Negotiations With Japan’s Sony Still Underway on TVs
LG Display CEO Kwon Young-soo
By Kim Yoo-chul
LG Display, the world’s No. 2 supplier of liquid crystal display (LCD) panels, plans to invest more in its newly-launched next-generation display business.
``We have abundant cash, so we have room to increase our capital spending for the active-matrix organic light-emitting diodes (AM OLED) business,’’ CEO Kwon Young-soo said in a telephone interview with The Korea Times, Friday.
According to analysts, LG Display will reap at least 3 trillion won in operating profits this year thanks to the global market boom for flat-screen television sets.
``We are still watching the market to seek a proper time to implement decisive action,’’ Kwon said. He, however, declined to give detailed financial figure.
Until earlier last month, the company was negative about the mass-production of AM OLED.
The AM OLED industry will see rapid growth over the next few years, with global panel revenue rising more than 36 percent annually from 2007 to 2013, according to iSuppli, a market research firm.
Despite high error rates in production of larger size panels ― the biggest obstacle in price competition ― AM OLEDs are widely regarded as ``dream displays’’ due to their advantages in color, brightness, response time and thickness than conventional LCDs.
Inspired by rising demand for high-end multimedia devices, local and overseas display makers including Sony are pouring billions of dollars into research and development (R&D) of the next-generation displays to take advantage of the opportunity to charge premium prices.
Right Decision for Samsung
Kwon’s remarks come a few days after Samsung Electronics officially admitted interest in boosting its AM OLED business by combining its production line with that of Samsung SDI.
``For me, it seems evident for Samsung either to combine the AM OLED unit with that of Samsung SDI or even to create a joint venture,’’ Kwon said, citing the brighter prospects for the market.
In a move toward the highly-promising segment, LG Display has been accelerating efforts to commercially produce AM OLEDs after setting up a dedicated department on June 12 at its plant in Gumi, North Gyeongsang Province.
It separated the AM OLED R&D, production and sales organization from the Mobile Business Division to enhance it. The LCD unit was restructured into mobile the LCD division and four AM OLED divisions.
LG is highly likely to move its 3.5-generation AM OLED line to its complex in Paju, Gyeonggi Province, following the relocation of the two-generation production line in Gumi.
``The recent reorganization doesn’t have any links with the latest moves by Samsung Electronics. We don’t think the market will be hugely impacted just because of the Samsung moves,’’ he said.
LG Display uses low temperature poly-silicon, or LTPS technology, which SDI has adopted for its four-generation line, for early mass production, according to company insiders.
``Again, flat-screen technologies have rapidly been advancing. However, what’s important for us is to decide the right timing for investments,’’ he added.
The company developed an AM OLED for a 20.1-inch television in 2004, and was the first in the world to produce a four-inch flexible OLED in May 2007.
On the question of a partnership with Japan’s Sony to supply LCD panels for TV sets, Kwon said no breakthrough has yet been made.
``We are still talking with Sony (for the deal),’’ he said, adding recent discussions focused on boosting a partnership in the information and technology sector. LG Display is concentrating on providing medium- and large-sized panels used in PCs.
Grabbing bigger clients to sell its panels has emerged as an urgent task for the company to ease concerns over its profitability as Dutch-based Philips has been dumping its stakes in its South Korean joint venture.