LG Display to Invest 7.8 Trillion Won in OLED Production Line

Geronimo Vena
Luglio 25, 2017

South Korea's LG Display Co Ltd outlined plans to invest US$13.5 billion to boost production of organic light-emitting diode (OLED) screens over the next three years, aiming to ride surging demand for the flexible panels from TV and smartphone manufacturers. "This investment will give LG Display a new opportunity to leap forward", said LG Display Chief Executive Han Sang-beom.

Shares of LG Display closed at 32,800 won Tuesday, down 1.35 percent from the previous session.

This year, Apple made a decision to shift from LCD to OLED for its upcoming iPhone series, picking Samsung Display as its sole supplier. They are also more flexible and consume less power. In contrast, LG Display recorded an operating profit of 804 billion won ($720 million) in Q2 2017, however once again the company's performance in the second quarter was 22 percent weaker than in Q1 2017 when the firm registered an operating profit of 1.027 trillion won ($91.7 million).

The display maker is capable of producing 60 million units of OLED panels for 5.5-inch smartphones by 2018, and through the new investment it can produce 120 million units by 2019. Both production lines will be located in Paju, northwest of Seoul.

"For small and mid-sized OLED, it is expected to receive additional investment from somewhere else, perhaps Apple", said Lee Min-hee, analyst at Heungkuk Securities. "LG doesn't have the firepower to single-handedly build a lot of OLED production lines". LG Display said nothing had been confirmed about the investment made by global clients yet.

Industry watchers said the massive investment also reflects the company's confidence in its OLED products. The company already has an LCD panel production plant in Guangzhou that began mass production in 2014.

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