lg lcd display made in china
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The Korean display industry drove Korea’s exports, making Korea a display powerhouse in the world one exporter just 10 years ago. But it has been put into a position to completely lose its power as Korea’s national strategic industry due to a price war initiated by Chinese display makers and a complex global crisis.
LG Display and Samsung Display are struggling to find their ways out of the deterioration of their performance even after withdrawing from production of liquid crystal display (LCD) panels. The high-priced organic light emitting diode (OLED) panel sector regarded as a future growth engine is not growing fast due to the economic downturn. Even in the OLED panel sector, Chinese display makers are within striking distance of Korean display makers, experts say.
On Aug. 30, Display Supply Chain Consultants (DSCC), a market research company, predicted that LCD TV panel prices hit an all-time low in August and that an L-shaped recession will continue in the fourth quarter. According to DSCC, the average price of a 65-inch ultra-high-definition (UHD) panel in August was only US$109, a 62 percent drop from the highest price of US$288 recorded in July in 2021. The average price of a 75-inch UHD panel was only US$218, which was only about half of the highest price of US$410 in July last year. DSCC predicted that the average panel price in the third quarter will fall by 15.7 percent. As Chinese companies’ price war and the effect of stagnation in consumption overlapped, the more LCD panels display makers produce, the more loss they suffer.
As panel prices fell, manufacturers responded by lowering facility utilization rates. DSCC said that the LCD factory utilization rate descended from 87 percent in April to 83 percent in May, 73 percent in June, and 70 percent in July.
Now that the LCD panel business has become no longer lucrative, Korean display makers have shut down their LCD business or shrunk their sizes. In the LCD sector, China has outpaced Korea since 2018. China’s LCD market share reached 50.9 percent in 2021, while that of Korea dropped to 14.4 percent, lower than Taiwan’s 31.6 percent.
Samsung Display already announced its withdrawal from the LCD business in June. Only 10 years have passed since the company was spun off from Samsung Electronics in 2012. LG Display has decided to halt domestic LCD TV panel production until 2023 and reorganize its business structure centering on OLED panels. Its Chinese LCD production line will be gradually converted to produce LCD panels for IT or commercial products. TrendForce predicted that LG Display will stop operating its P7 Plant in the first quarter of next year.
Korean display makers’ waning LCD business led to a situation in which Korea even lost first place in the display industry. Korea with a display market share of 33.2 percent was already overtaken by China with 41.5 percent) in 2021 according to market researcher Omdia and the Korea Display Industry Association. Korea’s market share has never rebounded in for five years since 2017 amid the Korean government’s neglect. Seventeen years have passed since 2004 when Korea overtook Japan to rise to the top of the world in the LCD industry. Korea’s LCD exports amounted to more than US$30 billion in 2014, but fell to US$21.4 billion last year.
A bigger problem is that Korean display makers may lose its leadership in the OLED panel sector although it is still standing at the top spot. While Korea’s OLED market share fell from 98.1 percent in 2016 to 82.8 percent last year, that of China rose from 1.1 percent to 16.6 percent. Considering that the high-end TV market is highly likely to shrink for the time being due to a full-fledged global consumption contraction, some analysts say that the technology gap between Korea and China can be sharply narrowed through this looming TV market slump. According to industry sources, the Chinese government is now focusing on giving subsidies to the development of OLED panel technology rather LCD technology. On the other hand, in Korea, displays were also wiped out from national strategic technology industry items under the Restriction of Special Taxation Act which can receive tax benefits for R&D activities on displays.
It appears too soon to say that Samsung Display and LG Display, the nation’s top display makers, will exit from the less lucrative LCD market amid a cutthroat competition with Chinese rivals with cheaper pricing.
Until a few years ago, the two firms had hinted at retiring from the old-school LCD business to focus on more advanced technologies such as upgraded LCDs or OLEDs to widen the gap with Chinese runner-ups.
But experts here say there has been a sign of change in the attitudes more recently, pointing out that their full shutdown of LCD operations ultimately would hinge on elevating profitability of their high-end push.
In 2020 alone, Samsung Display posted a deficit of more than 1 trillion won ($841.5 million) in its LCD business. But it has no other option but to continue production to meet the demand from its parent Samsung Electronics, the world’s largest TV maker.
