Ltd. (LPL) said Monday it plans to spend 10 trillion won, or $8.46 billion, to expand its organic light-emitting diode displays or OLEDs business.
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As the two LG companies are the only major players pushing the technology for TVs, analysts and investors are skeptical whether they can by themselves create the economies of scale necessary to bring down prices enough for mass market adoption.
Rival Samsung Electronics uses OLEDs only for small-size devices such as smartphones, saying that big-size OLED TVs face challenges in prices and productions. While it is not confirmed whether the iPhone 6s would have LG as its main display maker, more will be known when the phone receives a teardown.
The company considers OLED as the next-generation technology and wanted to get ahead of the competition, Reuters reported.
A 55-inch OLED ultra-high definition curved TV made by LG Electronics was on sale for $4,999 on Amazon.com Inc’s U.S. shopping site, marked down from $5,499.99.
LG Display’s CEO said that while the Chinese firms will eventually catch up to South Korean makers in the LCD market, there is still an opportunity in the future displays.
“However there’s nonetheless a niche in OLED”, CEO Han Sangbeom stated at a information convention.
On the back of massive investments, South Korean electronics companies surpassed Japanese companies to become the world’s largest supplier of flat display panels in the early 2000s.
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.
But helped by government support, Chinese companies are quickly narrowing the gap with South Korean firms, threatening the Korean companies’ leading position.
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Another reason identified why the company redirected its investment in OLEDs was the decrease of LCD demand in the market. “However, industry growth is flattening”, Han Sang-beom, LG Display CEO, said to the participants during the company’s 20 anniversary celebration in Paju. The world’s largest maker of liquid crystal displays is betting on growth in demand for advanced displays, including foldable screens, for wearable devices, cars and televisions.
