LG Display's second OLED TV plant - and its first in China - will be put into full swing next month, the company confirmed today to Business Korea. It will double the world's production capacity for OLED TVs.
To double world's OLED TV capacity
In mid-2017, LG Display announced a $4.2 billion plan to build a second 8.5G OLED plant. While the first plant is located in South Korea, the second one will be located in Guangzhou, China.
It was today confirmed to Korean media that the new factory is currently doing test runs in preparation for mass production next month. LG Display is the only company capable of mass producing OLED TV panels and as such the new factory will double the world's production capacity from 70,000 to 130,000 substrates per month - and later 160,000 sheets.
- "We are continuing a test operation of the Guangzhou plant because it is scheduled to start mass production in August. Since we have experience in producing 8th-generation products in factories in Korea, we will not have any problem in the operation of the Guangzhou factory," an LG Display official told Business Korea. "The operation of the Guangzhou plant will boost the production of glass substrates from 70,000 units per month to 130,000 to 160,000 units per month."
Each substrate can be cut into smaller 55, 65, 77 or 88-inch OLED panels. LG Display expects production of OLED TVs to soar from 2.9 million last year to 3.8 million this year, 7 million next year, and 10 million annually by 2021.
At its new Guangzhou production line, LG Display will reportedly also for the first time apply MMG (multi-model glass) production techniques. This will allow the company to produce additional panels from a single sheet, potentially leading to production cost reductions of 10-20%.
Shift from LCD to OLED
With its second OLED TV factory in operation, LG Display is planning to swiftly shift from LCD to OLED. Last year, OLED panels accounted for over 20% of the company's total sales. It is expected to exceed 30% this year and reach higher levels next year.
In recent quarters, LG Display has suffered operating losses due to fierce competition from Chinese panel makers in the LCD market. Japan is also threatening to put into effect trade restrictions on materials used in OLED production as part of the ongoing trade dispute between South Korea and Japan. This could halt production of OLED panels at Samsung and LG's factories in Korea but the new China factory will continue to operate unaffected, LG Display said.
- "Since the Chinese factory is procuring display parts locally, it is free from Japan's export regulations," an LG Display official said.
Starting next month, LG Display will operate two 8.5G OLED factories. The company is also setting up a more advanced 10.5G factory in Paju, South Korea. This factory will enable it to mass produce larger OLED TVs and to reduce production costs.
So what can consumers expect? The company is currently rolling out a larger 88-inch 8K OLED panel and will roll out a smaller 48-inch 4K OLED panel in 2020. Panels produced in Guangzhou will typically be earmarked for China's TV market but economies of scale should lower production costs back in Korea, too.