LG is Making Progress in OLED Manufacturing

OLED – TechRadar reports that LG has made considerable progress in its OLED TV manufacturing. This report is based on an interview with K I Kwon, president of LG Electronics UK. This  follows our article “LG Slashes Prices on 55? Curved OLED TV” and gives a possible explanation for why LG lowered the prices on its existing 55″ OLED TV.

According to the interview, LG has increased the production yield of its OLED line to allow the lower TV market pricing. In addition, after moving production to the M2 facility the company expects further efficiency gains from the larger substrate size that allows LG to make six 55″ and three 65″ panels from one mother sheet. This compares to only one 65″ panel per mother substrate on the M1 line. LG also expects better manufacturing yield on the new line, which should lead to even better pricing in the future. There are also reports about the first LG UltraHD 65″ OLED coming to the market in November, followed by a 77″ at a later date.  As for the price, the 65″ model will be offered for over $10,000 (£6,499).  There has been no pricing revealed yet for the 77″ model. As the article also notes, LG was able to produce twice as many OLED panels compared to 2013.  This comparison is based on panel output versus raw material input – in other words the company doubled its manufacturing yield.  LG does not state how much this is influenced by adding the M2 line to the mix and how the yield improvements are divided by the two lines. For example, looking at the larger substrate size, large panels will have a much higher yield as described above. In the case of the 65″ panel, the yield improvement is already 300% based on substrate throughput. In other words, doubling the throughput would mean not much in terms of manufacturing yield for large panels, as all of the yield improvements could be explained by the larger mother glass. We do not think that this is what is happening but it also suggests that the statements are vague at best. With higher yields and a second factory coming online, LG should be able to increase its OLED production capacity significantly. As a consequence, the company has to come up with some design wins for their OLED panels to fill the factories.  Maybe lowering the OLED TV price in the market is one way to increase the OLED display panel usage at LG. Of course, with the UltraHD OLED TV arriving in the market this year,  sales of the current 55″ TV will not increase much after that release, unless the price differential is really attractive. Even then, the most likely buyer of a  full HD OLED TV today is an early adopter. This kind of buyer may be attracted to the improved image quality, but he will also be attracted to the 4K/UHD LCD models  in the market. The only way to know if OLED is finally gaining a foothold in the TV market is if we see increasing sales of OLED models from several first and second tier brands. While this is still several years away, it appears that LG is making progress. – Norbert Hildebrand