After Google, Apple rumored to invest in LG’s OLED operation
With 95 percent of the market in its grip, Samsung Display’s position as the superpower of OLED industry seems unassailable.
But competitors – chief among them LG Display – are arming
themselves to challenge Samsung. Tens of billions are at stake, as the
world’s top manufacturers vie to secure OLED screens for hundreds of
millions of smartphones, tablets, and wearables.
LG Display is said to be in talks with Apple for a deal worth
more than $2.5 billion that would see the Korean company dedicate an
entire new OLED manufacturing line to the iPhone maker.
Apple could invest between $1.75 billion and $2.62 billion to fund LG Display’s upcoming E6 plant, industry sources told The Investor.
LG is currently buying equipment that would allow it to produce up to
60,000 OLED panel substrates every month at the plant. The E6 facility
would be LG’s third OLED plant. The company is already making flexible
OLED displays for Apple Watch on a 4.5-gen pilot line, and is currently
ramping up production at its E5 facility.
LG Display and Apple have “tentatively agreed” on the deal, but
the specifics are yet to be finalized. A final decision is expected
later this month, The Investor said.
Why are Google and Apple so keen to secure LG Display’s favors,
at such a hefty price? It’s, quite predictably, a matter of supply and
demand. OLED demand will skyrocket in the next years, and LG Display is
one of the handful of companies that could break Samsung’s near-monopoly
on the market.
Samsung is not sitting idle, of course. The conglomerate is spending heavily on new production facilities, including the largest OLED factory in the world. In anticipation of Apple and other phone makers switching en masse
to OLED, Samsung is eager to cash in on its decades-long bet on OLED
technology. The rise of foldable devices (which will use larger
displays) and a desire to raise the barrier of entry for Chinese
competitors are two other reasons why Samsung is further pouring money
LG, Google, and Apple are all rumored to take on the
Galaxy Note with new OLED smartphones launching this autumn. But that
market confrontation might be just a small skirmish in the grand scheme
of things, as the OLED arms race is heating up.