LG Display to order OLED plant equipment for Guangzhou as of May
Kim Eun | silverkim@ | 2018-05-14 10:56:48

LG Display’s China Guangzhou Liquid Crystal Display (LCD) panel factory view. LG Display is under construction of a large OLED panel plant next to the plant to operate in the second half of 2019. Photo by LG Display

[Digital Times, Kim Eun] LG Display is expected to start ordering manufacturing equipment for construction of 8.5G OLED panel factory in Guangzhou, China this month. The company will invest KRW 1.8 trillion in the first half of next year and start operating the plant in the second half of next year. It will invest KRW 5 trillion to increase the proportion of OLED panel production by 2020. The company plans to rapidly shift its LCD-based sales structure to OLED by raising the proportion of OLED panel sales, which accounted for only 10% of total sales of KRW 27 trillion last year, to more than 40% in 2020.

LCD manufacturers such as China`s BOE have significantly increased their LCD output, and LCD panel prices have fallen and LCD profitability has deteriorated. The company produces the largest OLED panel in the world and is making high profit.

According to industry sources on May 10, LG Display recently delivered LOIs to major manufacturing equipment suppliers to officially order 8.5G OLED equipment in Guangzhou, China. Also, it will begin ordering equipment as early as this month.

LG Display will invest KRW 1.8 trillion and Guangzhou City will invest KRW 800 billion among the total capital of KRW 2.6 trillion to construct an 8.5-generation OLED plant in cooperation with Guangzhou City. It is currently waiting for investment approval from the Chinese government. The firm originally expected the Chinese government to approve the final investment in the first quarter of this year, but it is expected to be delayed to the second quarter. As a result, the operation of the OLED factory in Guangzhou has also been delayed from the first half of next year to the second half of next year.

Meanwhile, the company is currently supplying large-sized OLED panels for TVs to LG Electronics such as Sony, Haisens and Changhong, Chinese TV makers such as Germany`s Loewe, Turkey`s Arcelic and European Philips, and demand for OLED panels is growing rapidly. Once, the Guangzhou OLED plant in China starts, the 8.5G OLED production capacity of LG Display is doubling from 60,000 per month to 120,000 per month.

The company plans to place orders with related manufacturing equipment makers in the second half of next year in line with the schedule for operation in the second half of next year. Equipment partner received the LOI for deposition equipment and is expected to deliver it in the second quarter of this year according to the official order. JEON, which has supplied chemical vapor deposition equipment (PECVD), and INVENIA. It is expected to supply etching equipment, are expected to start ordering in the second quarter of this year at the latest and are adjusting the volume and equipment production time. An industry expert said, "Since Chinese TV makers also use LGD`s large-size OLED panel, investment approval of the Chinese government will be approved within the second quarter.”

By Kim Eun silverkim@

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