LG Display's original plan was to start producing OLED TV panels at its 8.5-Gen OLED fab in Guangzhou in October 2019, but the company faced technical issues, pushed back production to the end of January 2020 - but fixing these issues took longer than expected.

LG Display 8.5-gen OLED TV fab in Guangzhou, China

The CoronaVirus outbreak caused LGD further delays, and mass production was again delayed to 'early' Q2 2020. The latest news from Korea suggests that now LGD has pushed back production in the Guangzhou fab to Q3 2020. The cause of these delays, is again yield issues, slow engineering work due to the Coronavirus isolation - and lower demand in the market (which seems to suggest that LGD is not in a rush to begin production).

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 highly likely that LGD will not be able to meet its goals. In its latest note, DSCC sees 4.5 million OLED TV panels being produced in 2020, while Omdia's forecast is for only 3.5 million TVs. With the latest delays in Guangzhou, it will be good if LGD will be able to meet these lower targets.

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 Goungzhou 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%.

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