Advanced Television

Report: Can LG start making profitable OLED TVs?

September 28, 2018

By Chris Forrester

South Korea’s electronics giant LG is facing a dilemma over its organic light emitting diode (OLED) TV business, according to news magazine Business Korea. The report recognises that LG has managed to secure an advantageous position in the global race to lead the next-generation TV market as an increasing number of TV producers have joined the OLED camp. “But the problem is that the increase in the number of OLED TV producers has sharply raised the average selling price (ASP) of large OLED panels, making it difficult for LG to improve the profitability of its OLED TV business.”

The publication refers to data from IHS Markit’s Industry Tracker data which highlights the ASP of large OLED panels and which increased from $695.47 (776,492 won) in the first quarter to $712.48 in Q2 (around 2.5 per cent). IHS says the figure is expected to remain strong in the second half of the year, rising to $731.90 in the third quarter and $729.96 in Q4. The price rises affect panels in the 55”-77” ranges, and IHS says another price rise could come later this year.

IHS says prices of panels is rising because supply cannot keep up with demand for finished displays such is the growth of the OLED market, and LG’s expanded OLED production lines will not make much of an impact until the second-half of 2019.

Global sales of OLED TVs are expected to increase from 2.54 million units this year to 3.6 million units in 2019, 6 million units in 2020 and 9.35 million units in 2022. The share of OLED TVs in the global TV market in terms of sales is forecast to expand from 5.8 per cent this year to 9.5 per cent in 2022, showing a nearly 10 per cent growth in four years.

LG has a 70 per cent market share in OLED displays, and is a monopoly supplier of the larger size panels.

LG Display posted a $204 million loss in Q2, and not helped by the rival take-up of (mostly) Chinese-built LCD units.

The dilemma is that while its Display division is raising prices – albeit by a modest amount – the retail LG Electronics division is making efforts to further popularise its OLED units, and has reduced prices of its extremely popular 55” models (reduced typically by about $270 from its previous retail price of about $1870).

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