LG Display to invest $925.4 mn in smaller, high-end OLED

LG Display Co., the world’s top large-sized organic light-emitting diode (OLED) panel maker, will invest 1.26 trillion won ($925.4 million) to develop smaller, next-generation OLED technologies to reinforce its position in the fast-evolving display segment.

The company said that its board of directors on Tuesday approved a plan to invest 700 billion won into the addition of new lines dedicated to next-generation OLED panels in its Paju plant, about 30 kilometers north of Seoul, and the remaining 560 billion won in its OLED module plant in Hai Phong, Vietnam, over the next two years.

This plan confirmed earlier media reports of the company’s possible 700 billion won injection to boost small- and mid-sized OLED production in Korea.

LG Display will finance the investment using proceeds from the sale of its liquid crystal display (LCD) plant in Guangzhou, China. Last year, China Star Optoelectronics Technology (CSOT), under China’s electronics giant TCL Technology Group, took over LG Display’s LCD plant for 2.25 trillion won.

The Korean company has already used 1 trillion won of that amount to repay debt.

The company now aims to bolster its small- and medium-sized OLED display capabilities with next-generation technologies to narrow the lead held by its cross-town rival Samsung Display Co. in the segment, which is redefining the display landscape.

TO CATCH UP TO SAMSUNG DISPLAY

LG holds the world’s largest market share in large-sized OLED panels for TVs, whereas Samsung commands the market for smaller OLED panels optimized for smartphones and tablets.

LG Display controlled 19.0% of the world’s small- and mid-size OLED market in the first three months of this year, well behind Samsung Display’s 40.9% share, according to market research firm Omdia.

LG was just 0.5 percentage point ahead of China’s BOE Technology Group Co., which ranked third.

While Samsung has led development in the smaller OLED panels, becoming the world’s first to develop 8.6-generation OLED panels, LG has focused on large-screen OLED displays.

But surging demand for small- and mid-sized OLEDs in smartphones, PCs and vehicles has prompted a strategic shift.

OLEDs consume less power than LCDs and emit light without a backlight, making them also ideal for power-intensive AI devices, further driving demand for smaller OLEDs.

This shift has led LG to prioritize premium small- and medium-sized OLED panel development.

The global OLED market is also forecast to grow to $68.6 billion in 2028, becoming a mainstream display technology.

TO WIDEN THE LEAD WITH CHINESE RIVALS

The latest investment decision also comes as Korean display makers, once unrivaled global leaders in the display market, are facing increasing competition from Chinese rivals rapidly closing the technology gap. 

LG Display’s decision to expand domestic capital expenditure is part of its efforts to fend off Chinese peers in the premium display market.

As of the first quarter of this year, Chinese players’ combined share in the market for 9-inch and smaller displays stood at 54.5%, outpacing Korean displays with 41.7%.

Still, Korea’s display technology is considered superior to that of Chinese peers, whose OLED panels are mainly embedded in local brands’ smartphones and Apple Inc.'s budget iPhone models.

By relocating its high-end OLED R&D and manufacturing to Korea, where the risk of technology leaks is lower than in foreign countries, LG Display looks to widen its lead in OLED technology against Chinese rivals with more advanced OLED technology development.

Write to Eui-Myung Park and Chae-Yeon Kim at uimyung@hankyung.com

Sookyung Seo edited this article.