LG Dipslay plans to invest 15 trillion won by 2020

LG Dipslay plans to invest 15 trillion won by 2020. July. 26, 2017 07:22. by Jae-Hee Kim jetti@donga.com.

LG Display plans to invest 15 trillion won (13.43 billion dollars) by 2020 on large OLED and smaller plastic OLED, or POLED, in an aim to expand business portfolio and cater to the increasing adoption of OLED technology. LG had hugely depended on LCD panels so far.

LG Display said Tuesday that its board of directors voted in favor for a 7.8 trillion won (7 billion dollars) investment project including 2.8 trillion won (2.5 billion dollars) for the 10.5 generation OLED and 5 trillion won (4.47 billion dollars) in smaller POLED. A total of 5 trillion won (4.47 billion dollars) will be invested in large OLED including P10 and E4-2 plants currently being built in Paju, Gyeonggi Province. As for smaller POLED, 5 trillion won (4.47 billion dollars) will be invested in E5 and E6 plants combined with new investments for a total of 10 trillion won (8.95 billion dollars).

"We have made a significant decision to simultaneously invest in TVs and POLED, as we are betting high hopes in OLED," LG Display Vice Chairman Han Sang-bum said. "Our new investment will contribute to creating more jobs and fostering display's upstream and downstream industries."

LG Display released Tuesday that its second quarter revenue and operating profit recorded 6.63 trillion won (5.92 billion dollars) and 804.3 billion won (700 million dollars), respectively. Operating profit surged 1,712 percent year-on-year helped by increased sales of UHD TVs and high definition IT products. It's operating profit was the biggest in terms of the year's first half.

How LG Display performs in the new field will determine the future of the company. The 10.5 generation OLED to be produced in P10 plant will be the first in the world. Industry observers say that also in smaller POLED market, LG Display lags behind Samsung Display.

"LG Display trails close Samsung in technological capability of smaller OLED, and therefore will have competitive edge in the global market," said Kim Dong-won, corporate analysis director at KG Securities' research center. "Its future earnings will depend on how fast LG Display advances yields based on know-hows earned through large OLED.