The firm last year sold its LCD production facility in China to its Chinese rival TCL China Star Optoelectronics Technology, a key supplier to Samsung TVs. But the LCD line in Suzhou, China recently cut its panel supply almost in half, with Samsung’s display unit highly likely to be tasked with filling the void.
“(Samsung Electronics) have few choices but to contract with Samsung Display to make up for its LCD TV set capacity,” said Yi Choong-hoon, chief analyst at UBI Research.
This put Samsung Display‘s full exit plan in disarray. After the sell-off of the Chinese facility, the firm is also scaling down its LCD plant in Asan, South Chungcheong Province, to convert part of the facilities to its quantum-dot OLED lines to supply to set makers including Japanese firm Sony.
LG Display’s LCD business -- with production lines in Paju, Gyeonggi Province and Guangzhou, China -- is poised to generate 2.5 trillion won in operating profit for 2021, up fourfold from the previous year, according to Kim Jung-hwan, an analyst at Korea Investment & Securities, on Thursday.
This comes in sharp contrast with OLED TV earnings estimate. According to Kim, LG Display‘s OLED TV operations will post 152 billion won in operating loss, as its fourth-quarter forecast to generate 62 billion won income was dwarfed by 214 billion won losses for the previous three quarters. Since inception, LG’s OLED panel business has been in the red due to heavy spending.
“A bigger penetration of OLED TVs to consumers is a prerequisitie for a conversion of (LG Display’s) existing LCD TV lines to OLED TV lines,” he said.
Analysts also said LG Display has already streamlined its LCD TV lines under a series of restructuring of LCD TV lines, including a conversion to lines for IT devices including mobile phones.
“(LG Display‘s) LCD TV fabs with low profit margin have completed a retreat in the first half of 2021,” said Kim Sun-woo of Meritz Securities. “LG is now capable of maintaining LCD capacity with a decent profit margin.”
This comes against the backdrop of industry projections that LCD TV panel prices continue to fall steadily over the course of the first quarter, and Chinese rivals are forecast to ramp up dominance in LCD market,
According to US-based market intelligence firm Display Supply Chain Consultants, Chinese firms’ LCD market share on a capacity basis are forecast to rise to 71 percent by 2025, from 53 percent in 2020, far outpacing Korea, Japan and Taiwan, as of June 2020.
Another estimate, released earlier this week, showed the price for LCD TV panels regardless of size -- ranging from 32- to 65-inch -- is projected to fall until March, giving up almost entire gains from July 2020 to July 2021 that is partly attributable to announced exits of Korean LCD panel makers.
LG Display this month started production at its 8.5th Generation OLED manufacturing facility in Guangzhou, China. When fully ramped, total capacity of the factory will be 90,000 substrates per month. The plant will produce 55, 65, and 77-inch high-resolution panels for televisions. In fact, LG’s goal is to make 10 million large size OLED panels per year by 2022, which means to more than double its current output.
The new 8.5G OLED panel plant is a nine-level building above the ground that occupies a 74,000 m² piece of land and provides 427,000 m² of floor space. Initial capacity of the manufacturing facility will be 60,000 2200×2500 mm substrates per month, which will be expanded to 90,000 sheets per month by 2021. The factory will be operated by LG Display High-Tech China, a joint venture between LG Display and Guangzhou Development District, in which the former holds a 70% stake (with ~$2,150 billion in capital).
Facing cut-throat competition from various makers of liquid crystal displays, LG Display recently set a strategic goal to significantly expand production of large OLED panels in a bid to serve more lucrative and growing market segments. LGD says that it sold 2.9 million huge OLED panels in 2018 and expects to sell 3.8 million large panels this year, which will turn this business to profitability. Citing market researchers, the manufacturer says that demand for OLED TVs and panels is growing and to that end, it makes a great sense to invest in OLED plants.
Right now, LG makes 70,000 8.5G OLED substrates at its plant near Paju, South Korea. The company is building a 10.5th Generation OLED plant near Paju that will produce 45,000 of 2940×3370 mm substrates per month when it is ready in 2022. Combined, LGD will manufacture 160,000 8.5G OLED substrates and 45,000 10.5G OLED sheets a month in 2022. The company hopes that its expanded manufacturing capacity will enable it to make 10 million of large OLED panels per year by 2022.
