LG Display signed off on a supply contract with SONY regarding OLED panels for TVs. It seems that LG Display will start supplying its panels in second quarter of this year and this will help expand influence of OLED TVs.
According to an industry on the 2nd, LG Display and SONY signed off on a supply contract regarding OLED panels for TVs. LG Display is going to start supplying its panels in second quarter while SONY will starting putting out OLED TVs in third quarter. Both companies had been making negotiations regarding plans on supply of OLED panels.
It is heard that SONY will produce about 100,000 OLED TVs yearly. Considering that LG Electronics shipped out 110,000 to 140,000 OLED TVs per quarter in 2016, this is somewhat a small amount.
It seems that SONY cannot produce that many OLED TVs because LG Display’s ability to produce OLED panels is very tight and it cannot supply enough OLED panels. Because SONY is still has its LCD TVs as its premium products, it seems that SONY is trying to examine early market responses on OLED TVs.
LG Display’s ability to produce 8th generation OLED panels by end of last year was 34,000 OLED panels per month. If it operates E4-2 line, which is an extension that was established last year, starting from first half of this year, it will be able to produce additional 25,000 OLED panels per month by end of this year and have an ability to produce about 59,000 to 60,000 OLED panels per month. This is a size that can produce 170,000 to 180,000 65-inch UHD TVs.
SONY is very active on releasing its OLED TVs and this is why it requested LG Display to supply its panels faster and more than initial amount.
LG Display supplied about 100,000 OLED panels to LG Electronics in first three quarters of 2016 and increased amount of supply to 300,000 in fourth quarter. Markets are predicting that LG Display will supply about 200,000 panels per quarter this year.
It is difficult for LG Display to supply large amount of panels in this situation and this is why SONY is producing somewhat small amount of OLED TVs this year.
It seems that this supply contract will not have huge impact on LG Display’s performance. When amount of supplies increases due to investments in extension of facilities in the future then LG Display will be able to attract new customers.
As SONY is joining camp for OLED TV, this will trigger fiercer competitions between camps for OLED TV and Quantum-Dot TV within markets for premium TVs. This might also help in expanding base for OLED TV markets.
“Yield of UHD OLED TV panels for LG Display is approaching golden yield as it is higher than 2015.” said a representative for an industry. “Range of profit will become bigger for LG Display’s OLED TV panel business.” Regarding a supply contract between LG Display and SONY, a representative for LG Display said that LG Display cannot disclose any information regarding its customers.
Staff Reporter Bae, Okjin | firstname.lastname@example.org
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