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Will LG’s OLED TV Panels Remain Profitable in the Next 4 Years?
February 18, 2019
DSCC showed there analysis of the costs of 55” and 65” OLED TV panels made using LGD’s amorphous oxide and WRGB process. DSCC shows the panel costs dropping from $475 in 2019 to $375 by 2022. DSCC puts the ASP in 2019 at $510, which indicates that LGD will make a profit on what is estimated to be ~2m 55” OLED panels. But DSCC has bad news for LGD as they estimate that in 2020, the 55” panels will barely break even and will lose money in 2021 and breakeven in 2022.
Figure 1: DSCC’s Project of 55” OLED UHD Panel Costs
February 18, 2019
DSCC showed there analysis of the costs of 55” and 65” OLED TV panels made using LGD’s amorphous oxide and WRGB process. DSCC shows the panel costs dropping from $475 in 2019 to $375 by 2022. DSCC puts the ASP in 2019 at $510, which indicates that LGD will make a profit on what is estimated to be ~2m 55” OLED panels. But DSCC has bad news for LGD as they estimate that in 2020, the 55” panels will barely break even and will lose money in 2021 and breakeven in 2022.
Figure 1: DSCC’s Project of 55” OLED UHD Panel Costs
Source: DSCC
The next figure shows 2019 OLED cost estimates for DSCC and IHS, which are comparable and also provides the IHS estimate for LCDs. The IHS estimate for LCDs are shown to be $175 less than the OLED.
Figure 2: 55” Cost Comparisons, IHS vs. DSCC
Figure 2: 55” Cost Comparisons, IHS vs. DSCC
Source: DSCC, IHS, OLED-A
The IHS cost forecast was for 2017 but did not have all the cost elements that DSCC carried so it was adjusted.
In contrast to the profitability of the 55” panel, DSCC expects the 65” panel built on LGD’s new Gen 8.5 fab to be very profitable, even as the Gen 10.5 LCD fabs reach volume production and costs of ~$385 in 2019, which as the next figure shows is ~1/2 the cost of the comparable OLED. Even with the severe cost down projected by DSCC, the OLED 65” panel never gets to the LCD cost. There are some mitigating factors that cost help LGD’s panel be more competitive, including adding to additional ~49” displays to the substrate using MMG, which would cut into the depreciation allocation to the 65” displays and the extra cost of the QD film (~$40) to upgrade the LCD panel.
In contrast to the profitability of the 55” panel, DSCC expects the 65” panel built on LGD’s new Gen 8.5 fab to be very profitable, even as the Gen 10.5 LCD fabs reach volume production and costs of ~$385 in 2019, which as the next figure shows is ~1/2 the cost of the comparable OLED. Even with the severe cost down projected by DSCC, the OLED 65” panel never gets to the LCD cost. There are some mitigating factors that cost help LGD’s panel be more competitive, including adding to additional ~49” displays to the substrate using MMG, which would cut into the depreciation allocation to the 65” displays and the extra cost of the QD film (~$40) to upgrade the LCD panel.
Figure 3: DSCC’s Project of 65” OLED UHD Panel Costs (China)
Source: DSCC