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LG Display Accelerating Shift from LCDs to OLEDs
Shifting Focus to OLEDs
LG Display Accelerating Shift from LCDs to OLEDs
  • By Kim Eun-jin
  • October 10, 2019, 17:52
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LG Display Co. is accelerating its shift from liquid crystal display (LCD) panels to organic light emitting diode (OLED) panels.

LG Display Co. is accelerating its shift from liquid crystal display (LCD) panels to organic light emitting diode (OLED) panels as profitability of its LCD business is worsening due to a steady drop in LCD prices.

The proportion of LG Display’s OLED sales in its total sales is expected to be only 17 percent this year, according to market research firm IHS Markit on Oct. 9. The company recorded a loss for two quarters in a row until the second quarter and posted 500 billion won (US$418.69 million) in operating loss in the first half of this year alone. LG Display has recently been carrying out restructuring of its LCD business..

The company’s profitability is forecast to improve starting next year as the proportion of OLED sales will increase at a fast pace. LG Display is planning to close down its LCD production lines and expand OLED production. The company’s 8.5-generation OLED fab in Guangzhou, China, started mass production of OLED panels in August.

In July, the company announced a plan to make an additional investment of 3 trillion won (US$2.51 billion) in its 10.5-generation OLED production lines in Paju. Accordingly, LG Display is expected to see the share of OLEDs in its total sales increase to 29 percent. In particular, sales of large OLED TV panels will surpass those of LCD panels next year as it has started operation of its plant in Guangzhou.

IHS Markit said LG Display’s sales of LCD TV panels and OLED TV panels are estimated at US$6.20 billion (7.40 trillion won) and 2.80 billion (US$3.34 trillion won), respectively, this year. But sales of OLED TV panels will come to US$4.50 billion (5.37 trillion won) next year, surpassing US$3.09 billion (3.69 trillion won) of LCD panels. The company is forecast to raise the ratio of OLED sales to 41 percent by 2022 and 49 percent by 2024.

The recovery in LCD prices will also help LG Display’s shift to the OLED business and improve performance. If the LCD business keeps showing a downturn, LG Display’s plans to shift to the OLED business can also be delayed.

“With South Korean firms’ restructuring of their 8.5-generation LCD production lines and the production adjustment of Chinese and Taiwanese companies, LCD panel prices will not go down further and stabilize starting from the fourth quarter this year. It will show an upward trend starting from the second quarter of 2020 due to seasonal effects and the Tokyo Olympic,” IHS Markit said in a report.

Not only LG Display but also Samsung Display is shutting down the LCD business and focusing on the OLED business. Samsung Display’s proportion of OLED sales are expected to rise from 73 percent in 2018 to 93 percent in 2024.