6 in 2018 and 30,000 units of 6th-generation OLED at either the E6 or the P10 in 2019. In addition, LG Display is considering a plan to shift some LCD production facilities to small and mid-size OLED production lines.
For large OLED panels, it is expected to invest in the 8.5-generation OLED first and then the 10-generation later, according to display industry watchers. An expert in the display industry said, “From business profit point of view, there is doubt that large LCD panels can make a profit. So, it would be better to shift to OLED panels, though they have relatively low yield rates. As Apple, which has close relations with LG Display, plans to use OLED panels in iPads in two to three years, the company needs to accelerate the small and mid-size OLED production.”