Production costs for a 65-inch OLED have almost halved since 2020, and the downward trend is expected to continue next year, as OLED faces renewed competition from RGB LED in LCD TVs.
Do you remember the early days of OLED TVs when the industry claimed that OLED panels could eventually be cheaper to produce than LCD panels?
13 years later, we are still waiting patiently, but it finally seems that things are starting to fall into place.
Costs reduced by half in 5 years
LG Display has OLED factories in Paju, South Korea, and Guangzhou, China. In China, two-thirds of the factory's cost has already been paid off (depreciated), making it much cheaper to produce OLED panels, which in turn can help lower TV prices.
Combined with other cost-cutting initiatives, production costs are now almost half of what they were five years ago.
According to the industry sources, the production cost of a 65-inch OLED panel from LG Display was $1000 in 2020. By last year, the cost had dropped to $600, and it is expected to fall below $500 later this year, with further reductions projected for 2026.
- "Over the past two to three years, LG Display has pursued line expansions and yield stabilization to fully shift its revenue structure to OLED. This effort, which began paying off last year, achieved a 30% cost reduction from the previous year and is continuing this year. Next year, the company aims for additional production cost cuts through a design innovation that changes the display driver IC (DDI) structure," reported Korean newspaper Biz Chosun.
Cheaper than LCD?
While there is no guarantee that LG Display will pass all savings on to consumers – the company is still struggling with profitability – these reductions have already led to significantly lower prices for 77 and 83-inch OLED TVs this year.
Also read: TCL bets big on printed OLED with $4b investment
In fact, OLED TV panels may already have become cheaper to produce than LCD panels with RGB LED backlights – a new challenge OLED will face next year
- "In the case of RGB LED TVs, the cost of the LED chips that make up the RGB LED backlight accounts for most of the panel unit price," an industry source told Biz Chosun. "When you include the backlight and driver costs, it is effectively estimated at the $400–$600 level, similar to OLED panel production costs, and it could even be more expensive."
That still does not make OLED panels as cheap as traditional LCD panels, but it does give us hope for the next 5–10 years.
- Source: Biz Chosun
