'Tandem OLED' Becomes the Savior for LG Display After 3 Years of Deficits

'Tandem OLED' Supply for iPad Pro 11 and 13-inch Models
Profitability Expected Despite High Panel Costs

The tandem organic light-emitting diode (OLED) panel, which enhances display brightness and durability, has emerged as a savior for LG Display, which has been stuck in the red for three years. This is because Apple applied the tandem OLED for the first time in the new iPad Pro released this year, which is expected to help improve the performance of LG Display, the panel manufacturer.

According to market research firm Omdia on the 4th, the price of the 11-inch OLED panel used in the iPad Pro is estimated to be about $280 to $290 (about 380,000 KRW), and the price of the 13-inch OLED panel is about $380 to $390 (about 520,000 KRW). Market research firm TrendForce forecasted that the total shipment volume of the iPad Pro equipped with 11-inch and 13-inch OLEDs will reach 4.5 to 5 million units this year. Considering this, LG Display, which supplies OLED panels, is expected to generate more than 2 trillion KRW in new annual sales.

Apple applied the 'two-stack tandem OLED' for the first time in the two iPad Pro models (11-inch, 12.9-inch) introduced this year. The two-stack tandem OLED features stacking two light-emitting layers while maintaining the same thickness as a single stack, thereby increasing luminance (brightness of the display device) and durability. Due to the high difficulty in producing the panel, currently only LG Display and Samsung Display manufacture it.

In particular, LG Display is reported to have secured more tandem OLED volume than Samsung Display. LG Display supplies OLED panels for both the 11-inch and 12.9-inch models of the iPad Pro, whereas Samsung Display only provides for the 11-inch model. LG Display began mass-producing tandem OLEDs for the first time in the world in 2019 and has been producing displays with the second generation since last year. Currently, it is developing third-generation technology. This is also why LG Display leads Samsung Display in supply volume.

Performance forecasts from the securities industry have also improved. The consensus for LG Display's second quarter this year (securities firms' estimates) is projected at sales of 6.3 trillion to 6.6 trillion KRW and an operating loss of 240 billion to 350 billion KRW. Compared to the same period last year, sales are expected to increase by 30%, and operating losses are expected to improve by 60%.

A senior company official also expressed optimism in a phone interview with Asia Economy, saying, "We are performing much better than market expectations. We expect the second quarter to also perform well."

Additionally, a series of upcoming sports events are expected to help the company's performance. The UEFA Euro 2024 is currently underway for a month since May 14, and the 2024 Summer Olympics will be held in Paris, France, starting on the 26th. Kim Sowon, a researcher at Kiwoom Securities, said, "The shipment volume of WOLED (white OLED) panels for TVs is expected to increase by 47% compared to the previous quarter, thanks to the effect of European sports events," and added, "The mass production effect of new POLED (plastic OLED) panels is also expected to be reflected from the end of the second quarter."

POLED is expected to be supplied to the two highest-end models, the Pro and Pro Max, of the Apple iPhone 16, which is anticipated to be unveiled in September. Apple plans to order a larger initial volume of OLED panels for the iPhone 16 from LG Display. Lee Gyuha, a researcher at NH Investment & Securities, estimated, "LG Display's North American smartphone panel shipment volume this year is expected to increase by 20% from the existing 57 million units to 68.5 million units," emphasizing, "Reflecting this, the operating profit forecast for the second half of this year is raised from 79 billion KRW to 399 billion KRW."

The financial investment industry estimates that LG Display will return to profitability in the third quarter of this year and record an operating profit of 300 billion KRW in the fourth quarter.