November 22, 2024

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LG Display is considering shutting down its E2 OLED display factory in Paju, Gyeonggi Province in the face of widening losses, according to news reports on Sept. 20.

The South Korean display manufacturer rolls out 4.5th generation flexible OLED displays, measuring 730 millimeters by 920 millimeters, at the E2 plant. The OLED displays made at the factory are utilized for smartwatches and smartphones, including Apple Watch. 

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Among the three manufacturing lines at the plant, only one is in full operation to produce OLED screens for Apple’s smartwatches. The total production capacity of the E2 reaches, at full throttle, 20,000 per month.

The E2 was the company’s first plant producing screens for small- and mid-sized devices, and started operating in 2013. It has been outpaced by other more productive and efficient OLED plants in recent years. After the shutdown, LGD will likely transfer production to its other plants, like E5 where the company is currently producing OLEDs for smartphones and cars.

In contrast to the large OLED displays, such as those for TVs, digital signage, and automobiles, small- and mid-sized OLED panels have been generating operating losses over the years.

The widening losses are often attributed to the belated investment in the OLED smartphone segment.

“The outgoing CEO Han Sang-Boom, who began to lead the firm in 2012, had put too much emphasis on improving the figures during his early years as CEO, while neglecting emerging businesses, like smartphone displays,” said an industry source who wished to be unnamed.

Han offered to resign earlier this week, and former LG Chem President Jeong Ho-young has been named to take the helm of the display manufacturer.

The Korean firm recently decided to streamline its LCD lines in China, laying off 5,000 employees, because it was losing ground to fast-growing Chinese players such as BOE and CSOT.

In the second quarter this year, the firm posted an operating loss of 501 billion won ($421 million) in the first half -- 369 billion won and 132 billion won in the first and second quarters, respectively.

By Kim Young-won (wone0102@heraldcorp.com)