LG Display Co., a supplier to Apple Inc., plans to invest about 10 trillion won ($8.5 billion) over the next three years to develop next-generation screens to reverse slowing growth and gain an edge over competitors.
LG Display will shift its investment focus to screens powered by tiny organic light-emitting diodes, or OLEDs, the Seoul-based company said in an e-mailed statement Monday. The world’s largest maker of liquid crystal displays is betting on growth in demand for advanced displays, including foldable screens, for wearable devices, cars and televisions.
The display maker has set its sights on new technology as competition from up-and-coming Chinese manufacturers intensifies and demand for consumer electronics slows. The leader in large OLEDs is trying to expand its footprint in smaller devices, as it grapples with tepid sales and declining prices for LCD screens in TVs and computers.
“The investment aims to make LG Display grow as a sustainable company,” Chief Executive Officer Han Sang Beom said in the statement. LG Display’s priority is to “pioneer this untapped OLED market to sustain our leadership in the display industry and keep the competitors at bay.”
The global OLED market is forecast to grow to $28.3 billion by 2022, from $8.7 billion last year, the company said in the statement, citing estimates by researcher DisplaySearch.
Yet display earnings are at risk as Chinese newcomers try to catch up with the Koreans. Beijing-based BOE Technology Group Co. said in April it will spend 40 billion yuan ($6.3 billion) on an LCD factory that will produce displays for large TVs when it opens in 2018.
LG Display last month posted a better-than-expected second-quarter operating profit of 488 billion won.
However, sales growth slowed to 12 percent from the preceding period’s 26 percent pace. Chief Financial Officer Don Kim said at the time he expected panel prices to continue their downtrend in the third quarter.