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Korean factory collective transformation OLED: domestic manufacturers force LCD
In the past decade, LCD technology has dominated the television market. Its slim design and larger screen size have made it a popular choice, gradually phasing out CRT TVs. Early predictions about this shift have already been validated in the consumer market. However, since 2016, there has been growing speculation that the LCD era might be coming to an end. OLED technology is now seen as the most promising replacement due to its self-luminous properties, true-to-life colors, zero response delay, infinite contrast ratio, ultra-thin design, and flexibility.
South Korea, the world's largest panel producer, has taken a leading role in this transition. LG Display recently shut down its fifth-generation P4 plant in Gumi, following the closure of its 3.5-generation P2 line. It is expected that the fourth-generation P3 plant will also close by year-end. LGD plans to invest $18.08 billion in the OLED industry by 2020, with new facilities including P10 and E6 in Paju, E5 in Gumi, and an OLED plant in Guangzhou, China.
Samsung Display, another key player in South Korea, has also been closing older LCD factories. Over three consecutive years, it has shut down a 7th-generation panel factory and two 5th-generation plants. Additionally, Samsung has built two large-scale OLED panel factories in South Korea. This year alone, the company invested $8.8 billion to expand its production capacity, converting some LCD lines into OLED production lines.
From these trends, it’s clear that Korean manufacturers are accelerating the phase-out of smaller LCD panels, pushing toward OLED. While new technologies often replace old ones, this transition is still in progress. For now, OLED cannot fully replace LCD due to limitations in manufacturing processes and production capacity. LCD TVs still have at least five years of commercial life, especially in the large-screen segment, where cost and pricing make LCDs more viable for consumers.
The recent shutdown of Samsung’s 7th-generation panel plant caused a shortage of 40-inch TV panels. Similarly, LGD’s closures have led to structural changes in the global panel supply chain. But from another angle, this represents a new opportunity for domestic LCD manufacturers. If they can seize this moment, they may gain more partnerships and increase their influence in the market.
Currently, Chinese panel makers like BOE are focusing on 8.5-generation lines, which are crucial for producing 55-inch TVs. They also operate 4th, 5th, and 6th-generation lines for medium and small-sized panels. Only a few Chinese companies, such as AUO, Innolux, Caijing, and Huaying, are actively involved in various production lines. From a production capacity standpoint, Chinese manufacturers hold a unique advantage and are well-positioned to capitalize on the current market shifts.
While the shift to OLED is inevitable, it won’t happen overnight. LCD technology isn’t disappearing anytime soon, and the TV industry is set for major changes over the next five to ten years. The future looks bright for both technologies, but the road ahead remains dynamic and full of potential.