A research report from KB Securities is pointing out how effective the Samsung and LG frenemy thing is turning out to be. While Samsung can continue to grow its TV business, the supply of large OLED panels by LG Display to Samsung is expected to max out the company’s production capacity meaning better prices, better margins, and a return to operational profitability for the organization.
LG is expected to supply Samsung with 150,000 units of 77 and 83-inch WOLED panels, a tenfold increase compared to the previous year. In 2024, the estimated supply of WOLED panels is expected to reach 1.5 million units, another tenfold increase. With large-sized panels of 77 and 83 inches, LG’s Gen 8 WOLED production volume is expected to be 2.5 times higher than that of 55 and 65-inch panels. The 1.5 million larger format panel units (KB Securities values this at $1.5 billion in sales) are the equivalent of 3.75 million 55 and 65-inch panels.
LG’s existing TV customers, including LG Electronics, Sony, and various Chinese TV brands, should account for an equivalent 6 million panels and the production capacity for LG’s WOLED panels is 9 million units in total. Add it all up and the operation of the WOLED line should surpass full capacity in 2024. And that’s why the financial analysts are bullish on LG Display’s performance. That’s going to be a hell of a turnaround from six quarters of disastrous declines for the company. Sales are expected to increase by 23% in 2024 to 26.3 trillion won ($19.8 billion) helped by a backlog of orders for automotive displays, as well as the additional WOLED sales.