LG Display announced Monday it will be channeling future resources to the development of OLED TVs to stay ahead of Chinese competitors that are catching up rapidly in the LCD sector, reported Associated Press.
The Apple supplier said it plans to spend US $8.4 billion on future display technologies including OLED over the next three years. Investments in OLED are aimed to making flexible displays and high-end LCD screens. LG Display did not give breakdown figures, only saying the size for each display will depend on market situations.
Despite being the only OLED TV manufacturer left in the industry, and bleeding heavily in its OLED business, LG Display insist on investing OLED TV technology.
OLED technology faces challenges including low yield rates, and high production costs. However, the merits of using OLED panels is it requires no additional backlight, and its flexible properties.
LG has chosen OLED technology to give it a competitive edge over Chinese companies. According to LG Display CEO Han Sangbeom Chinese firms are catching up with South Korean makers in the LCD market, but there is still a gap in OLED.
Supported financially with massive investments, South Korean electronics companies overtook Japanese companies to become the world’s largest supplier of flat panels in early 2000s. The displays were used to make televisions, computer screens and mobile devices.
Yet, government support has helped Chinese companies narrow the gap with South Korean companies’ leading position.
By 2020, Chinese display manufacturers are projected to amount to 27% of global LCD production, up from 16% in 2015, according to LG Display.
LG is optimistic its investment will pay off, since the OLED market has more growth potential than the LCD market, where growth has stagnated. DisplaySearch estimates the OLED market will jump threefold to $28.3 billion in 2022 from $8.7 billion in 2014.
Han estimates the OLED business will become profitable within the next two years.
