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LG Display to concentrate on UHD OLED production but cuts overall production output this year

This change in production is believed to be largely driven by increasing stock of FHD OLED TV, and low yields of UHD OLED-TV panels

22 Apr 2015 | Editor

According to a recent report on the ETNews website although LG Display is currently focusing their efforts on mass-production of OLED-TV panel production all is not going well as the company has had to make drastic adjustments to this year's production plans.

This change in production is believed to be largely driven by increasing stock of FHD OLED TV, and low yields of UHD OLED-TV panels.

According to multiple industry officials at a recent company presentation LG Display has lowered OLED TV panel production output. Although, last year LG Display had originally planned to produce 742,000 OLED TV panels in 2015, but this was then lowered to 650,000 units and then to 500,000 units at the beginning of the 2015, and the company now wants to lower it further to below 500,000 for the full year.

LG Display - Large area UHD OLED TV

Figure: LG Display - Large area UHD OLED TV

The news report suggest that there are several reasons behind LG Display decision to lower production output:

  • They is low market demand for the FHD OLED panel that had raised yields to a high level, and the increase in the charge of stock due to this
  • It has become especially hard for them to put up a differentiated value as they have lost in the price competition with the UHD LCD TV adopting the Quantum Dot(QD) film
  • In the premium TV market, QD(Quantum Dot)TV and UHD OLED TV form competitive composition
  • UHD OLED TV has a high price but overwhelms QDTV with better performance
  • The higher the resolution, the harder it becomes for OLED panel to achieve a stable yield

LG Display has been building the Gen 8 (2,200 mm × 2,500 mm) WRGB M2 line since 2012. This is in addition to the existing M1 line, for the expansion of the OLED business. The M2 line’s panel production goal is 26,000 sheets per month, and started operating a 8,000 sheet-scale portion in advance from last year.

LG Display had announced their plans to produce a range of large-area UHD OLED panels including 55-inch, 65-inch and 77-inch displays at the M2 line. However, the company has decided to concentrate on the 55-inch UHD OLED TV panel production because 65-inch and 77-inch displays TVs are too expensive.

An official who is familiar with the inside affairs of LG Display said, "FHD OLED yields are as high as that of the LCD panel, but it is troubling how UHD OLED yields fall short of our expectations. The overall production plan has fallen as the production proportion of UHD OLED, which has a relatively low yield, was expanded. If LG Display secures the UHD OLED TV panel yield at a 70% ~ 80% rate this year, we are planning on increasing investment nearly double the amount of current output next year."
An official who is familiar with the inside affairs of LG Display said, "FHD OLED yields are as high as that of the LCD panel, but it is troubling how UHD OLED yields fall short of our expectations. The overall production plan has fallen as the production proportion of UHD OLED, which has a relatively low yield, was expanded. If LG Display secures the UHD OLED TV panel yield at a 70% ~ 80% rate this year, we are planning on increasing investment nearly double the amount of current output next year."
An industry official said, "If LG Display’s UHD OLED TV becomes firmly rooted in the market this year, other competing companies must also react to OLED TV or quickly start 8K UHD LCD panel production. We are at an important crossroads this year, where the mid-and-long-term winner will be determined."

www.lgdisplay.com    www.etnews.com   

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