LG Display originally planned to start producing OLED TV panels at its 8.5-Gen OLED fab in Guangzhou in October 2019, but LGD faced technical issues and production was delayed to Q1 2020. Last month LGD said it finally fixed its technical issues and production will start by the end of January 2020 - but here we are at the middle of February and production hasn't started yet.

LGD's original plan was to ship over 6 million OLED TV panels in 2020 - which include the smaller 48" OLED TV panels launched at CES 2020. It seems certain now that LGD will not be able to meet its goals. IHS also reduced its 2020 OLED TV production forecast from 5 million units to 4.5 million.

LGD's new fab has a monthly capacity of 60,000 substrates, which will be expanded to 90,000 by 2021 (that's the plan, anyway). The new Gaungzhou fab is similar to LG's current Paju OLED TV fab, and LGD believed it will ramp up very quickly. But the company also decided to adopt several new technologies in this new fab - ironically mostly to improve productivity (including MMG, which seems to be the most challenging technology and the main cause of the low yields) and these hasn't been stabilized yet. In addition LGD opted to use a new OLED stack (to improve efficiency and productivity at the same time) and also for new equipment produced in China (rather than the Korean equipment in uses in Paju).

LG's Goungzhou fab was announced in 2017, but the company found it challenging to get approval from both the Chinese and Korean government - which it finally got in July 2018. The total investment in the new fab was about $4.2 billion. The new fab was established in a joint venture established between LG Display and Guangzhou Development District (GDD). LG Display holds a 70 percent stake in the JV.



55'' OLED TV panel production cost, 2016-2022 China vs Korea (DSCC)

LGD hopes that the new Chinese fab will enable it to cut production costs due to lower wages, government subsidies and the new technologies used . DSCC estimates that the subsidies will reduce LGD's depreciation costs by 65%. An unexpected bonus may be that this fab could enable LGD to circumvent Japan's recent export ban on Korea.

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Production or mass production

When you say production hasn't started, do you mean "mass production"? Do we have a decent sense of what % of the 60,000 capacity they are running at in February? 

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