LG Display Needs LCD Revenue to Generate Profit While it Invests in OLEDs
June 11, 2018
LG Display Co. is predicting that liquid-crystal displays will generate most of its overall sales through next year even as it pushes to provide Apple with an alternative to Samsung Electronics Co. when it comes to smaller OLEDs. Producing the screens for smartphones in high volumes is a “struggle,” said Yoon Soo-young, head of research & development at the Seoul-based company. With a glut of LCD output crimping prices and profit margins for the industry, LG is trying to overcome poor production yields to win OLED orders from Apple. The Seoul-based company has never made an operating profit from the next generation TV screens, which cost more but are valued for their brighter colors and flexible shapes. LGD expects to at least break even in 2018.
“I can hear the sound of prices dropping,” Yoon said. “We still need to earn money from LCDs. OLEDs need a lot of investing and we need profits from our LCD business to fund the investments.” The South Korean company is targeting for OLEDs to account for 40 percent of revenue by 2020, with the rest coming from LCDs. Yoon spoke with Bloomberg News about LG Display’s prospects and challenges.
Will LG eventually stop producing LCDs?
Yoon: “China is building so many 10.5 generation LCD factories. If it continues to get harder to make money from LCDs, there’s no reason not to make the switch. How fast we get there and how aggressively we push for it could change but that’s the direction we’re headed.”
What are the challenges in growing bigger with OLEDs?
“We’re the only producer of large-sized OLED panels for TVs. The ecosystem needs to have at least two to three players for a healthy environment. LCD will inevitably remain the dominant technology for a considerable time. Although OLEDs have taken hold of the premium TV market that’s only about 3 percent of the broader market.”
What are some achievements since LG’s first OLED TV in 2013?
“We’ll be able to generate profit in the near future. OLEDs have now gone mainstream, at least in the premium market, whereas we were trying to find a place for OLEDs back then. People have stopped asking the ‘so what’ questions about OLEDs.”
What’s the latest on OLED displays for foldable devices?
“It may take a few more years. But things have become more detailed than before.” Yoon said there is a push for larger screens in smaller packages, and flexible OLED makes that possible, but it has yet to be worked out whether it’s best on the inside of the fold or wrapped around the outside of the device where it it’s exposed to external shocks. “The market isn’t very big yet. We’ve been saying that the market will get bigger from 2020. We unveiled a high-resolution display with pixels per inch of about 1,440 for the first time last month. But I’m not sure yet how big the market will get. Everything has to come together including relevant content and the infrastructure. It’ll take a bit of time. Infrastructure has improved but many devices are for individual content producers while there isn’t much for broadcasting systems.”
In late May, LG and Google showed off a tiny piece of glass that's going to change VR and AR forever. It was a 4.3-inch 3840 x 4800 (18-megapixel) OLED display with a 120 x 96 field of view. A quick check of the math says that means it has 1,443 pixels-per-inch, which makes it the highest resolution display ever. Oh — it also has a 120Hz refresh rate. If you have an Oculus Rift or HTC Vive you might understand why this is amazing. If you don't, you need to understand that VR headsets work by projecting images on two small displays positioned very close to your eyeballs. That gives a sense of immersion, which is kind of important if you want to make virtual reality feel like real reality. It also means that everything can look like a screen door because the pixels are so close to your eyes, you can feel claustrophobic because the field of view is too narrow. Even a 60 or 90Hz refresh rate can leave you feeling a bit seasick under the right (or wrong) conditions.
You also need to know that Google Daydream and Samsung's Gear VR are verycool but smartphone-powered VR isn't nearly as "powerful" as a headset that uses a PC engine and GPU, and can amplify every one of these problems. VR is new technology, and the issues that surround every new tech are there to be solved. One way to work them out is with a kicking display in front of your eyes that aims to reach the limits of human vision.