LG Display is investing over $600 million to create a new production line to mass produce thinner and energy efficient displays for TVs in order to effectively compete against Samsung for the OLED market. The company plans to focus on building OLED panels at an existing plant in Paju, a city that is north of Seoul, South Korea. LG is going to be investing 706 billion won (around $656.7 million U.S.) until June 30 next year to install a production line and begin mass production.
Even though LG is going to be mass producing TVs, analysts are expecting that OLED TVs will not be contributing to the company’s bottom-line because of the difficulties in building them and because of the low production yields. LG will need to see a major jump in their yield by 80% hopefully by next year. LG’s OLED panels are expected to process 26,000 motherglass sheets per month that can be big enough to build 55-inch screens per sheet.
The OLED market has been around for a long time, but many companies have not been successful at penetrating the market. For example, Sony Corporation pioneered OLED TVs, but they have not been able to commercialize their OLED products. LG Electronics has a 38% stake in LG Display and they beat Samsung at introducing a 55-inch OLED TV in January.