LG Display’s OLED panel production line in Guangzhou, China, is set to go into full operation in early 2020, improving the company’s performance, Hi Investment & Securities forecast on Dec. 12.
“LG Display needs to operate the OLED line in Guangzhou to expand its OLED TV panel shipments from next year,” said Jung Won-seok, a researcher at Hi Investment & Securities. Currently, LG Display’s OLED production lines in Korea are operating at a rate of about 90 percent. Initially LG Display was expected to start the operation of the OLED plant in Guangzhou in August this year, but the schedule was put off due to a delay in yield stabilization work.
“LG Display will reduce the weight of the money-losing LCD panel business in sales and fill the void with large OLED panels, which are profitable,” Jung said. If LG Display shuts down a significant portion of the 7th- and 8th-generation lines in Korea beginning early next year, its LCD TV panel shipments are expected to fall by about 16 million units next year. But as the average price of an LCD panel is as low as US$90, the cut in LCD production will have a limited impact on LG Display’s earnings. On the other hand, the average unit price of OLED TV panels is expected to reach US$700, even if panel prices are lowered within the range of cost saving to expand the OLED TV panel market.
“LG Display’s overall sales will grow by more than 1 trillion won in 2020 compared with this year due to increased shipments of OLED TVs,” Jung added. “The company is expected to post 24.5 trillion won in sales and 396 billion won in operating profit in 2020.”