The Big 4 Chinese smartphone makers (Huawei, Oppo, Vivo and Xiaomi) will launch premium smartphone loaded with LG Display's small and medium sized organic light emitting diode (OLED) panels next year. This is the first time that the Big 4 was confirmed as customers of LG Display.
According to the display industry on September 13, 20% to 30% of small and mid-sized OLED panels produced by LG Display this have been supplied to Chinese companies. All of them will go into premium smartphones to be released next year. It is said that Chinese makers have been demanding small and medium-size OLED panel supply from LG Display since 2015. In 2015 and 2016, LG Display made new investments in the construction of production facilities, Gumi E5 Plant for small OLEDs and Paju E6 Plant for medium-sized OLEDs, respectively.
It is expected that Chinese smartphone companies will roll out about 10 million to 15 million units of premium smartphones with LG Display's small- and medium-sized OLED panels (based on 6-inch displays) next year. This is based on industry analysis that about 20 to 30% of LG Display's production volume will be supplied to Chinese companies. LG Display is producing about 20,000 small and medium-sized OLED panels at Paju E2 Plant and Gumi E5 Plant per month in terms of 6th-generation mother glass (1,500 × 1,850㎜). If LG Display cuts them to fit the size of a six-inch smartphone display, the company will be able to supply panels for about 5.28 million smartphones.
As LG Display's production capacity will expand significantly in the future, smartphones with LG Display’s OLED panels of Chinese companies, LG Electronics, Apple, and Google will balloon. According to an OLED investment plan announced by LG Display in July, 15,000 panels will be produced monthly in Paju E6 Plant beginning in the third quarter of next year and 30,000 panels in Paju P10 Plant starting in the second quarter of 2019. They will be able to produce a total of 65,000 panels which can translate into 120 million to 170 million panels for 6-inch smartphones annually. This means that LG Display will begin competition with Samsung Electronics which has dominated the supply of small and mid-sized OLED panels on a full scale.
In particular, Apple is expected to receive OLED panels from LG Display and Samsung Display at the same time from the next version of the iPhone X and the iPhone 8 as a strategy to diversify suppliers. People are paying much attention to from which company Apple which sells about 200 million smartphones a year will purchase more OLED panels. In addition, Google is planning to launch the Pixel Phone based on LG Display’s OLED panels in October, and LG Electronics will load the next premium smartphone which will be the V30's successor with OLED panels next year,.
Inside the display industry, Samsung Display dwarfs LG Display in terms of production capacities. LG Display will have a monthly production capacity of 65,000 units starting in 2019 while Samsung Display will be able to roll out 210,000 units a month in 2019. LG Display's production capacity equals only 30% of Samsung Display's.
However, some experts opine that if and when Samsung Display which now accounts for about 96% of the small and medium-sized OLED market loses a 30% market share, it will be a game changer in the OLED market. They explain that the current flexible technology falls short of satisfying consumers expecting innovative smartphones and next-generation innovative products such as foldable and rollable OLEDs hold the key. "In fact, both companies have enough technology to supply panels for foldable smartphone right now but it is not clear whether the technology is attractive enough to force consumers to purchase foldable smartphones," a display industry official said. “Smartphone companies and parts suppliers that will launch thin, light and folded innovative smartphones that can guarantee the current levels of weights and battery life will lead the smartphone market in the future."