The Chinese government has finally approved LG Display’s plans to build an organic light emitting diode (OLED) plant in Guangzhou, China. The plan was okayed in one year since LG Display announced the plan to build the plant in July of last year.
LG Display announced on July 10 that the company received the approval of a management’s intensive report on the OLED joint venture in Guangzhou from the State Administration for Market Regulation (SAMR) of China. The OLED corporation in Guangzhou is a joint venture by LG Display and the Guangzhou Development Zone Authority at an investment ratio of 70 to 30. They will invest about 5 trillion won including 2.6 trillion won in capital. The company is currently constructing an 8.5th-generation (2,200×2,500㎜) OLED production plant and is expected to mass-produce 8.5th-generation OLEDs starting in the second half of next year.
The approval will give big momentum to LG Display's OLED business. When the Guangzhou OLED plant is completed, the plant will mainly produce OLED panels for large-screen TVs. LG Display plans to ramp up its production capacity to 90,000 panels per month by starting from 60,000 panels per month. The company is currently producing 700,000 panels per month at its E3 and E4 Factories in Paju, Korea, reaching production of 130,000 panels per month in the second half of next year. The company is expected to be able to ship 10 million 55-inch TV panels a year.
According to market researcher IHS Markit, OLED TV sales are expected to grow six-fold to 9.35 million units in 2022 from 1.59 million units last year. In particular, as demand for OLED TVs in China will rise sharply, OLED TV sales volume will increase 120% year on year in the third quarter of this year. Starting with LG Electronics in 2013, China's Skyworth, Konka, Changhong, Japan’s Sony, Toshiba, Panasonic and Europe's Philips Grundig, Loewe, Metz, Vestel and Bang & Olufsen are producing OLED TVs. China's top TV maker Hi-Sense joined the OLED TV group and is expected to launch OLED TV models this year.