In 2017, LG Display (LGD) announced it would build a Gen 8.5 OLED fab in Guangzhou, China, with production of TV-sized panels to begin October 2019. Initial production was to be 60,000 substrates per month. But very little went according to plan, as has been reported through the years by Display Daily and other publications.
First, getting government approval was difficult, not only from China but also from the Korean government, which viewed OLED manufacturing as a strategic technology. But the Chinese fab was important. LGD conceived of the $4.2 billion project as a joint venture with the Guangzhou Development District (GDD), with the display company holding a 70 percent stake. DSCC estimated at the time that it was only with the GDD’s investment, government subsidies, and cheaper Chinese labor costs that LGD could turn a profit on 55-inch OLED panels. (Please note that LGD has stated the 55-inch panels made at the company’s existing fab in Paju, South Korea are now profitable without subsidies.) The government approvals came through in July 2018.
LG Display’s Gen 8.5 plant in Guangzhou is impressive, but yield problems have once again delayed volume production, this time until Q3 2020. (Photo: LG Display)
In order to accelerate ramp-up and rapidly climb the yield curve at the new plant, LGD planned to reproduce in Guangzhou the equipment and processes of the Paju plant. But as time went on LGD increasingly violated its own concept, and in a big way. The company opted to use processing equipment made in China rather than the proven Korean equipment used in Paju. It also implemented a new OLED stack architecture, and used a technology called multi-modal glass (MMG), in which panels of different sizes are made on the same substrate. This is a proven technology for LCDs but not for OLED displays.
It has been reported that the MMG is a significant contributor to the poor yields LGD has been experiencing in Guangzhou, and that the yields had not been stabilized as of late May 2020 according to Chosun Business News. These technical issues, along with additional delays from the Novel Corona Virus, forced LGD to move its target for volume manufacturing to January 2020, then early Q2 2020, and now Q3 2020.
LGD originally intended to ship over 6 million OLED TV panels in 2020 from both the Guangzhou and Paju fabs, a number that includes the 48-inch panels introduced at CES 2020. DSCC now estimates that only 4.5 million OLED TV panels will be produced in 2020. Chosun business News suggests that with the continuing delays in Guangzhou,
“it will be good if LGD will be able to meet these lower targets.”
(KW)
Ken Werner is Principal of Nutmeg Consultants, specializing in the display industry, manufacturing, technology, and applications, including mobile devices, automotive, and television. He consults for attorneys, investment analysts, and companies re-positioning themselves within the display industry or using displays in their products. He is the 2017 recipient of the Society for Information Display’s Lewis and Beatrice Winner Award. You can reach him at [email protected] or www.nutmegconsultants.com.
