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>> LGD bet OLED panel for high-end market 26th,Apr,2018
On the banks of the Han River in the west of Seoul, the Magu Industrial Park has changed from an early farmland to a high-tech research center. The new technology park of LG Group will be located here. The new campus will cost 4 trillion won (about US$3.74 billion), and will focus on the core R&D team of the main company of LG Group to build an open innovation system.
April 20, LG Science and Technology Park officially opened to the outside world. LG Science and Technology Park has also become the largest R&D center in South Korea. Behind the signage of “LG Sciencepark” in the park, LG Display, LG Electronics, LG Chemical and other subsidiaries all have independent R&D buildings.
Among them, LG Display is currently the world's largest TV panel manufacturer. During the visit, 21st Century Business Herald reporter learned that researchers from LG Display's plant in Paju will all be transferred to the new campus, and the first three layers of the LG Display's R&D building. For the laboratory, from the fourth floor, it is a variety of research rooms, focusing on the development of LCD and OLED display technologies.
The Paju, which is located one hour from Seoul by the new park, is the panel base of LG Display. The road at the entrance of the park is called the LG Avenue. Today, LG Display’s P10 plant is starting construction and planning to build a large-scale production line for the 10.5 generation. On April 19th, Li Shangxun, vice president of marketing and marketing of LG Display Television Division, told the 21st Century Business Herald reporter: “The large-size production line is used to produce LCD or OLED, and will be adjusted flexibly according to market demand. ."
In addition to the domestic parks in Korea, LG Display signed a contract for the 8.5-generation OLED production line in Guangzhou last year. After several discussions about the approval of the Korean government, it is still waiting for review by the relevant Chinese authorities. This is an important issue for LG Display to expand its OLED production capacity. After betting on OLEDs, LG Display's goal is that by 2020, OLED accounts for 40% of LG Display's overall sales.
Grab the high-end market
From the LG Display's products, television panels accounted for half of the country. From the financial report data, TV panels accounted for 42.2% in 2017, mobile application panels accounted for 25.4%, desktop monitor panels accounted for 15.8%, tablet computers and notebook computers were 8.5% and 8.1% respectively.
In the TV panel, LG Display is strategically raising OLEDs. In 2013, LG Display began mass production of OLED TV panels. It has been nearly 6 years since. On April 18, Director of the LG Display Institute Yin Yirong said in an interview with a reporter from the 21st Century Business Herald: “The yield of OLED panels has now reached the golden yield, which is between 80% and 90%. The improvement of production experience has allowed OLEDs to achieve a golden yield much shorter than LCDs. OLED has used gold for 3 years to achieve a golden yield, and LCDs are six or seven years old.”
At the showroom of the Paju Plant at LG Display, the reporter saw the iconic screen spontaneous OLED TV, wallpaper-like wallpaper series OLED TV, 8K OLED TV, cylindrical OLED curl screen, and plastic OLED mobile phone screen. With the promotion of LG Display, sales of OLED TVs have increased rapidly in recent years.
According to data previously released by AVC, the sales volume of OLED TVs in the Chinese market in 2017 was 120,000 units, a 2X increase compared to 2016, and the growth rate in 2018 will probably reach 100%. Li Shangxun introduced: "In 2018, LG Display faced a global sales target of 2.8 million units, reaching 10 million supply targets by 2021, and the entire TV market will be approximately 220 to 230 million units. Instead of replacing LCD, we pay more attention to the changes that OLED can bring in the high-end market.In fact, the demand that our customers have given us has far exceeded the current production capacity.Korean KB Securities has also said that the current OLED supply has been in short supply, The demand gap reached 30%."
It can be seen that the proportion of OLED TVs in global television is still very small, and sales breakthroughs are mainly in the high-end market. According to the IHS data, in 2017, in the high-end TV market of more than US$2,500, OLED TVs accounted for 51.3% of the world's total. In 2016, this number was 35%.
In the saturated TV industry, the high-end market has also become a new direction targeted by many manufacturers. QLEDs, OLEDs, and Micro LEDs all have their own camps. As of the end of 2017, OLED's allies include 13 manufacturers including Sony, Panasonic, Philips, Skyworth, Changhong, and Konka. According to Li Shangxun, there will be a Chinese manufacturer and Japanese manufacturer joining the OLED camp this year. According to industry sources, the new members are likely to be the two major brands of Hisense and Toshiba.
Due to the huge initial investment, LG Display's OLED TV has only begun to profit slowly. Li Shangxun told reporters: “LG Display has been continuing to invest in OLED TVs in order to achieve deficit conversions. With EBITDA as the standard, the second half of last year has reached a trend of turning losses into losses. According to EBIT, it is expected that this year will achieve a deficit. Ying."
Strategic Transformation
In the 8.5-generation LCD production line in the Paju Plant, large-scale mechanical equipment is automatically operated in an unmanned workshop. Under the yellow light, the robot arm and the exposure machine are performing TFT-level processes in an orderly manner. During the visit on April 18th, an insider of LG Display told the 21st Century Business Herald reporter: “On our LCD production line, 80% of our equipment has been domesticated.”
The mature workshop also records the moment of prosperity of Korean companies in the LCD industry. TFT-LCD technology used in LCD panels has dominated Korea for a long time. LCD technology was first invented by U.S. companies, but Japanese companies only used liquid crystal screens, such as watches, and Sharp became the father of LCD TVs. Subsequently, after the Korean companies took control of the cyclical fluctuations of the panel, they invested large-scale and welcomed the full-scale outbreak of TV, computer and mobile phone applications. Today, China's BOE and Huaxing Optoelectronics companies are rising, especially with BOE's LCD panel share in hot pursuit of LG Display.
“In the second recession of the LCD industry in 1995-1996, Korean companies entered the TFT-LCD industry. Korean companies repeated their success in the semiconductor memory (DRAM) industry in the following years.” In the book “Change”, the author, Lu Feng, wrote, “In the fourth liquid crystal recession, South Korea’s Hutchison continued to invest in counter-cyclical investments and took the lead in establishing the 5th-generation line to suppress Taiwan’s competitors.”
Taking LG as an example, the company started developing LCD monitors from 1987. At that time, LG was still Goldstar, and later Venus Corporation developed LG Electronics. LG's loss on the LCD panel lasted for 8 years before it was rewarded for its intensive investment in capital and technology.
Until 2011, LCD panel makers in China, Japan, and South Korea faced fiercer competition and the industry was at the bottom of a new cycle. It is also the moment that LG and Samsung propose OLED slogans for strategic shifts. On the one hand, LCD technology has matured, and panel companies in China have been catching up with large-scale production of new-size production lines in advance. On the other hand, Korean manufacturers also hope to break new markets through differentiated strategies.
In the OLED market, Samsung's expertise lies in LTPS (Low-Temperature Polysilicon) and TFT-controlled OLED technologies due to different technical routes. It is suitable for small-size applications; LG Display does homework on oxide semiconductors and conducts large-scale research.
Yin Xiaorong analyzed with reporters: “We discovered a lot of problems in the thousands of experiments, the most important thing is to see if we can deal with speckles and spots, which is also the key to improving OLED technology and achieving mass production. In addition, the production method There are also challenges. Many manufacturers make small OLEDs, but it is difficult to go from small-size OLEDs to large-size spans."
In the small OLED market, Samsung now holds more than 90% of the market share. In this regard, Yin Yirong frankly stated: “We started late in small and medium sized OLEDs because of the customer’s structure, but the main problem is how to achieve catch-up in the shortest time. We use it with our friends on mobile devices. The technology is almost the same, the key is how to achieve more stable production and higher yields."
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