He added, "Although OLED is a lot tougher to manufacture than liquid crystal displays (LCD), LG Display has achieved a stable yield rate of production of more than 80 percent. Accordingly, the company has secured a monthly OLED production capacity of 100,000 units from August. Based on this, LG Display plans to continuously make an investment in production lines to expand the capacity to 2 million units next year and 2.5 million units by 2018.
"OLED TV panels recorded cumulative sales of 1 million units in September this year. With the achievement as a momentum, OLEDs are leading the global high-end market, such as China, North America and Europe. In North America, 55-inch OLED TVs account for more than 50 percent of the premium market over US$2,000 (2.29 million won), while 65-inch OLED TVs take up more than a half of the market over US$3,000 (3.43 million won)."
Currently, LG Electronics, China's Skyworth, Konka, and Changhong have released TVs using LG Display’s OLED panels, and Phillips has been selling its OLED TVs in China from September.
Third Quarter 2016 Results
LG Display also reported unaudited earnings results for the three-month period ending September 30, 2016. Revenues in the third quarter of 2016 increased by 15% to KRW 6,724 billion from KRW 5,855 billion in the second quarter of 2016 and decreased by 6% from KRW 7,158 billion in the third quarter of 2015.
Operating profit in the third quarter of 2016 recorded KRW 323 billion, a quarter-on-quarter increase of 634% from the operating profit of KRW 44 billion in the second quarter of 2016, and a year-on-year decrease of 3% from the operating profit of KRW 333 billion in the third quarter of 2015.
LG Display recorded its eighteenth straight quarterly operating profit, as a result of its differentiated strategy in technologies and products despite fierce competition among display manufacturers and a downwards trend in the exchange rate.
Under the growing trends for large-size panels as well as the rise in panel prices, LG Display increased revenues by 15% and operating profit by 634% quarter-on-quarter respectively by expanding the portion of differentiated and high value-added products such as Ultra HD and IPS panels to proactively meet market demands.
Panels for TVs accounted for 39% of the revenue in the third quarter of 2016, tablets and notebook PCs for 18%, mobile devices for 27%, and desktop monitors for 16%.
"The upwards trend of panel prices is expected to continue in the fourth quarter due to the growing trends towards large-size panels," said Don Kim, CFO of LG Display. "In addition, profits in the fourth quarter are anticipated to further improve significantly, especially with the expected increase in prices for 40-inch and above-size panels, which LG Display has a higher portion of."
He also added, "LG Display will maximize profitability with its differentiated technologies such as Ultra HD and IPS. As for OLED TVs, in which the company is aggressively putting efforts into improving productivity and reducing costs, we will improve profits by firmly establishing the premium TV market and by continuing efforts for expanding and diversifying customer base."