(Reuters) - South Korean panel maker LG Display Co Ltdwill halt domestic production of liquid-crystal display (LCD) TV panels by the end of this year, its chief executive said on Monday, due to dropping LCD prices and a global supply glut.FILE PHOTO: An LG Electronics" logo is pictured on a TV displayed at a shop in Seoul, South Korea, April 26, 2016. REUTERS/Kim Hong-Ji/File Photo
The suspension of domestic LCD TV production comes after the company last year chopped its spending, replaced its long-time CEO and started a voluntary redundancy program.
“We will be wrapping up our LCD TV production in South Korea by end of this year and focusing on our LCD TV production in China,” CEO Jeong Ho-young said at the annual CES trade show in Las Vegas.
In October, the South Korean Applesupplier said it planned to "downsize" two of its LCD TV panel production lines in South Korea and was looking into various options.
LCD TV businesses accounted for 32% of LG’s revenue in the July to September period, down from 41% the previous quarter due to fewer shipments from its LCD TV panel plants.
While terminating domestic LCD TV production, LG Display aims to shift its focus to organic light-emitting diode (OLED) technology. It expects the newer technology to account for 50% of revenue by 2021, up from about 30% in 2018.
LG"s cross-town rival Samsung Display, a unit of Samsung Electronics Co Ltd, said in October it had suspended one of its LCD production lines in South Korea.
SEOUL (Reuters) - Chinese flat screen makers, once dismissed as second-class players in the global LCD market, are drawing envious looks from big names such as LG Display Co Ltd and Samsung.An employee works inside a LCD factory in Wuhan, Hubei province, May 8, 2013. REUTERS/China Daily
While the Korean giants were busy developing next-generation organic light emitting diode (OLED) TVs, little-known Chinese companies have started selling a type of display that are sharper than the standard LCD and cheaper than OLED.
Until last year, the UHD market had been almost non-existent, with just 33,000 sets sold in the 200 million-unit LCD TV market. Since then, shipments have soared around 20-fold, thanks to China, data from research firm IHS shows.
Chinese consumers who want brighter and sharper images but can’t afford OLED screens made by LG and Samsung Display, a unit of Samsung Electronics Co Ltd, are turning to UHD.
But its slow introduction into the market and austere prices have thrown open a window of opportunity for UHD makers, in this case Chinese companies like BOE Technology Group Co Ltd and TCL Corp’s LCD unit CSOT.
“We assumed it’ll be too early for this type of display to take off, and thus didn’t think much of having diverse UHD product line-ups, especially in the low end. But I think we are not late just yet and we are working hard to lead the market here.”
By comparison, Japanese flat-screen pioneer Sharp Corp reported a razor-thin 0.5 percent margin. LG Display, the world’s No.1 LCD maker, posted a 5.6 percent margin.
Samsung Display, a unit of Samsung Electronics, had a margin of 13 percent, the biggest in the industry. But excluding its fledging OLED business, its LCD margin is between 3 and 7 percent, according to a Bernstein forecast.
“They’ve got also strong captive customers - Chinese TV manufacturers and a booming China market. It will take quite a while for Samsung and LG, which made a strategic mistake by ignoring the potential of UHD, to overtake them,” Nam said.
Jolted by the reality of a growing UHD market, Samsung Electronics unveiled a 110-inch UHD TV in January. Interestingly, the UHD displays were not made by Samsung Display, but were produced by Taiwan’s AU Optronics.
“Even with some expansion of the Chinese panel suppliers we do expect Samsung and LG Display to stay dominant and continue production in LCD,” said Sweta Dash, director at IHS.
While Samsung and LG Display are investing billions of dollars in OLED this year, the two giants are also broadening their product lineups to include more popular 50 to 60-inch UHD models.
BOE Technology is now planning to raise 46 billion yuan ($7.5 billion) in the biggest Chinese equity offering this year, to build panel production lines and increase its stake in its LCD venture BOE Display Technology.
LG Display (Korean: LG 디스플레이) is one of the world"s largest manufacturers and supplier of thin-film transistor liquid crystal display (TFT-LCD) panels, OLEDs and flexible displays. LG Display is headquartered in Seoul, South Korea, and currently operates nine fabrication facilities and seven back-end assembly facilities in Korea, China, Poland and Mexico.
