Concerns over Large OLED Panel Supply
As LG Display's mass production of organic light emitting diode (OLED) panel plant in Guangzhou, China was delayed for more than half a year, a red light was turned on for the supply of large OLED panels.
According to the related industry sources said on Feb. 18, the mass production time of the Guangzhou OLED factory, which LG Display announced would begin to mass-produce in August last year, has not set the date even in February. The plant has been running test operations for seven months since it stopped mass production with production yields lower than a desired level.
Meanwhile, LG Display's panel supply has been only half of a level it originally planned. Although late last year, 130,000 OLED glass plates should have been produced a month at the Paju plant in Korea (70,000 units per month) and the Guangzhou plant in China (60,000 units per month), actually, the actual production volume is standing at 70,000 units a month. Given that the Guangzhou plant can produce up to three 65-inch panels and two 55-inch panels per glass plate, 300,000 panels have not been supplied a month.
As a result, concerns over disruptions in large OLED panel supply are emerging in the market. Large OLED panels are supplied by LG displays only around the world. Although LG Display is fully operating its Paju OLED plant, it cannot meet all demands from global TV companies.
This year, U.S. Vizio, Chinese Xiaomi, and Japanese Sharp is expected to ramp up demand for large OLED panels by joining 15 other TV companies that already adopted large OLED panels including LG Electronics.
In particular, LG Display plans to begin mass production at its Guangzhou plant in the first quarter of this year. But even this may be delayed, display industry analysts say. This is because concerns have been raised that the spread of the COVID-19 in China will also affect production at the Guangzhou plant. In fact, uncertainty is growing ahead of the plant’s mass production as there been a delay in sending back some of Korean engineers who had been dispatched to the Guangzhou plant and returned to Korea to the plant.
As OLED panel supply contracted, they say, it will be inevitable for LG Electronics which launched an OLED TV popularization strategy for 2020 to be negatively affected in a chain reaction.
IHS, a global market researcher, had forecast that the total sales of OLED TVs in 2020 will stand at five million units, but recently lowered the forecast 10 percent to 4.5 million units.