LG Display wants to start mass production OLED panels in China this month

LG Display is reportedly set to start producing OLED panels this month at its key factory in Guangzhou, China. The restart of mass production has been postponed several times. Panels from this factory end up in OLED TVs for consumers.

The yield rate required for the start of production has already been achieved, The Elec writes, based on sources that are familiar with the subject. Based on that, LG Display is planning to start producing large OLED panels in this factory this month. In principle, sixty thousand plates can be made in the factory every month. That is almost doubling the capacity, but the question is whether the company will do this.

The manufacturer is said to be mulling over the problem of profitability when the factory resumes mass production. Once that is the case, LG Display would immediately face depreciation charges and the losses could mount further. These concerns stem from the expectation that there will be less demand for large OLED panels, which would be associated with the Covid-19 pandemic. In April, LG Display’s CFO Suh Dong-hee said the pandemic will lead to a 10 percent drop in demand.

That reduced demand is said to have already occurred during the second quarter of this year, prompting LG to curtail OLED panel production in South Korea. According to the sources, this was partly to blame for the delay in the start of mass production at the factory in Guangzhou. Also, some suppliers have not yet sent their technicians to the Guangzhou factory, but that will probably change once LG Display decides to increase production numbers.

The factory in Guangzhou was already opened last year, but production was subsequently halted again. Initially this was due to low yields and then to the corona pandemic. Production has already started, but mass production should start later this month. The panels for, among others, the 48″ OLED TVs that have become available now come from the Guangzhou factory.