LG Display was originally formed as a joint venture by the Korean electronics company LG Electronics and the Dutch company Philips in 1999 to manufacture active matrix liquid crystal displays (LCDs) and was formerly known as LG.Philips LCD, but Philips sold off all its shares in late 2008.joint venture, called LG.Philips Displays, dedicated to manufacturing cathode ray tubes, deflection yokes, and related materials such as glass and phosphors.
On 12 December 2008, LG.Philips LCD announced its plan to change its corporate name to LG Display upon receiving approval at the company"s annual general meeting of shareholders on 29 February. The company claimed the name change reflects the company"s business scope expansion and business model diversification, the change in corporate governance following the reduction of Philips" equity stake, and LG"s commitment to enhanced responsible management.
LG Display became an independent company in July 2004 when it was concurrently listed on the New York Stock Exchange (NYSE: LPL) and the South Korean Stock Exchange (KRX: 034220).
In December 2010, the EU fined LG Display €215 million for its part in an LCD price fixing scheme.Chimei Innolux, AU Optronics, Chunghwa Picture Tubes Ltd., and HannStar Display Corp.
This followed the 2008 case in the US, when LG Display Co., Chunghwa Picture Tubes and Sharp Corp., agreed to plead guilty and pay $585 million in criminal finesliquid crystal display panels.
LG Display would pay $400 million, the second-highest criminal fine that the US Justice Department antitrust division had ever imposed. Chunghwa would pay $65 million for conspiring with LG Display and other unnamed companies and Sharp would pay $120 million, according to the department.
LG managed to cut the manufacturing cost of its OLED TV panels by quite a significant margin with the help of its factory in China. Its cost-cutting efforts are said to affect the production of an even wider range of TVs in the future, which could possibly create a positive ripple effect for consumers. LG is known for many things, from its range of smart appliances to high-end OLED TVs and even its tech-infused face mask.
Aside from producing various innovative smartphone models over the years, the South Korean tech giant is also known as one of the biggest suppliers of LCD and OLED display panels. LG Display, a subsidiary of LG, has been operating for over 20 years now, supplying display panels for renowned tech companies such as Apple, ASUS, Dell, Philips, and Sony. With the arrival of LG"s rumored 97-inch TV reportedly just around the corner, it makes sense for LG to find means of ensuring the cost of its panels won"t surpass the retail price of its TVs.
It seems like LG"s already taking measures for just that, and it all starts with its latest LG Display factory which opened last year in Guangzhou, China. According to flatpanelshd, its Chinese factory was able to lower the cost of its 48-inch displays by up to 14%. This was achieved by minimizing its cost and expenses in terms of overhead, labor, depreciation, and sales management. While the results affected only certain displays, the Display Supply Chain Consultants, a group that specializes in display-based supply chains, believes the same will also apply to its 65-inch displays soon, as well as double LG"s display panel sales from 2020. In addition, LG"s Guangzhou factory is said to be capable of manufacturing various display panel sizes at reduced production costs.
LG might have folded in the smartphone game, but its impact in the broader consumer electronics spectrum is still significant. That said, many well-known brands like Sony and Panasonic still rely on LG for their smart TV displays, and LG"s cost-cutting measures should allow it to meet larger demands faster and more efficiently. This also helps hasten the mass production of its much larger 80 to 100-inch TVs in the process, possibly allowing them to hit shelves sooner than anticipated.
While this might not exactly guarantee that consumers will soon be getting bigger TV screens for cheaper prices, it could likely increase supplies for larger TV sets. The more supply of such bigger-screen TVs appearing on the market relative to its consumer demand, the better the likelihood of their prices becoming more affordable. Of course, consumers shouldn"t hold their breath much in terms of drastic price reductions any time soon, especially since LG is still very much capable of charging customers $100,000 for a TV.
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South Korea"s LG Display said Monday that it will change its investment priority to advanced displays called OLEDs as Chinese manufacturers quickly catch up with their South Korean rivals in the LCD market.
LG Display Co., a supplier to Apple Inc., said that over the next three years it plans to spend 10 trillion won ($8.4 billion) on future displays including OLED, flexible displays and high-end LCD screens. It did not give breakdown figures, saying the size for each type of display will hinge on market situations.
