LG Display Co is close to starting OLED production at a new factory in Guangzhou, China, to sell more of the next-generation screens, even as Chinese rivals gear up to enter the market.
The South Korean display maker will each month manufacture 130,000 OLED plates (which are divided into screens) once it gets China’s go-ahead for the expansion of the plant, LG Display chief technology officer Kang In-byeong said.
Although delayed, he is expecting approval soon.
Another facility north of Seoul will probably make OLEDs as well, as LG is winning orders to make screens for premium carmakers for models next year, Kang said.
Used in Apple Inc’s iPhone X and Samsung Electronics Co’s top-end smartphones and LG’s high-end TVs, OLED screens use less power and show more accurate colors than LCDs.
Their ability to flex and bend makes the technology more appealing for smartwatches, premium phones and dashboards in luxury automobiles.
While LG Display and Samsung have made South Korea the world’s biggest OLED supplier, the companies know they are facing challenges as China steps up investment.
“Opportunities and risks co-exist in China,” Kang said in an interview. “We thought China would welcome us with open arms, but it’s holding off on the approval a little. It’s all a process. Display makers see us as a rival, while local customers welcome us.”
Seoul-based LG Display said in January that it was planning to spend 20 trillion won (US$18 billion) by 2020 on OLED production, forecasting that output would more than double and make up 40 percent of sales.
The company’s LCD business is already facing lower margins as Chinese rivals step up manufacturing, creating a glut of screens and crimping prices.
As a result, Chinese display makers are also getting serious about OLED. BOE Technology Group Co., which gained market share through aggressive pricing and sacrificing profitability, is now turning its attention to OLEDs.
The competition is starting to hurt. LG Display posted its first operating loss in six years and Samsung’s display unit saw its income cut 70 percent in the first quarter.
“It’s not about Samsung versus LG,” Kang said. “It’s about Korea versus China.”
Still, South Korea remains about four to five years ahead of China in OLED technology, Kang said, adding that LG Display began mass-producing OLED televisions in 2013, something BOE and Shenzhen China Star Optoelectronics Technology Co have yet to do.
“It’s fortunate we have something called OLED, and China isn’t yet good at it,” Kang said. “Our biggest concern is how competitive we can be using OLED and how long we can stay so.”
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