The South Korean tech giant LG came under the limelight as it announced its plans to invest as much as $1.75 billion in flexible OLED displays. The move comes in a bid to cater to the growing demand of OLED displays in the tech market.
As the demand for OLED display continues to surge at a rapid pace, an increasing number of hardware manufacturers are using OLED display in their devices, instead of Liquid Crystal Displays (LCD). LG that is considered as the biggest manufacturer of LCDs is focused on using OLED for television; however, it is still trailing behind Samsung Display — the largest manufacturer of OLED for smartphones.
Rumors have surfaced that LG plans to launch a foldable smartphone in 2017. The company’s investment in OLED display seems to be in line with its plans to launch a unique product. In a regulatory filing, the company disclosed that it is building a new production line for small and medium sized OLED displays in South Korea, to cater to the growing demand. “A paradigm shift to OLED represents both a challenge and an opportunity for the display industry,” said LG Display Chief Executive, Han Sang-beom, in a statement.
The announcement has emerged amid struggles at LG Display that recently announced an 84 billion Korean won net loss during the last quarter, compared to the 363 billion Korean won net profit generated during the comparable time period last year. The company also experienced a 13% fall in its sales.
Due to economic uncertainty across the globe, demand for electronic devices is shrinking; component makers, such as LG Display, Samsung Display, and Sharp Corp, have experienced a fall in their respective margins.
LG’s main client, Apple, announced yesterday that it sold 40.4 million iPhones during the third quarter, down almost 15% as compared to last year. This information further reaffirms the fact that the tech space is undergoing a change, and market players such as LG are faced with difficult challenges ahead.
Interestingly, Apple has been using LCD displays for its iPhone for quite some time now, and is unlikely to switch to OLED this year. However, industry pundits believe that the iPhone maker could use OLED displays for its iPhone next year. “Apple’s upcoming adoption of OLED displays will be a milestone for OLED in the display industry,” said a senior director at IHS Markit, David Hsieh.
LG’s latest move speaks of its future direction and long term plans. Its earnings results for the coming quarters will reflect if the move to switch to OLED display sat well with customers.