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Musing on Production
LGD Hope To Start Production At Guangzhou Fab Within 2 Weeks
April 05, 2020
LGD is likely to record a 1Q20 operating loss. With the spread of Covid-19 resulting in unstable operations at the firm’s new 8G OLED plant in China, the effects of full-scale operation at the new plant will become visible only from 2Q20. LG Display said it aims to complete its new organic light-emitting diode panel manufacturing plant in Guangzhou, China, soon and has deployed 290 engineers from here. The engineers flew on a chartered Korean Air flight after getting entry permission from Chinese authorities. They will stay at a quarantine facility prepared by the company for a certain period of time. All of them have tested negative for COVID-19. LG Display had planned to start operating the Guangzhou fab within the first quarter, but the COVID-19 outbreak made it postpone the schedule. The new Gen. 8.5 fab will be capable of churning out 90,000 substrates per month. The company is reportedly considering a variety of strategies (such as the use of charter airplanes) regarding normalization at the Chinese OLED facilities. Once the Covid-19 situation is alleviated, operations at the Chinese OLED plant will ramp up rapidly. LGD’s recent strategies to improve its financial and cash flow soundness (efficient allocation of assets, reduced capital expenditure, etc.) look positive. For LCDs, the benefit of rising LCD panel prices provided limited impact , as the effects of shipment volume decline due to reduced production capacity at domestic LCD facilities (P7, P8) outweighed price increases. According to OMDIA, LGD’s shipment volume for LCD panels (9-inch and above) in January and February both fell by more than 20% sequentially and Y/Y. The small/medium-sized OLED business saw sluggish facility utilization rates.
Samsung said it will cease the production of LCD panels by the end of 2020 to focus exclusively on OLED screens. A Samsung Display spokesman said the company will close all LCD production in South Korea and China later this year. The company had already closed a plant due to the low demand for LCD screens, but in any case, it will supply all the panels already ordered by customers until the end of the year. Over the next five years, Samsung will invest the money saved by closing these plants in a production facility for QD 1.0 (Blue OLED) and possibly QD 2.0 GaN nano rods). Samsung has not yet decided what to do with the two LCD factories in China that will close operations in the coming months.
LGD Hope To Start Production At Guangzhou Fab Within 2 Weeks
April 05, 2020
LGD is likely to record a 1Q20 operating loss. With the spread of Covid-19 resulting in unstable operations at the firm’s new 8G OLED plant in China, the effects of full-scale operation at the new plant will become visible only from 2Q20. LG Display said it aims to complete its new organic light-emitting diode panel manufacturing plant in Guangzhou, China, soon and has deployed 290 engineers from here. The engineers flew on a chartered Korean Air flight after getting entry permission from Chinese authorities. They will stay at a quarantine facility prepared by the company for a certain period of time. All of them have tested negative for COVID-19. LG Display had planned to start operating the Guangzhou fab within the first quarter, but the COVID-19 outbreak made it postpone the schedule. The new Gen. 8.5 fab will be capable of churning out 90,000 substrates per month. The company is reportedly considering a variety of strategies (such as the use of charter airplanes) regarding normalization at the Chinese OLED facilities. Once the Covid-19 situation is alleviated, operations at the Chinese OLED plant will ramp up rapidly. LGD’s recent strategies to improve its financial and cash flow soundness (efficient allocation of assets, reduced capital expenditure, etc.) look positive. For LCDs, the benefit of rising LCD panel prices provided limited impact , as the effects of shipment volume decline due to reduced production capacity at domestic LCD facilities (P7, P8) outweighed price increases. According to OMDIA, LGD’s shipment volume for LCD panels (9-inch and above) in January and February both fell by more than 20% sequentially and Y/Y. The small/medium-sized OLED business saw sluggish facility utilization rates.
Samsung said it will cease the production of LCD panels by the end of 2020 to focus exclusively on OLED screens. A Samsung Display spokesman said the company will close all LCD production in South Korea and China later this year. The company had already closed a plant due to the low demand for LCD screens, but in any case, it will supply all the panels already ordered by customers until the end of the year. Over the next five years, Samsung will invest the money saved by closing these plants in a production facility for QD 1.0 (Blue OLED) and possibly QD 2.0 GaN nano rods). Samsung has not yet decided what to do with the two LCD factories in China that will close operations in the coming months.
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