LG Display to Invest $13.5 Billion to Boost OLED Production Over the Next 3 Years

LG Display to Invest $13.5 Billion to Boost OLED Production Over the Next 3 Years

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LG Display plans to invest $13.5 billion to boost production of OLED screens over the next three years, reports Reuters. The investment will help it compete against Samsung who currently dominates the manufacturing of OLED displays for smartphones.

The investment plans, roughly 25 percent more than its usual capital spending on an annual basis, also signal that the South Korean firm is shifting its focus to OLED from liquid crystal displays (LCDs) as demand for thinner and more flexible panels surge, analysts said.

While LG makes nearly all the large OLED screens for televisions, Samsung makes over 90% of the OLED displays for smartphones. With Apple planning to adopt OLED displays for the iPhone 8 and future models, LG needs to bolster its capabilities to capture orders moving forward.

The plans, which came in tandem with an 18-fold jump in second-quarter profit, includes a firm commitment to spend 7.8 trillion won ($7 billion) domestically by 2019. Around 5 trillion won is earmarked for a new line for flexible OLED aimed at bolstering its position in auto displays and smartphones while 2.8 trillion won will go toward a separate new line for large-size OLED screens. Both production lines will be located in Paju, northwest of Seoul.

Notably, analysts don't believe that this investment will be enough.

"For small and mid-sized OLED, it is expected to receive additional investment from somewhere else, perhaps Apple," said Lee Min-hee, analyst at Heungkuk Securities. "One production line for small and mid-sized OLED can require nearly 10 trillion won in investment. LG doesn't have the firepower to single-handedly build a lot of OLED production lines."

Interestingly, we have heard rumors that Apple could invest billions into LG OLED production lines. A recent report said Apple was looking at investing $1.75 to $2.62 billion into production lines that would be exclusively dedicated to the company's orders.

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LG Display to Invest $13.5 Billion to Boost OLED Production Over the Next 3 Years
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