For LG Display, the world's largest maker of LCD screens, the future of television looks a lot thinner. The Korean company is betting big on screens powered by tiny organic light-emitting diodes, or OLEDs. Unlike LCDs, which rely on a separate light source behind the screen, OLEDs illuminate themselves, resulting in far slimmer and lighter displays. OLED TVs show deeper blacks and richer colours. "When you see one LCD and one OLED side by side, there's definitely a 120 per cent difference," says Han Sang Beom, LG Display's chief executive officer.
TVs as thin as smartphones are now possible, Han says. His company has invested $3 billion since 2010 in facilities that make OLEDs. The first televisions with the new screens are 55-, 65-, and 77-inch models made by LG Electronics. The OLED push by LG is the latest attempt to get consumers to spend more on TVs. LG, Samsung, and rival TV makers started heavily promoting 3D TVs in 2010, but sales were tepid. With this latest technology, LG is on its own. Samsung is a leader in making smaller-sized OLEDs for mobile phones, which it uses in its Galaxy smartphone line. It has backed away from larger versions and is sticking with LCD for its TVs.
That's allowed LG to gain an edge over Samsung in the category. The companies disagree on the best material for the back of the display: LG uses a metal oxide while Samsung's engineers favour low-temperature polysilicon. Samsung's choice, which works well for mobile devices, has consistency problems in larger sizes, says Alberto Moel, senior research analyst in Hong Kong with Sanford C Bernstein. LG's manufacturing process is more cost-effective, according to Moel. But the prices are still too high for most customers. "OLED has to be really price competitive to make people switch," he says. (In India, the lowest price for LG's three OLED television models is Rs 3,09,900.)
LG Display has suffered "massive losses" in its OLED business, says Peter Yu, a BNP Paribas analyst in Seoul, but its LCD business more than compensated. LCD earnings are at risk as newcomers in China try to catch up to the Koreans. Beijing-based BOE Technology said on April 20 that it will spend 40 billion yuan ($6.45 billion) on an LCD factory that will produce displays for large TVs when it opens in 2018. "If you just stay with the LCD business, the Chinese will eat you up," Yu says. "You don't want to be in a business where the Chinese are building capacity."
LG expects to sell 600,000 OLED TVs this year and 1.5 million next year. Claire Kim, an analyst in Seoul with Daishin Securities, says more efficient manufacturing of OLED panels will help bring the price down. Han is trying to persuade other TV brands that he won't name to incorporate OLEDs. Han says he's discussing the technology with Japanese companies. Interest from Samsung could help by popularising the technology with consumers, even if the company won't buy from rival LG. "While we possess extensive technological capabilities with regards to OLED TVs, the commercial adoption of OLED TVs remains at an early stage and the market has not yet reached its full potential," Samsung said in a statement.
Television, Han says, is just the beginning for OLED display technology. Not having to include a backlight means engineers can do more than create ultrathin displays - they can use the screens in foldable and concave displays. "I'm thinking beyond the TV," he says.
