LG Display has reportedly delayed mass production of OLED TV panels at its new 8.5-Gen fab in Guangzhou, China, until after the first quarter of next year.
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The Guangzhou fab began producing OLED TV panels after opening in August, but low production yields mean that it’s still not been able to ramp production to expected levels. The company had originally planned to produce around 5.5 million OLED panels in 2020, but those projections assumed the Guangzhou fab would be up and running at full capacity by the end of this year. As such, LG Display has now been forced to lower its production targets for 2020, Business Korea reported.
LG Display had previously said its new fab has a monthly capacity of 60,000 substrates, rising to 90,000 a month by 2021. The new facility is said to be similar to the company’s original OLED fab in Paju, South Korea, and so officials believed it would be possible to ramp up production very quickly. However, the fab also uses some new technologies that are meant to improve production yields. These include something called “Multi-Model Glass”, but these operations “haven’t been stablised yet”. In addition, LG Display is also said to be having problems implementing a new OLED stack that’s designed to improve efficiency, Business Korea added.
LG Display first announced it was building its Guangzhou fab in 2017, and has invested around $4.2 billion into the project, which is officially a joint venture between it and the Guangzhou Development District. LG Display holds a 70% stake in the joint venture.
The South Korean firm is hoping to benefit from a substantial reduction in production costs at the new fab, thanks to the new technologies it employs, the lower costs of labor in China and government subsidies. In addition, the fab may also help LG Display circumvent Japan’s recent export ban on South Korea, Business Korea said.
