LG Display has completed construction of a large OLED panel plant in China and started production there.
LG Display (CEO Han Sang-beom) announced on Aug. 30 that LG Display's 8.5th generation (2,200mm x 2,500mm) OLED panel plant, located in Guangzhou, Guangdong Province, China, was completed on Aug. 29.
LG Display's Hi-Tech China is a 7-to-3 joint venture between LG Display and Guangzhou Development District, with a capital of 2.6 trillion won.
The 8.5th generation OLED panel plant, completed this time, will be built with nine stories above ground and a total floor space of 427,000 square meters on a 74,000-square-meter plot of land, the size of 10 football fields. After two years of construction since July 2017, the plant started mass-producing it in August.
When current LCD panel plants, module factories, business partners' complexes and auxiliary facilities are combined, LG Display's Guangzhou Cluster has a total of 1.32 million square meters.
LG Display is going to produce large OLEDs such as 55-inch, 65-inch and 77-inch panels with high resolution at its 8.5th generation OLED panel plant in Guangzhou. LG Display is planning to start producing 60,000 sheets per month and increase its maximum output to 90,000 sheets per month by 2021.
It is expected that LG Display will be able to produce more than 10 million OLEDs annually when it operates its 10.5th generation OLED plant in Paju, which is currently producing 70,000 OLED panels per month and 45,000 additional OLED plants that recently announced additional investments of 3 trillion panels per month.
"As LG Display's OLED plant is operating in Guangzhou, it is possible to respond more actively to demands for OLED TVs that are growing rapidly," said Han Sang-beom, vice chairman of LG Display. "Based on this, we will advance the trend of OLED in the premium TV market by providing more value in time to our customers."
It is likely that LG Display will be able to respond to demands for large OLED panels that are being pushed by LG Display as it operates its OLED plant in Guangzhou.
According to market research firm IHS, sales of 5.5 million OLED TVs are expected in 2020 and forecast to reach 10 million units in 2022 from 7.1 million units in 2021.
Reason why demands are increasing rapidly is because global TV manufacturers are joining OLED lines one after another.
Starting with LG Electronics in 2013, leading companies such as Skyworth, Konka, Changhong, Hisense, Sony, Toshiba, Panasonic, Philips, Grundig, Loewe, Metz, Vestel and B&O are producing OLED TVs. In 2020, Vizio, the largest U.S. TV maker, is expected to join the group, which will further increase its OLED TV lineup.
As number of OLED TV customers continues to increase, sales of large OLED panels surpassed 2.9 million in 2018, compared to 200,000 in 2013. Sales are expected to reach 3.8 million units this year. Due to increase in sales of large OLEDs, it is expected that LG Display will achieve its annual surplus for the first time in its large OLED business this year.
Why China? It is world's largest OLED TV market
China is both an opportunity and a threat when it comes to developing South Korea's display industry.
While Chinese panelists are threatening to continue to increase their market share under Chinese government support, the world's largest TV market is attractive.
China accounted for 22.8 percent of global TV sales in 2011, overtaking North America as the world's largest TV market. After rising to 25 percent in 2017, it continues to lead the global TV market.
China's LCD panel industry continues to increase production based on support from the Chinese government despite the global LCD industry's stagnation, worsening oversupply across the industry.
In particular, it is expected that sales of OLED TVs will increase sharply in China. According to IHS Markit, it expects sales of OLED TVs in China to reach 450,000 units in 2020 from 170,000 units this year, and surpass 700,000 units by 2021.
As production of panels in China, the world's largest TV market, is inevitable, LG Display is planning to supply its products in a timely manner.