South Korea’s LG Display Co. will invest around $1.7 billion to ramp up yield of small and mid-sized organic light-emitting diode (OLED) panels to meet growing demand for plastic OLED as Apple and Chinese smartphone makers are mulling to opt flexible display for their premium phones from latter 2017.

LG Display announced on Wednesday that it will spend 1.99 trillion won to build a production line to manufacture sixth generation plastic OLED panels (1500㎜×1850㎜) with a monthly output capacity of 15,000 sheets at its P9 plant in Paju, north of Seoul.

The decision came after it had invested 450 billion won to set up a plastic OLED production plant in Gumi, North Gyeongsang Province where its other panel lines are already located.

Rollable and bendable OLED panels are dubbed to be next-generation displays for various applications. Global market research firm IHS Inc. estimates the market for flexible OLED would grow from 59 million units in 2016 to 416 million units in 2020.

LG Display whose OLED focus had been large-size display for TVs has become aggressive towards the smaller-size panels amid growing applications of OLED displays in smaller and mobile devices.

Its local rival Samsung Display Co. dominated the OLED market with 97.7 percent share as of the end of March as the panels for high-end phones for Samsung Electronics, the world’s largest smarphone maker, are in OLED. LG Display is the distant second with 0.9 percent, followed by Taiwanese AU Optronics Corp. with 0.7 percent.

LG Display has been producing 4.5th generation plastic OLED panels for smart watches from its Paju plant that has a monthly capacity of 14,000 sheets.

“A paradigm shift to OLED represents both a challenge and an opportunity for the display industry,” said Han Sang-beom, vice chairman and CEO of LG Display. “LG Display is determined to become the leader in the fast-growing OLED market through timely investments to maximize efficiency,” he added.

LG Display separately announced on Wednesday that its operating profit tumbled 91 percent on year to 44 billion won in the second quarter due to plunges in LCD panel prices as the result of overcapacity from expansion by Chinese rivals. It incurred a net loss of 84 billion won in the second quarter, compared with net income of 363 billion won in the same period a year ago. Sales decreased on year by 13 percent to 5.855 trillion won.

LG Display shares closed Tuesday at 30,450 won, up 1,200 won or 4.1 percent from the previous session.

By Lee Seung-hoon

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