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Display panels

LG Display to invest $2.8 billion in small OLED line to rival Samsung

LG’s investment could trigger a turf war with Samsung Display in both the small- and large-sized panel segments

By Aug 17, 2021 (Gmt+09:00)

3 Min read

LG Display is investing heavily to make small panels for smartphones, tablets and laptops.
LG Display is investing heavily to make small panels for smartphones, tablets and laptops.

South Korea’s LG Display Co. said on Tuesday it will invest 3.3 trillion won ($2.8 billion) in small-sized panels for smartphones and tablets to gain ground against segment leader Samsung Display Co.

The investment will be made through March 2024 to expand facilities for sixth-generation organic light-emitting diode (OLED) substrates measuring 1,500 mm x 1,850 mm, the company said in a regulatory filing.

Upon completion, LG’s small-panel production capacity at its Paju plant will double to 60,000 units a month from the current 30,000 units, it said.

Analysts say the planned investment will help LG, the dominant player in the large-sized OLED panel segment for TVs and monitors, compete with its bigger rival Samsung Display, which controls more than two-thirds of the small- and medium-sized panels.

According to industry tracker Omdia, LG had 15% share of the 9-inch and smaller OLED panel market in the first quarter, lagging far behind market leader Samsung’s 70%. China’s BOE is a distant third with 7.4% market share.

In the larger OLED panel segment, however, LG controlled 84.4% of the global market, followed by Samsung at 13.2%.

With years of consumer confidence in LG’s large panels, the company now aims to increase sales of smaller panels, which are in growing demand.

OLED is highlighted by self-illuminating pixels that do not require a separate light source, allowing manufacturers to produce lightweight, thin and flexible display products, appealing to high-end consumers.

OLED panels are increasingly becoming mainstream in the smartphone display segment. More than 40% of all smartphones to be unveiled globally this year will be equipped with OLED panels.

In May, Samsung Display said it is investing 3 trillion won to build a new OLED line for smaller panels at its Asan plant to keep its market leadership amid intensifying competition.

LG Electronics' OLED TV
LG Electronics' OLED TV

CLOSING RANKS WITH APPLE

Industry officials said LG’s facility expansion could be designed to meet rising OLED panel demand from Apple Inc., one of its key clients.

Apple has for years relied on Samsung Display for small OLED panels used in its iPhones, but recently began to diversify its procurement sources. Apple’s purchase of such panels from Samsung is known to have dropped to around 65% of its total small OLED panel procurement this year, from 85% previously.

LG Group has been strengthening its partnership with Apple since its home appliance unit LG Electronics Inc. declared in April that it is exiting from its loss-making mobile phone business.

LG Electronics said last month it will begin to sell Apple's iPhone and other Apple products at its retail stores, LG Best Shop, across Korea from mid-August.

Industry officials said LG Display will likely raise its supply of smaller OLED panels to Apple with the ramp-up of its Paju facilities, as Apple is increasingly adopting OLED panels for its next-generation iPhones and iPads.

Samsung Display’s 7.2-inch multi-foldable OLED panel
Samsung Display’s 7.2-inch multi-foldable OLED panel

SAMSUNG’S COUNTERATTACK

Meanwhile, Samsung Display aims to expand its presence in the larger OLED panel market, where LG is the dominant player.

Samsung Display recently said it plans to begin the mass production of quantum dot or QD-OLED panels used for large-sized TVs and monitors in the fourth quarter of this year.

Samsung Electronics, the world’s largest TV maker, is developing 55-inch and 65-inch QD-OLED TVs for market launch in the first half of 2022, sources said last month.

Samsung Electronics is expected to showcase its first-ever QD-OLED TVs during next year’s Consumer Electronics Show (CES) in January, according to the sources.

QD-OLED is a hybrid design that combines the brightness and colors of quantum dot technology, found in Samsung’s existing flagship QLED TVs, with backlighting from self-emissive OLED panels.

Write to Su-Bin Lee at lsb@hankyung.com
In-Soo Nam edited this article.
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