LG Backs Small Displays -- WSJ

By Eun-Young Jeong Features Dow Jones Newswires

Company will invest $7 billion for OLED production, in move to take on Samsung

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This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (July 26, 2017).

SEOUL -- LG Display Co. said it would invest an additional 7.8 trillion won ($7 billion) to churn out more smaller-size organic light-emitting-diode display panels used largely in premium smartphones, in a bid to challenge Samsung Display's dominance in the market.

Seoul-based LG Display has already said it would invest $6.5 billion in OLED production at its two factories in South Korea.

The global OLED market is expected to reach $25.2 billion this year, according to research firm IHS Markit, up 63% from last year.

Most of that growth is concentrated in smaller-size OLED panels, a sector dominated by Samsung Electronics Co.'s display-making affiliate, Samsung Display, which holds 97.1% market share by revenue.

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While LG Display holds a monopoly in the market for large-size OLED panels used in televisions, the company has stuck to older liquid-crystal display technology for smaller devices such as smartphones.

The bulk of smartphones use LCD displays, but premium smartphones are switching to OLED, including Apple Inc., which will use OLED screens for its coming iPhone 8. That shift has pushed LG Display to jump into the fray for smaller-size OLEDs.

OLED displays are thinner and more flexible, allowing phone makers to sell devices that are curved and sleeker in appearance.

Advocates of the technology say OLED also offers better color contrast and energy efficiency.

LG Display said Tuesday that its new OLED investment would be divided between large- and smaller-size OLED displays at its factory in Paju, near South Korea's border with North Korea.

About two-thirds of the investment, or $4.5 billion, will go into the production of smaller-size OLEDs, while the remainder will be invested in large-size OLEDs.

In addition to its investment in its home country, LG Display said it would start producing large-size OLEDs at its facility in Guangzhou, China, a plant previously used solely to make LCDs for televisions. The company didn't confirm the size of its investment in Guangzhou.

Tuesday's announcement came after the company said it earned $720.5 million in operating profit for the three months ended June 30, a 22% decline from the previous quarter.

The company earned $5.9 billion in revenue for the same period, a 6.1% slip from the previous three months.

Write to Eun-Young Jeong at Eun-Young.Jeong@wsj.com

(END) Dow Jones Newswires

July 26, 2017 02:47 ET (06:47 GMT)