LG Display is predicting future televisions will be defined by curved organic light-emitting diode displays. / AP-Yonhap
Company to invest $3.6 billion in facilities, gets green light for China factory
By Kim Yoo-chul
LG Display, the leading provider of liquid crystal displays (LCDs), is now preparing an all-out effort to extend its dominance to the new world of digital displays shaped by organic light emitting diodes (OLEDs).
The company is to spend 3.8 trillion won (about $3.6 billion) this year on adding facilities and improving technologies with the predominant focus on improving its capabilities for OLED screens, becoming conventional in smaller devices like smartphones and tablets and beginning to appear in larger products like televisions.
OLED screens provide a stunning upgrade in picture quality and power consumption compared to conventional LCDs.
High costs and difficulty in mass production have been slowing their adaption in televisions, but major electronics makers like Samsung Electronics, LG Electronics and Sony believe they will see a breakthrough on this front this year.
LG Display, narrowly above Samsung Electronics in the global market share, is eager to exploit the boost in demand. The company has no plans to add to its existing LCD lines in Gumi and Paju.
''Of our investment budget, OLEDs will take up the biggest slice of money, followed by research for flexible displays and oxide-based LCD technologies,'' an LG Display official told The Korea Times.
''So while we are investing essentially the same amount of money we did last year, we are aiming for dramatically different purposes and results.''
The company's commitment to oxide-based LCD manufacturing is noteworthy and points to rising orders from top device makers like Apple.
Oxide LCDs are thinner and more power efficient than current LCDs and has been an area where Apple has been strengthening its investment. Industry observers believe there is a possibility that Apple will apply these screens on its next version of the iPad at the earliest.
LG Display also plans to mass produce bendable displays, intended for use in mobile devices, within the year.
''The Paju factory is likely to be developed as our base for developing oxide LCD screens and producing them,'' said another company official.
With Apple and Samsung trading shots in an uglier intellectual property dispute, which appears to be affecting their previous cooperative relationship in parts, LG Display is expecting to solidify its status as Apple's top display provider.
LG Display invested 3.7 trillion won last year in facilities and research in spite of a sluggish global economy. It expects things to be better this year with the popularity of mobile Internet devices like smartphones and tablets strengthening.
The company's investment will account for about 20 percent of the 20 trillion won investment committed this year by LG Group's technology affiliates.
While there has been speculation that the company might reconsider its plans to activate a new manufacturing base in China by 2014 considering worsening global conditions, LG Display officials confirm that the factory will be up and running on schedule.
There are some worries that the global display industry will experience another oversupply mostly due to aggressive output plans by leading Chinese LCD makers such as BOE and CSOT.
''Our top business priority this year should be to strengthen the leverage for OLED, ultra high-definition and film-patterned retarder 3D screens and we are ready to be more aggressive for the sale of LG's in-house in plane-switching-based screens for use in mobile devices and tablets,'' LG Display CEO Han Sang-beom recently said.
The top company executive also confirmed that there will be no compromises with Samsung over the ongoing legal battle with its biggest bitter rival Samsung Display.
''There will be no compromise. LG Display is trying to do our very best to open new markets with fair competition with Samsung. But this isn't the right timing for us to compromise,'' he said.
Since last year, the two have been involved in patent disputes after Samsung Display sued LG over the latter's infringement on some Samsung-owned display-related patents.
But the Ministry of Knowledge Economy is negotiating with the two rival companies with a senior MKE official reportedly meeting with LG Display CEO Han, while the official is scheduled to meet Samsung Display CEO Kim Ki-nam over the legal feuds.