Alliance with Apple
LG Display is expected to greatly increase total shipments of flexible OLED displays this year, thanks to the launch of Apple's iWatch.
According to market research firm DisplaySearch, LG Display is likely to supply more than 120 million flexible OLED panels for the iWatch to Apple this year, assuming that the yield rate reaches 65 percent. In light of last year's situation where there were just a few sales of small and mid-sized Flexible OLEDs, the number of supplies for this year is a sharp increase.
As Apple is expected to showcase its iWatch as early as September, LG Display, which hasn't yet been able to distinguish itself in the small and mid-sized OLED market, is also likely to intensify efforts to increase its market share through flexible OLED panels.
Experts in the industry and the stock market have different opinions about the sales volume of the iWatch in the future, but many observers say that around 4 million units will be sold per month. Morgan Stanley predicts that the new smartwatch will sell as many as 600 million units in the first year of its release.
Last year, Samsung Display, the supplier of AMOLED panels for the Galaxy S series and Galaxy Note series, accounted for 99 percent of the small and mid-sized OLED market. LG Display seems to be determined to launch a large-scale offensive to increase its market share, helped by the introduction of the iWatch this year. Conditions to target the market have apparently been met, since LG Electronics, a major customer company of LG Display, is also gearing up to unveil a new smartphone with a built-in flexible OLED screen in the latter half of this year.
As a result, LG Display is enlarging its production lines to produce flexible OLED displays. The company is enlarging the 4.5-gen production lines to make small and mid-sized flexible OLED panels in Paju, Gyeonggi Province, and it is currently considering whether or not to install new lines in Gumi, North Gyeongsang Province.
The industry anticipates that the flexible OLED market will grow rapidly, since Apple will penetrate the smartwatch market soon. DisplaySearch expects that the market, valued at US$370 billion last year, will annually grow by 151 percent on average to reach US$23.4 billion in 2020.
An industry source said, “LG Display, which has been lagging far behind its competitor in the small and mid-sized OLED market, is likely to greatly increase its share, owing to its supply of flexible OLED panels for the iWatch to Apple.” The source added, “The competition between Samsung and Apple in the smartwatch market would turn the flexible OLED market into a battle between Samsung and LG Display.”
Meanwhile, US-based IT news site MacRumors reported on August 19 (local time) that LG Display will become the main supplier of display panels for the iPhone 6, which is also scheduled to be introduced in September. Sources were quoted in the report as saying that LG Display emerged as the largest supplier, beating Samsung, Sharp, and Japan Display.
According to industry sources, the iPhone 6 is going to be rolled out in 4.7 and 5.5 inch versions. LG Display, Japan Display, and Taiwanese company Innolux will mass produce 4.7 inch displays, but only LG Display and Japan Display will supply displays for the 5.5 inch model, which is likely to be released under the name of the iPhone 6L.
In particular, sapphire crystal displays are expected to be used in some of the 5.5 inch models. An industry source confirmed that by saying, "New technologies like sapphire crystal displays will be used in the 5.5-inch version, and the model is expected to be produced by LG Display and Japan Display."
However, it is unclear how much LG Display will be in charge of the total supplies of the iPhone 6. Industry analysts are saying that Apple will produce up to 100 million units by the end of this year, and thus suppliers of the new handset are expected to become major beneficiaries. In particular, LG Display is predicted to improve performance, because 4.7 inch displays are 38 percent as large as existing 4 inch panels, and 5.5 inch displays are larger by 89 percent.