LG Display and LG Electronics are the lone manufacturers of OLED TVs, which are still more expensive and more difficult to produce than LCD TVs. LG Display"s OLED business has been losing money.
OLEDs, or organic light-emitting diodes, require no backlight and can be made into a flexible display. Rival Samsung Electronics uses OLEDs only for small-size devices such as smartphones, saying that big-size OLED TVs face challenges in prices and productions.
LG Display"s CEO said that while the Chinese firms will eventually catch up to South Korean makers in the LCD market, there is still an opportunity in the future displays.
On the back of massive investments, South Korean electronics companies surpassed Japanese companies to become the world"s largest supplier of flat display panels in the early 2000s. Those displays are used to produce televisions, computer screens and mobile devices.
Chinese display makers are expected to account for 27 percent of global LCD production in 2020, up from 16 percent this year, according to LG Display.
LG believes its giant investment will pay off as the OLED market poses a greater growth opportunity than the LCD market, where growth has stagnated. DisplaySearch, a market research firm, forecasts OLED shipments to jump about threefold to $28.3 billion in 2022 from $8.7 billion in 2014.
Chinese companies have gained a competitive edge in the large-screen display industry and the exit of South Korean counterparts such as Samsung Electronics and LG Display from the liquid crystal display market will bring opportunities for China"s panel makers despite the challenges posed by the COVID-19 pandemic.
Market research firm Sigmaintell said BOE Technology Group Co Ltd-a leading Chinese supplier of display products and solutions-became the world"s largest shipper of LCD TV panels for the first time in 2019.
The Beijing-based company shipped 53.3 million units of LCD panels in 2019, with production capacity increasing by more than 20 percent on a yearly basis.
The consultancy said the LCD TV panel production area of Chinese manufacturers will account for more than 50 percent of the global total this year, surpassing South Korean competitors who are accelerating the shutdown of large-sized LCD panel production capacity due to competition from Chinese manufacturers.
It estimated the production capacity of large-sized LCD panels will continue to increase in China over the next three years. In addition, global LCD TV panel shipments stood at 283 million pieces last year, a slight decrease of 0.2 percent year-on-year. Meanwhile, the shipment area was 160 million square meters, an increase of 6.3 percent year-on-year.
"Chinese companies have gained an upper hand in large-screen LCD displays. Samsung and LG"s decision to exit from the LCD sector means Chinese panel makers will take a dominant position in this field," said Li Dongsheng, founder and chairman of Chinese tech giant TCL Technology Group Corp.
Li said South Korean firms will focus on organic LED screens and quantum dot LED displays, while Chinese TV panel makers are catching up at a rapid pace.
The pandemic will accelerate reshuffling in the display industry as supply has surpassed demand in the past few years and competition has become very fierce, he added.
"The outbreak has caused a periodic drop in demand in the global display market and sped up the restructuring of the entire industry. Chinese enterprises are in a favorable position, and I believe that they will further enhance their competitiveness," Li said.
Data consultancy Digitimes Research said it comes as little surprise that Samsung has opted to withdraw from the LCD panel sector as its LCD business was losing money in every quarter of 2019 due to challenges from Chinese competitors.
"China"s semiconductor display industry has made large advances in the past decade, changing the display industry"s global competitive landscape. China has transformed into the world"s largest consumer market and manufacturing base for display terminals, with huge market potential," said BOE Vice-President Zhang Yu.
BOE said its Gen 10.5 TFTLCD production line achieved mass production in Hefei, Anhui province, in March 2018. The plant mainly produces high-definition LCD screens of 65 inches and above. With a total investment of 46 billion yuan ($6.5 billion), the company"s second Gen 10.5 TFT-LCD production line launched operations in Wuhan, Hubei province, in December.
The Gen 11 TFT-LCD and active-matrix OLED production line of Shenzhen China Star Optoelectronics Technology, a subsidiary of TCL, officially entered operations in November 2018, producing 43-inch, 65-inch and 75-inch LCD screens.
Bian said the OLED and QLED will be the next-generation flat-panel display technologies to be in the spotlight. LG Display is currently the world"s only supplier of large-screen OLED TV panels.
OLED is a relatively new technology and part of recent display innovation. It has a fast response rate, wide viewing angles, super high-contrast images and richer colors. It is much thinner and can be made flexible, compared with traditional LCD display panels.