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"We are currently looking into expanding our P-OLED facilities," LG Display's Senior Vice President and CFO Suh Dong-hee said in a conference call that unveiled the company's second quarter earnings.
LG Display is focusing on using P-OLEDs for medium-and small-sized display panels because the panels are lighter and more durable than LCD panels. The display maker began mass producing P-OLEDs for smartphones last year and has been seeking to enhance its production system this year.
But the core implication behind its P-OLED pitch is that such displays are customized for electric vehicles (EVs). LG Display is collaborating with LG Energy Solution (LGES) and LG Electronics to increase the sales of its P-OLED panels, as LGES is the top global EV battery manufacturer, supplying products to the world's top carmakers.
Apple is seeking to incorporate OLED panels into its next iPad model. The Korea Times reported that Apple placed orders with LG Display for 50 million OLED sheets. LG Display is taking a two-track strategy for OLED panels, strengthening its medium- and small-sized panels, while maintaining the competitiveness of its large-sized OLED panels for TVs. LG Display is currently the only display maker globally that is able to mass-produce large-size OLED panels for TVs.
During the call, the company said that its large-sized OLED business has attained a stable position in the market.
"We have secured a stable positioning in the premium TV market, through improving our internal capabilities such as our production yield and diversifying our production lineups and sizes," Suh said.
LG aims to sell 8 million OLED TV panels this year. OLED TV panel shipments reached 3.5 million units in the first half of this year, which was equivalent to 80 percent of its total shipments in 2020.
The expansion of LG's OLED fab production capability in southeastern China's industrial city of Guangzhou will enable the production of 90,000 panels a month, up from 60,000 units per month.
"The large-sized OLED business is set to record a surplus in the latter half of this year, and we will make this a business that can generate a one-digit operating profit margin from next year, as well as a two-digit operating profit margin in the mid- to long-term," Suh told investors.
In the meantime, the company said that it won't completely exit the liquid crystal display (LCD) display business, as it has switched a large part of its production lines for TV LCD panels to lines producing LCD panels for IT devices. The LG affiliate said that it would operate its LCD fabrication plants in Paju, Gyeonggi Province, and Guangzhou, China, on a flexible basis to deal with the fall in LCD prices.
The percentage of sales of LCD panels for TVs currently takes up a little over 15 percent of the total, Suh said.
LG Display's sales came to 6.96 trillion won in the second quarter, up 31.3 percent year-on-year. It swung to an operating profit of 701.06 billion won, from an operating loss of 517.02 billion won in the same quarter of 2020. This time is the first since the second quarter of 2017 that LG Display's operating profit exceeded 700 billion won. The display maker attributed its performance to favorable LCD market conditions and the normalization of its OLED business.
