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OLED TVs

LG Display OLED TV panel sales top 20 mn units on strong demand

Its OLED TV unit is set to see first-ever annual profit as premium TV demand surges; expands China production capacity by 50%

By Dec 22, 2021 (Gmt+09:00)

3 Min read

LG Display OLED TV panel sales top 20 mn units on strong demand

South Korea’s major display panel maker LG Display Co. is estimated to have sold more than 20 million units of organic light-emitting diode (OLED) TV panels for the first time since it started mass production of the high-performance displays in 2013.

LG Display is expected to log its first-ever annual profit from the OLED TV panel unit thanks to strong growth in global premium TV demand, industry sources said.

Accumulated sales of OLED TVs worldwide reached 20.5 million units as of end-November, according to market tracker Omdia on Dec. 21. All premium TVs produced globally were likely to be equipped with LG Display’s OLED TV panels since the company has been the world's only manufacturer of high-end screens for TVs.

OLED TV SALES BEAT FORECAST

Global TV sales are expected to decline overall as many consumers already bought new TVs on pent-up demand in the COVID-19 pandemic era, analysts said. More people are using smartphones and tablets to watch videos, hurting TV demand, they added.

On the other hand, sales of OLED TVs are increasing. Accumulated sales of OLED TV panels since 2013 topped 1 million units in 2016, 5 million units in 2018, 10 million units in 2020 and 20 million units so far this year.

Omdia recently again raised its OLED TV sales forecast for this year to 6.5 million units. The market tracker had already lifted the prediction to 6.1 million units from 5.8 million units. Rising prices of liquid-crystal-display (LCD) TVs prompted more customers to seek OLED TVs, while more video game players looked for premium TVs with better image quality and performance for games, industry sources said.

“Demand for high-definition TVs increased as people stayed home longer,” said one of the sources. “Users of online streaming services such as Netflix and Disney Plus prefer premium products since their eyes don't get tired when they watch such TVs for a long time.”

OLED TVs accounted for 36.7% of the global market of premium TVs that cost more than $1,500 per unit in the third quarter, up from 26% in 2019.

EIGHT-YEAR OLED INVESTMENT BEARS FRUIT

LG Display has reaped the rewards of the investment in large OLED panels for the last eight years, industry sources said.

When LG Display began mass production of OLED TV panels in 2013, its affiliate LG Electronics Inc. was the only seller of OLED TVs. But increasing demand for high-definition premium TVs around the world caused foreign home appliances makers to join hands with LG Electronics in producing TVs. In 2015, Japan’s Panasonic Corp. started buying OLED panels from LG Display, while Philips and Grundig in Europe followed suit in 2016.

Japanese TV makers, which had laughed at the South Korean company’s OLED panel development and one even saying “We’d rather climb Mount Fuji doing a handstand than make OLED,” are now unable to produce and sell OLED TVs without LG Display.

The company is maximizing the operation of OLED plants in South Korea and China to meet growing demand on surging OLED TV sales. It expanded the production capacity of its 8.5-generation OLED factory in Guangzhou, China, to 90,000 units a month from 60,000 units in the third quarter.
LG Display's plant in Guangzhou, China
LG Display's plant in Guangzhou, China

“We completed a production base to supply panels for 10 million TVs a year if we include production capacity of 80,000 units per month of the Paju plant,” said a company source, referring to its domestic factory in Gyeonggi Province.

LG Display is expected to report an annual profit from the OLED TV panel business in 2021 since its large OLED panel shipments are likely to increase in the fourth quarter, analysts said. The unit’s earnings are predicted to improve further next year, they added.

“LG Display OLED TV unit's annual sales in 2022 are forecast to grow 26% to 7.4 trillion won ($6.2 billion) on-year. Operating profit is likely to surge to 570 billion won,” said HI Investment & Securities Co. analyst Jung Won-seok.

Write to Sin-Young Park at nyusos@hankyung.com
Jongwoo Cheon edited this article.
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