LG Display postpones starting Paju OLED line operation indefinitely
Company squeezed by losses, lower than expected operating at Guangzhou
LG Display has delayed the starting of operations at its 10.5th-generation organic light emitting diode (OLED) panel line at Paju indefinitely, sources within the company told TheElec on Tuesday.
The company initially planned to begin production sometime between 2022 to 2023 but this has been delayed by three years to between 2025 to 2026, they said. Though nominally three years, it is in fact an indefinite delay, they added.
In January this year, LG Display has announced that it was postponing investments into the factory, dubbed P10. The company said at the time that it expected investments into the 10.5th-generation (2940mm x 3370mm) line to begin in or after 2023.
A month earlier in December, the South Korean display panel maker notified its equipment suppliers beforehand that it expects production at P10 to be delayed.
At the time, it was expected to be a delay of one to two years. Initially, the factory was set to began operations in 2022 with a production rate of 30,000 substrates per month. This would have been increased to 45,000 substrates per month in the first half of 2023. Chemical vapor deposition equipment made by US’s Applied Materials and Jusung Engineering has already been supplied to the factory in May, 2019.
However, LG Display has not sent any updated schedule to its suppliers since then, which raised fears of further postponements.
YAS, which supplies OLED deposition equipment to LG, is yet to receive the order for the needed equipment. It should have been supplied no later then in February even in LG’s one to two years delay schedule.
LG Display has posted five straight quarters of losses as of the first quarter of 2020. It is facing stiff competition from Chinese vendors in Liquid Crystal Display (LCD) and lower than expected demand for OLED panels.
Its current 8.5th generation OLED line at Guangzhou, China has also suffered from lowered operation rate. This will need to recover for LG to begin considering investing at its 10.5th generation OLED line in Paju, South Korea.
LG Display will announce its future plans for the Paju line at its conference call for the second quarter on July 23, one of the people said.