Google offers to invest W1 tril. in LG Display

By Yoon Sung-won

Google has offered to invest 1 trillion won ($880 million) in LG Display to secure organic light-emitting diode (OLED) display panels for smartphones, industry sources said Monday.

The U.S. tech giant had sourced flexible OLED display panels from Samsung Display; and its move to explore a deal with LG is to diversify the supply channels to produce its new “Pixel” series smartphones.

Google’s investment offer is to help LG Display build a manufacturing line for the sixth-generation small- and medium-sized flexible OLED panels.

LG Display neither denied nor confirmed Google’s investment plan.

“It is difficult for us to confirm or talk about details of the relationship with our client,” an LG Display spokeswoman said.
Google also declined to comment.

Google released the Pixel series smartphones last year as the new reference handsets for its Android mobile operating system. The Pixel series replaced the “Nexus” series, which Google formerly released under partnerships with handset manufacturers such as LG Electronics and Huawei.

The Pixel smartphones, which have OLED displays, drew favorable market responses, especially in the absence of Samsung Electronics’ Galaxy Note 7. But Google did not provide the Pixel smartphones on a massive scale due to an insufficient supply of small-sized OLED panels, according to observers.

LG Display has made a relatively belated start in the small- and medium-sized flexible OLED panel business than its rival Samsung Display. It has relied on liquid crystal displays (LCD) for its phones while pushing large-sized OLED panels for televisions.

LG Display is currently working to establish sixth-generation flexible OLED production facilities in its plants at Gumi, North Gyeongsang Province, and Paju, Gyeonggi Province. The facility at the Gumi plant is expected to start operating in the third quarter of this year, while the one in Paju is likely to begin operations next year.

LG Display has invested 1.5 trillion won in the Gumi plant and over 1.99 trillion won in Paju. The company is expected to make additional investments to expand manufacturing as soon as both factories are in production.

“The investment can be a big boon for LG Display,” an industry source said. “The company needs money to diversify from LCD and large-sized OLED panels. The possible deal with Google will help LG Display not only reduce the burden to expand production capability but also secure a major client over the long term.”

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