LCD has become a stumbling block to LGD's development of OLED
Although LG Display (LGD) continues to increase the production capacity of large-size OLED panels, it is expected to still be unable to keep up with the rapidly increasing demand. Affected by the continuous increase in the volume of LCD panels in Mainland China and the decline in LCD panel prices, LGD's operations are in trouble and have to enter an extraordinary period of management system and revise the panel business strategy.
South Korean media Financial News pointed out that the number of OLED TV brand companies has increased to 14, driving the increase in demand for large-size OLED panels, but currently only LGD produces large-size OLED panels in the world. LGD estimates that large-size OLEDs will be in 2018 Panel shipments will increase to 3 million units, compared with 1.7 million units in 2017, the annual growth rate is close to 80%.
According to the report of the market research agency IHS Markit, the shipment of TV OLED panels in the first quarter of 2018 was 602,000 units, and it is estimated to be 673,000 units in the second quarter of 2018 and 743,000 units in the third quarter. , The fourth quarter is 804,000 units.
LGD's large-size OLED panel production is mainly based on the 8th generation factory in Paju. In order to meet market demand, the 8.5th generation OLED panel factory in Guangzhou, mainland China is planning to build. People in the South Korean industry pointed out that despite LGD's full expansion of production, it may still be unable to keep up with the increase in demand, and the tight supply and demand of large-size OLED panels may continue for some time.
Various brands of OLED TV products compete with each other, which is expected to drive price declines and rising demand. OLED TV products such as Sony and Panasonic will reduce their prices by 20~30% compared with 2017. LG Electronics (LG Electronics) ) The price of the new 55-inch OLED TV has also been reduced from US$4,000 in 2017 to US$2,500 in one go, a drop of nearly 40%.
On the other hand, the production capacity of LCD panels in Mainland China continues to increase, and LCD panel prices continue to decline. The LGD panel business has been hit hard and has to revise its business strategy.
The Korean media Newspim quoted industry news and pointed out that LGD is building a 10.5 generation P10 factory in Paju, Gyeonggi Province, South Korea. This P10 factory will not consider LCD panels, but will directly build a 10.5 generation OLED panel factory.
People in the South Korean industry pointed out that in addition to building the P10 plant in Paju and expanding the supply of OLED panels, LGD’s other plans also include converting the LCD panel plants P7 and P8 to produce OLED panels. Does it currently pass and implement this? I am afraid that this conversion investment is still unknown.
Although the LCD production capacity of panel companies in mainland China continues to increase and LCD panel prices continue to decline, 90% of the LGD panel business’s revenue still relies on LCD panels, and LCD revenue accounts for much more than OLED panels. LGD is unable to fully develop the stumbling block of OLED business.
Relevant LGD said that under the fierce offensive of panel companies in mainland China, LGD should quickly turn to OLED and cultivate the rapid growth of the OLED market. However, considering the conversion of production line funds and the possible impact of the company's revenue performance, it is not easy for LGD to fully develop OLED panels. In the short term, it can only try to keep LCD and LCD for Samsung at the same time.
According to a recent report issued by the Korea Trade and Insurance Corporation, OLED panels account for only 10% of LGD’s revenue. From 2017 to the first quarter of 2018, LGD’s large-size OLED panel business has achieved some results. , But affected by the decline in LCD panel prices, LGD began to lose money in the first quarter of 2018.
Compared with LGD’s cautiousness, most experts in the South Korean industry believe that the future of Korean LCD panels is worrying. LGD should speed up the shift to OLED. In addition to converting the current LCD production line to produce OLED panels, small and medium-sized The pace of OLED panel E6 plant construction should also be more active.
Earlier news came out from the industry that China’s mainland panel companies Huaxing Optoelectronics and Samsung Display may be preparing to mass produce large-size OLED panels in 2021. These emerging large-size OLED panel companies , And plans to introduce an inkjet printing process, which is expected to save more material costs compared to the vacuum evaporation process currently used by LGD.
The Korean media Money Today quoted a securities analysis report and pointed out that in the second quarter of 2018, LGD’s estimated loss was 132.4 billion won, an increase of 35% from the previous quarter’s 98.3 billion won, and the loss continued to expand. This is due to the continued decline in LCD panel prices and the increase in OLED panel investment. In addition, in the second quarter of 2018, LGD's net loss is estimated to be 106.1 billion won, which will be about twice the amount of 59.4 billion won in the previous quarter.
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