[Asia Economy Reporter Jeong Hyunjin] LG Display is securing profitability by reducing the production cost of TV OLED panels through its Guangzhou factory in China, which began full-scale mass production last year. The cost is up to 14% cheaper than the Paju factory in Gyeonggi Province, and it is expected to play a key role as LG Display's main large OLED panel production base.
According to market research firm Display Supply Chain Consultants (DSCC) on the 21st, LG Display is predicted to lower the production cost of large OLED panels made at its 8.5-generation OLED fab in Guangzhou, China, compared to last year. This factory began full-scale mass production of large OLED panels in July last year. Currently, the production volume of the Guangzhou factory is about 60,000 units per month, similar to the Paju factory's monthly production of 70,000 units. LG Display, the only company producing OLED panels for TVs, regards both factories as large OLED production bases.
DSCC analyzed, "Until last year, the panel production cost at the Guangzhou fab in China was higher than that of the Paju factory, but recently, depreciation, labor costs, indirect costs, and selling and administrative expenses have decreased, narrowing the profitability gap between Korea and China and lowering total costs." In particular, "For 48-inch products, the production cost in China this year is estimated to be 13-14% lower than that produced in domestic factories," and it is expected that 65-inch panels will show similar price competitiveness.
DSCC forecasted that LG Display's large OLED panel sales volume will nearly double from 4.4 million units last year to 7 to 8 million units this year. As sales volume expands and prices adjust, prices by size have also changed. Until last year, the cheapest size among OLED TV panels was 55 inches, but starting this year, the 48-inch UHD panel is priced about 20% lower than the 55-inch UHD panel.
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