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Korean panel makers’ transformation from LCD to OLED meets virus hurdle

LG Display, Samsung Display start to downsize LCD business, expansion of OLED hampered by coronavirus spread

LG Display's OLED panel (Yonhap)
LG Display's OLED panel (Yonhap)

Market figures on Wednesday showed Korean display makers are accelerating their plans to shift their focus from the money-losing liquid crystal display business to the growing organic light-emitting diode industry.

But there are worries about those plans being carried out at a slower pace than initially expected due to the global outbreak of the novel coronavirus.

According to data from IHS Markit, LG Display and Samsung Display came in fourth and fifth place in terms of market share for large-sized LCD panels in the final quarter of last year.

LG’s share in the global LCD market shrank from 15.5 percent in the third quarter to 14.3 percent by the end of 2019, falling from the market’s second position to fourth, losing pace to Chinese competitors BOE and CSOT.

Samsung Display marked a 9 percent drop during the same period.

Both LG and Samsung announced last year plans to downsize the LCD businesses due to fiercer competition over prices against Chinese players, and to focus more of their financial investments and human resources on premium OLED panels. In more technical detail, Samsung is to focus on small and midsized OLEDs and large-size quantum dot displays.

However, those plans seem to be facing inevitable delays due to the COVID-19 outbreak.

The world’s largest OLED provider, LG Display’s schedule to start operating its newest 8.5th generation OLED fab in Guangzhou, China, within the first quarter of the year appears inevitable to be postponed again to the second quarter over COVID-19 risks.

“LG Display’s large-size OLED panel fab operation in Guangzhou is delayed due to the COVID-19,” said Kim So-won, an analyst at Kiwoom Securities. “Its operation is projected to be possible in the second quarter, and this would affect the company’s panel sales for TVs to fall during the first quarter.”

“The company is aiming to finish all of the preparations needed for mass production of the Guangzhou plant by March,” an LG Display official said. “But whether this schedule would be affected by the COVID-19 needs to be observed.”

At the earliest, some market analysts assume the Guangzhou fab could start its operation in April.

Upon full operation, the new LG fab will be capable of churning out 90,000 OLED panels for TVs per month. Domestically in Paju, Gyeonggi Province, the company produces 70,000 a month.

LG’s OLED fabs in Korea are also exposed to greater risks of slowing production amid the fast spread of COVID-19 that has already started to affect some employees of large manufacturers here.

From Saturday to Monday, the company had to shut down its OLED module plant in Gumi, North Gyeongsang Province, as a bank official working at the firm’s Gumi campus was confirmed to be infected with the virus.

Samsung Display hasn‘t yet reported any COVID-19 infection cases.

All of the Samsung OLED lines based in Korea are on their normal tracks as of Wednesday, so far seeing no difficulties in the procurement of materials and manufacturing processes.

However, the Samsung affiliate is also watching carefully over the ripple effect of the virus spread in the longer term.

“Concerns are already mounting about slowing demand (for OLED displays) throughout the year,” a Samsung official said.

By Song Su-hyun(song@heraldcorp.com)
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