LG Display may be the world leader in LCD displays, but as Chinese manufacturers quickly close in on the South Korean company's lead, LG is seeking ways to broaden the gap between it and its rivals and secures its dominance in displays.
The latest reports about LG's affairs reveal the company is planning to invest about 10 trillion won or approximately $8.5 billion in the development of next-generation displays that use organic light-emitting diodes (OLED).
OLED displays, which are currently used in a few premium Android smartphones, such as the newly unveiled Samsung Galaxy Note 5, Galaxy S6 Edge+ and the Galaxy S6 Active, tout better color rendition and because they require no backlighting, are more energy-efficient than liquid crystal displays (LCDs). They are also excellent for use in devices with curved screens, such as smartwatches.
However, OLED displays are also much more expensive to produce, which is why only a handful of flagship smartphones have OLED displays. LG's OLED TV screens are also more expensive than comparable LCD TVs produced by other manufactures. For example, a 55-inch Ultra HD OLED TV by LG costs $5,500 on Amazon, while a Samsung LCD TV of the same size and resolution is only $4,000.
Still, LG hopes its multi-billion investment will encourage the adoption of OLED displays, particularly larger screens that can be used not just for TVs but also for automobiles and signage. LG also hopes to become the biggest player in OLED displays for flexible curved screens in smaller devices, including wearables.
Citing researched conducted by DisplaySearch, LG says the fledgling OLED industry is expected to grow to a $28.3 billion industry in 2022, more than tripling the $8.7 billion industry it was in 2014.
"While the plan (to focus on the OLED segment) aims to make LG Display a sustainable company, we must pioneer into the OLED industry in order to make South Korea beat rival countries and obtain dominance," Sang-beom Han, head of LG Display, tells the Korea Observer.
The news comes just a few months after BOE Technology Group, a display manufacturer based in Beijing, announced that it was investing 40 billion yuan or around $6.3 billion in a manufacturing plant that will produce large LCD screens for TVs in 2018.
During its last quarterly earnings report, LG posted a 12 percent growth in sales of LCD displays with better-than-expected operating profit of 488 billion won or $4 million, but the growth is far less than the 26 percent growth posted by the company in the previous quarter.
Photo: LG | Flickr