LG Display will expand its advanced display business by entering the small-sized organic light-emitting diode (OLED) market currently dominated by Samsung Display, according to LG officials Thursday.
The expansion came as the display-making affiliate of LG Group has experienced falling profit margins in the liquid crystal display (LCD) market. The firm also aims to capitalize on brisk sales of LG Optimus smartphones manufactured by LG Electronics.
According to LG officials and market analysts, LG Display plans to make new investments in developing the small-sized OLED display business to produce flexible OLED displays from the latter half of this year.
''LG Display will produce an 'unbreakable OLED display' _ the first phase of flexible displays _ at our AP2 line of the 4.5th-generation plant in Paju, Gyeonggi Province. The move was aimed at taking a lead over rivals in the race for next-generation displays,'' said company spokesman Frank Lee.
The company plans to use the red-, green-, and blue (RGB)-based OLED technology for flexible OLED displays, said sources.
LG Electronics is the biggest shareholder of LG Display, with a 37.9 percent stake. Apple, Dell, Hewlett-Packard, Google and other leading Chinese tech companies are LG Display's main clients, and spend billions of dollars to buy LG-manufactured displays for their digital devices.
LG is also considering using its 6th-generation display line in the southern industrial city of Gumi as another manufacturing base for small-sized OLEDs but the decision has yet to be made, according to Lee.
''As LG is applying the low-temperature polysilicon (LTPS) technology on its facilities, it's not tough for LG to boost the production of small-sized OLEDs, shortly, according to demand from clients,'' said Dongbu Securities analyst Kwon Seong-ryeol.
The new business plan comes after LG defeated Samsung to sell curved OLED TVs for the first time in the world, Monday. While the two companies are battling for a bigger stake in the OLED TV market, LG already has started receiving pre-orders for its 55-inch OLED TVs outside Korea.
Samsung is far ahead of LG in consumer electronics ranging from TVs to handsets. But LG is now in a neck-and-neck race with Samsung in the OLED segment, which is widely seen as the next cash-generator for all display makers.
"LG has technologies and cash to sharpen its OLED business. But another key point is how LG will persuade its potential clients to use LG-produced OLED panels for their devices,'' said Kwon from Dongbu.
While OLED panels are now commonly used in mobile devices, LG still faces potential bottlenecks in ensuring supplies for its smartphone affiliate.
Analysts have already warned that the next-generation displays cannot be produced quickly enough to meet demand, which likely means high prices for a low number of products.