LG Display’s China OLED Factory Plan Gets Approved

South Korea’s trade ministry said on Tuesday that a committee had approved LG Display Co Ltd’s plan to build a new organic light-emitting diode (OLED) panel production facility in China.

The panel under the Ministry of Trade, Industry and Energy had been reviewing the plan since July when LG Display asked the government to approve its investment in the southern Chinese city of Guangzhou.

The approval comes five months after LG Display announced it would invest in large-size OLED production in Guangzhou, China, to respond to fast-growing demand for the screens in TVs in overseas markets.

The ministry said in a statement that the approval was conditional on LG Display boosting the use of local materials and equipment, the subsequent investment in South Korea and strengthening processes such as security checks. An LG Display spokesperson did not have an immediate comment.

The approval could lead LG Display to one of the world’s biggest manufacturers of display panels used in smartphones and televisions, to boost its global market dominance for large OLED panels.

OLED technology has been garnering more attention as an alternative to the ubiquitous liquid crystal displays, and LG Display plans to ramp up its investment in the next-generation panel technology.

The company has said it plans to invest 5 trillion won ($4.7 billion), in China by 2020 – one-quarter of its OLED investment over the next three years – citing cheaper costs.

Currently, Korean display makers secure 30 percent of materials and 60 percent of equipment locally. The ministry urged LG to elevate that to 50 percent and 70 percent, respectively.

 
The ministry said LG had agreed to accept the conditions that also include toughened measures to prevent technology leaks.

The final approval will be delivered when specific action plans for the required conditions are submitted.

The technology for organic light-emitting diodes is one of the nation’s designated key technologies and receives state subsidies, so any plans for building a plant overseas require government approval.

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