South Korea’s LG Display Co. pledged to invest total 15 trillion won ($13.5 billion) in organic light-emitting diode (OLED) display production by 2020 in a bid to meet burgeoning demand for OLED screens from not only the TV sector but also mobile device manufacturers.

The company said on Tuesday that its board approved its plan to invest 7.8 trillion won in local OLED production facilities located in Paju in Gyeonggi Province. It will spend 2.8 trillion won to add 10.5-generation OLED lines for large TV panels and another 5 trillion won to build 6-generation plastic OLED (POLED) lines for small- and mid-sized screens. Both lines will be added to the company’s P10 fab currently under construction in Paju, which is expected to emerge as the company’s OLED production hub for televisions and mobile devices.

Including the new 7.8 trillion won investment, the company aims to spend total 15 trillion won to bolster its OLED production by 2020, the company said in a statement. The arch rival to the world’s leading display maker Samsung Display Co. has made such a bold investment decision after its premium, wallpaper-thin OLED TV displays and crystal sound OLED products have received positive reviews since their launches this year, it said.

Demand for OLED TV screens is also growing high as TV makers across the world are witnessing the success of upmarket OLED TVs released by Korean tech giants Samsung Electronics Co. and LG Electronics Inc. To cope with the growing global OLED TV demand, LG Display’s board also approved a plan to set up a joint entity in Guangzhou, China to produce 8.5-generation OLED displays. The Korean display maker will hold a 70 percent stake in the joint entity with 2.6 trillion won in capital.

The company also offered a rosy outlook on non-TV OLED panel demand. The OLED signage display market has been expanding steadily while demand for OLED screens in the mobile and auto sectors has been growing rapidly. In particular, as more smartphone makers are opting for flexible OLED displays, the company pinned high hopes on its POLED panels. In a statement, the company forecast that the POLED smartphone market to surge from 120 million units in 2017 to 370 million units in 2020, while the flexible OLED market to grow at a compound average growth rate (CAGR) of 63.2 percent to 389 million units in 2020.

The company was upbeat about its OLED panel business after it reported on Tuesday solid earnings for the second quarter ended June thanks to steady growth in demand for auto and commercial products and extra-large ultra high definition (UHD) television and high resolution information technology displays.

LG Display said it raised 804.3 billion won in operating income on sales of 6.6 trillion won on a consolidated basis in the second quarter. Although sales decreased 6 percent from 7.06 trillion won of the previous quarter due to fewer shipments of small- and mid-size panels on seasonal factors and stronger Korean won against the U.S. dollar, the figure increased 13 percent from 5.86 trillion won in the same period last year. Compared to the previous quarter, operating income also retreated 22 percent in the April-June period, but it surged a whopping 1,712 percent on year.

The company’s net income in the quarter also swung to a profit of 736.7 billion won from a net loss of 84 billion won in the same period last year.

By sector, TV panel sales accounted for 46 percent of its total sales while mobile device panels 22 percent, monitor screens 17 percent, and notebook and tablet panels 15 percent.

LG Display shares closed down 1.4 percent, or 450 won, at 32,800 won on Tuesday.

By Lee Dong-in

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