SEOUL (Reuters) - South Korea’s LG Display Co Ltd said on Monday it would focus investment on organic light-emitting diode (OLED) displays, betting on the next-generation technology to steer it clear of price wars and ahead of the competition.
Through 2018, LG Display plans to put at least 10 trillion won ($8.47 billion) primarily into OLED displays for large products such as TVs, and flexible screens for smartphones and wearables. It will seek to expand OLED applications to signage and automobiles, and allocate some spending to premium liquid crystal display (LCD) products, the firm said in a statement.
LG Display and sister firm LG Electronics Inc have been the biggest proponents of OLED, which boasts improved color rendition and power consumption. The world’s top LCD maker hopes early investment in OLED will help it dominate when the technology becomes mainstream.
LG Display shares have fallen 34 percent this year, touching levels not seen since 2012 as investors see a future comprising sluggish LCD growth and profit-squeezing price wars with Chinese rivals. OLED, however, offers a market worth $28.3 billion by 2022 from $8.7 billion in 2014, said researcher DisplaySearch.
OLED is being increasingly adopted for premium smartphones and smartwatches, such as models from Samsung Electronics Co Ltd and Apple Inc. But prices of goods sporting large, high profit margin OLED screens such as TVs are still far higher than comparable LCD products.
A 55-inch OLED ultra-high definition curved TV made by LG Electronics was on sale for $4,999 on Amazon.com Inc’s U.S. shopping site, marked down from $5,499.99. A comparable LCD set made by Samsung was priced $2,497.99, down from $3,999.99.
Samsung, the world’s biggest TV maker, has said OLED is still too expensive to produce for TVs.
As the two LG companies are the only major players pushing the technology for TVs, analysts and investors are skeptical whether they can by themselves create the economies of scale necessary to bring down prices enough for mass market adoption.
Reporting by Se Young Lee; Editing by Tony Munroe and Christopher Cushing