2024-05-09 19:38:00
Angela Marina
Due to intense competition with Chinese liquid crystal (LCD) panel manufacturers, LG Display is refocusing on producing more technologically advanced and expensive OLED panels. LG Display is reportedly considering the possibility of selling its LCD manufacturing plant in the Chinese city of Guangzhou. This is its last LCD panel production plant: the company actually stopped producing LCD panels at its facilities in South Korea in 2022.
Image source: LG screen
The move is part of LG Display’s long-term strategy to focus exclusively on the more promising and profitable OLED display market. Additionally, taking drastic steps to completely abandon the company’s production of LCD panels LG screen in recent years it has been driven by increased price competition with cheap Chinese manufacturers.
It is worth noting that last year the company finally closed the LCD production lines at its Korean companies and is now regarding to sell the last large factory for their production in China. According to unofficial information, Chinese companies BOE Technology and TCL Technology are being considered as potential buyers.
LG Display’s decision to completely abandon the production of outdated LCD panels and switch to producing only modern OLED panels is due to a number of reasons. First, the OLED market is experiencing much higher growth rates than the LCD segment. In addition, OLED technology has a number of advantages over LCD: better image quality, lower power consumption, etc. This allows OLED display manufacturers to charge higher prices for their products and, therefore, earn higher profits.
Secondly, Korean companies LG Display and Samsung in principle maintain leading positions in the global OLED display market. It is predicted that by 2024 they will account for 74% of all OLED panel sales worldwide. And in the OLED TV segment, the share of LG and Samsung will be 96%. This means that Korean manufacturers have serious competitive advantages in the OLED sector.
Finally, the LCD screen sector has become less and less profitable in recent years due to strong competition from Chinese companies.
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