In the first quarter of this year, the sales of organic light-emitting diode (OLED) TVs in Europe, a barometer of the global premium TV market, have reached an all-time high, leading LG Display, which occupies about 80% of the global OLED TV panel market, to strengthen its production capacity. Previously, LG Display decided to invest 1.26 trillion won in facilities for developing new OLED technologies and is reportedly raising its factory utilization to maximum levels.
According to industry sources on the 24th, LG Display is expected to adjust its utilization rate upward as demand for OLED panels for TVs is surging in the European market, alongside increased volume requests from major TV customers. Samsung Electronics and LG Electronics are focusing on OLED TVs as their key products this year, diversifying their OLED TV product lineups in the premium TV market.
Research firm Omdia reported that Europe's OLED TV sales in the first quarter of this year reached approximately $1.06333 billion (approximately 1.4672 trillion won). This surpasses the sales of approximately $1.01964 billion during the first quarter of 2022, when the global home appliance market benefited from the COVID-19 pandemic. Compared to the same period last year, this represents a 13% growth, contrasting with a 7% decline in LCD (liquid crystal display) TV sales during the same period.
Other market research firms also project that the growth of OLED TVs will continue in the medium to long term starting this year. Research firm Ubi Research forecasts that global shipments of OLED TVs will approach 10 million units by 2028. According to Ubi Research, Samsung Electronics, the world's largest TV manufacturer, is reportedly strengthening its OLED strategy in response to the Mini-LED offensive from Chinese TV manufacturers. After declaring its goal of achieving the top position in the OLED TV market, Samsung Electronics has been continually increasing the proportion of OLED adoption in the premium TV market.
Reports indicate that the volume of TV OLED panels purchased by Samsung Electronics from LG Display is gradually increasing. According to industry sources, Samsung Electronics is currently pushing for an expansion in the purchase of white (W)-OLED panels from LG Display. Earlier this year, Samsung Electronics expanded its OLED TV lineup from four existing sizes to six sizes (42, 48, 55, 65, 77, and 83 inches). For the 55, 65, and 77-inch models, it has been utilizing both quantum dot (QD)-OLED panels produced by Samsung Display and W-OLED panels from LG Display since last year.
Riding this trend, LG Display aims to completely escape the pitfalls of deficit this year. LG Display has recorded an annual operating loss of around 2 trillion won from 2022 to 2023. However, it significantly reduced its deficit to 560.6 billion won last year.
The production cost gap between LCD and OLED panels is also narrowing. Industry estimates typically place the manufacturing cost of OLED panels for a 55-inch ultra-high-definition (UHD) model at 2.5 times that of LCD panels. However, in the second half of this year, the depreciation of some equipment in factories in Guangzhou, China, and Paju, South Korea, is expected to alleviate the cost burden of manufacturing OLED TV panels. Once the manufacturing equipment is fully depreciated, the cost difference between the two panels will narrow to 1.6 times.
In the securities industry, some projections suggest that LG Display may achieve profitability as early as the second quarter of this year, which was previously thought possible only in the latter half of the year. According to financial data provider FnGuide, LG Display's annual operating profit is estimated at 679.3 billion won, with some securities companies predicting it could exceed 700 billion won.
LG Display intends to maintain its competitive edge through next-generation OLED technology. The fourth-generation OLED panel from LG Display features a unique 'primary RGB tandem' structure that independently stacks RGB (red, green, blue) devices to emit light. This achievement has reached a maximum brightness of 4000 nits (nit, equivalent to the brightness of a single candle), the highest level in the industry. Improvements in device structure and power supply systems have enhanced its energy efficiency by about 20% compared to previous models (based on 65 inches), and it has been evaluated as optimized for artificial intelligence (AI) TVs.