It took five years but LG Display’s OLED TV panel business has now “turned to profit in the third quarter of 2018”, the company noted in its earnings report. LG Display sees 2018 and 2019 as critical years for OLED.
OLED TV production now profitable
LG Electronics – the consumer electronics division – recently reported record profits driven in large part by the sales of OLED TVs. However, it took a little longer for underlying OLED TV panel production business to turn profitable. LG Display confirms that this happened in the third quarter of 2018.
- “[LG Display’s] OLED TV panel business has finally turned to profit in the third quarter of 2018, after five years of growth. The sales volume of OLED TV panels has increased to over 1.7 million panels in 2017, a jump from only 200,000 in 2013, driven by successful global sales,” the company noted in its earnings report.
LG Display pioneered large-size OLED TV panels. It started its journey in 2013 with curved HD OLED panels but has since switched entirely to flat OLED panels and moved to 4K, HDR, and soon 8K. The company has also introduced “wallpaper OLED”, which is used exclusively in LG’s W OLED TVs, and “Crystal Sound OLED”, which is used exclusively in Sony’s OLED TVs.
LG Display is currently the exclusive supplier of OLED TV panels to companies such as LG Electronics, Sony, Panasonic, Loewe, Grundig, B&O, and Philips, and expects to sell a total of 2.9 million OLED TV panels to its partners this year. Production has doubled in the first half of 2018 compared to the same period in 2017. The company expects to almost double production capacity again in the second half of 2019 once its second OLED TV factory comes online in Guangzhou, China.
In the third quarter of 2018, LG Display posted a net profit of 18 billion Won for its production of display panels that also includes LCD panels. It has posted a loss for the past two quarters. The improved results were driven by increased sales of OLED and an increase in LCD panel prices, the company noted.
2018 and 2019 are “critical years” for OLED
In its earnings report, LG Display commented that it sees 2018 and 2019 as critical years as it transforms to an OLED-focused business.
- “2018 and 2019 are critical years for LG Display as it transforms into a more OLED-focused business structure. We will do our best to maximize profitability by expanding our OLED business portfolio while accelerating our pursuit of a differentiated strategy for our LCD business.”
It is currently setting up a 10.5G plant that will be capable of producing larger and more advanced OLED TV panels. One of the next steps is also rollable OLED. In addition, the company is trying to expand the list of partners. One of the latest to join is Hisense who will soon start selling its first OLED TV.
LG Display has already invested billions of dollars in OLED production capacity but a major challenge is to expand the business to the mainstream segment where LCD still rules supreme. New display technologies such as microLED are also emerging to challenge OLED at the high-end. On the other hand, Samsung may soon join LG in producing OLED TV panels, which will give the segment a boost. Samsung is focusing on a so-called QD-OLED variant.
It took a little over five years but LG Display’s OLED TV panel business is now profitable as the company moves aggressively to expand capacity. The next few years will reveal if OLED can take the next step and conquer the mainstream.