LG Display expected to be even stronger next year

LG Display CEO Jeong Ho-young, center, speaks during the company's annual tech forum held online, Oct. 7. Courtesy of LG Display

By Baek Byung-yeul

LG Display, which once enjoyed global leading status in the LCD business, had struggled with shifting its business structure from money-losing LCDs to next-generation organic light-emitting diodes (OLED).

However, the company's efforts seem to be working, as the display-making affiliate of LG Group is set to see a turnaround in the third quarter, ending six straight quarterly operating losses, as its OLED business is thought to be on track.

Industry analysts said, Sunday, LG Display will likely to post an operating profit of more than 110 billion won ($96 million) for the July-September period because its production capacity of OLED displays is increasing and its plastic OLED business is also expected to see soaring demand as Apple is forecasted to use the product for its new iPhone, which will be unveiled this month.

They added expectation is increasing that the company will be able to enjoy bullish momentum next year as more OLED TVs will be sold.

According to industry trackers, LG Display's OLED panels in TV panel business in 2020 are forecasted to account for more than 50 percent for the first time. This comes seven years after the company entered the OLED TV business. The trackers added the rate will be increased to around 70 percent next year.

Market researcher Omdia said the OLED panels only accounted for 33 percent last year but the figure would be increased to 55 percent. Yuanta Securities forecasted LG Display would generate sales of about 3.5 trillion won with its OLED TV panels, which is higher than LCD TV panels which generate sales around 3.4 trillion won.

The gap between sales of OLED TVs and LCD TVs will be even larger in the following year as the local brokerage firm estimated LG Display will be able to generate sales of 5.2 trillion won in OLEDs while making 2.8 trillion won on LCD TVs.

After being hit by the industry's oversupply in conventional LCD panels as Chinese rivals flooded in, LG Display has revealed it would concentrate on producing high-priced OLED display panels and these efforts appear to be having effect.

In July, the company finally began mass-producing panels using its 8.5th-generation glass-cutting technology at its OLED manufacturing plant in Guangzhou, China. As the company has already secured 19 TV makers that use its OLED TV panels, industry analysts said the company will see increasing demand for its OLED panels.

To expand the OLED ecosystem, LG Display CEO Jeong Ho-young said the company will promote strategic cooperation with various players in the sector.

“We will try to increase the market penetration and penetration rate of OLED displays and continue to expand the use of OLED displays in new applications and new industries,” Jeong said during the company's annual technology forum LG Display 2020 Tech Forum, which was held online on Oct. 7.

“To achieve that goal, we will collaborate with our partners to develop a systematic OLED ecosystem,” the CEO said.