LG Display Benefiting From Bold Investment
By Kim Tong-hyung
Staff Reporter
Liquid crystal display (LCD) vendors had already been bracing for a dismal period when the financial crisis hit in late 2008 and decimated stock markets.
During the shaky start to 2009, LCD makers were stomping on the panic button, scrambling to cut production, reduce inventory and shave payrolls to cope with the expected decline in consumer electronics demand.
However, LG Display, which is competing with domestic rival Samsung Electronics for the title of the world's largest LCD maker, attempted to exploit the softened competition instead and kept production afloat while continuing to invest in order to add muscle to its eighth-generation and sixth-generation lines.
It would be safe to say that the company's gamble paid off handsomely, as credit-crunched consumers found just enough money to maintain a healthy market for LCD televisions and the growth in emerging economies, such as China, made up for the lost sales in advanced nations.
LG Display now finds itself in a stronger position than even before the economic turmoil, advancing far ahead of its Taiwanese rivals such as AU Optronics (AUO) and Chi Mei Optoelectronics (CMO) and upping the ante in its rivalry with Samsung Electronics.
According to market researcher, Display Search, LG Display led all large-sized (over-10-inch) LCD panel shipments with a 24.9 percent global share for 2009, followed by Samsung Electronics with 24.5 percent, AUO with 17 percent and CMO with 14.2 percent.
Large-sized LCD panels are used in a variety of digital products, such as flat-screen televisions, computer monitors and laptop computers. Although LG Display gained the upper hand in shipments, Samsung Electronics remained the leader in both areas and revenue for 2009, Display Search said.
``The Korean LCD makers are on a roll and appear to have established an undisputed leadership, combining for 50-percent-plus of the market share in both shipment and revenue,'' said Display Search's Chung Yoon-sung.
``Both Samsung Electronics and LG Display have been churning out more than 10 million units per month since April last year, and we expect them to achieve further growth this year, since the demand is expected to stay strong throughout 2010, without the usual late season dips.''
Raising the Bar
LG Display has been maintaining its aggressiveness in research and development (R&D), continuing to send new technologies and products out the gate in a battle over bragging rights with Samsung Electronics.
``When Japanese companies ruled the information-technology sector, they consistently invested in new technologies even though they weren't ready for the market. This was important because, when the technologies and products become ripe for commercialization, other companies didn't have a prayer of competing in those new markets,'' said an LG Display official.
``This is how the LCD market is, and it could be said that our current strategy takes a page from the old Japanese playbook. We want to build a paradigm that allows us to be `sustainable' at the top.''
For this year, LG Display is intent on expanding its global market share, but also improving profit margins. The company is expected to benefit from its expanded eighth-generation line that is soon to be on the market, and its investment in new technologies such as organic light-emitting diode (OLED), solar screens and flexible displays could begin to reap tangible results.
The company has spent around 3.27 trillion won (about $2.9 billion) to expand its eighth-generation line at its LCD cluster in Paju, Gyeonggi Province. The new line will be launched with a monthly capacity of 60,000 input sheets of glass substrates this year and possibly 120,000 sheets during 2011.
The strengthened eighth-generation line will allow the company to meet the growing demand generated from LCD televisions, especially in the 50-inch range, LG Display officials said.
LG Display, along with two or more Chinese makers, is also favored to gain the Chinese government's approval to build an LCD line in the country. China is expected to give out four or five licenses, and LG Display appears to have an upper-hand over Samsung Electronics over the spots going to foreign companies, as it is promising an eighth-generation line, compared to Samsung Electronics' commitment to offer only a 7.5-generation line.
LED backlighting systems, three-dimensional (3D)-capable displays, and touch screens are some of the technologies LG Display believes it could differentiate in.
The company is expected to support larger LED-backlit LCD televisions, up to a 72-inch range, while also enhancing response time and enabling ``local dimming,'' which lets the backlight dim or turn off in areas across the screen, helping to improve picture quality.
LG Display is also investing in active matrix OLEDs (AMOLEDs), expecting to produce its first AMOLED products at its Paju cluster within months and targeting the market for handheld mobile devices.
The company is also investing in technologies to develop large-sized OLED screens for televisions, while also investing in solar cells and flexible displays. In January, the company unveiled a 19-inch flexible electronic paper screen, almost the size of a tabloid newspaper and claimed it as the largest e-paper display yet produced.