Large-scale Investment After 3 Years in Response to China’s Pursuit
LG Display is investing the funds acquired from selling its LCD (liquid crystal display) factory to a Chinese company into its OLED (organic light-emitting diode) business. LG Display announced on the 17th that it would invest 1.26 trillion won in new OLED technology facilities, with approximately 700 billion won allocated for the production facility in Paju, Gyeonggi Province, South Korea. The remaining amount will be invested in an assembly facility in Vietnam. This marks LG Display’s first major investment since 2021.
LG Display sold its Guangzhou, China plant to CSOT (China Star Optoelectronics Technology), a subsidiary of Chinese company TCL, last year, marking its exit from the large LCD market. More than half of the 2.2466 trillion won obtained from the sale was invested in new OLED technology equipment, as the company strengthens its next-generation OLED competitiveness.
The Paju production facility, where about 700 billion won will be invested, spans approximately 34,600 pyong, the size of about 150 soccer fields, and produces large, medium, and small OLED products. With this investment, the facility is expected to convert existing production lines to new OLED lines incorporating low-power, high-definition technology. The investment period extends until June 30, 2027, lasting about two years. LG Display expects indirect investment effects through collaboration with small and medium-sized partner companies, in addition to direct equipment investment.
This large-scale investment is seen as LG Display’s move to pivot its business focus from LCD to OLED. OLEDs are self-emitting displays superior in image quality, thickness, and power consumption compared to LCDs. They require higher technology and are considered high-value-added products. LG Display has been investing in the premium OLED market since 2013, undertaking seven investment rounds and deploying 3.3 trillion won into small and medium-sized OLED facilities by August 2021. OLED now accounts for a record 55% of LG Display’s total sales.
The investment is also expected to bolster competitiveness in small and medium-sized OLEDs, given their high and growing market demand in smartphones, tablets, laptops, and automotive displays. New production facilities are anticipated to produce OLED products with better image quality and power efficiency. LG Display stated that its strategic focus is on developing premium products to outpace competitors.
This shift to OLED investment comes as part of responding to China’s pursuit in the display industry. China has already dominated the LCD market, which Korea once led, with over 60% global market share, while Korea holds only about 10%. Both LG Display and Samsung Display have ceased production of large LCD panels due to China’s low-price strategy, leaving no Korean firms producing TV LCD panels, only a few monitor-related products.
Recently, China has also aggressively pursued the OLED market, requiring advanced technology. Chinese companies like BOE and Visionox have started large-scale investments to capture the OLED market. According to market research firm Omdia, Korea’s global OLED market share dropped from 73% in 2023 to 66.4% last year, while China’s rose from 25.7% to 32.2% over the same period.
Korean display companies are actively responding to Chinese technological infringement. LG Display filed a patent infringement lawsuit against Chinese display company Tianma in the U.S. District Court for the Eastern District of Texas on the 13th. The complaint cites seven cases of LCD and OLED patent infringement by Tianma. An industry expert noted, “Korean companies are facing a challenging field due to technology theft attempts from Chinese display companies and substantial support from the Chinese government,” adding, “It is crucial to leverage timely investments to outpace Chinese companies through technological superiority.”