[THE INVESTOR] South Korean display manufacturer LG Display will pour more than 1 trillion won (US$876million) into constructing assembly lines for organic light-emitting diode display modules in Haiphong, a northeastern port city of Vietnam, according to the firm on March 2.
After initially spending 120 billion won for the establishment of its Vietnamese headquarters, the company broke ground for the construction of the assembly lines in May last year. It also raised 680.7-billion-won funds through state-run agencies and private financial institutes, including Korea Trade Insurance Corporation, an export credit agency, and BNP Paribas.
When the display business arm of LG Group successfully secures its planned 200-billion-won funds this year, the entire investment for LGD’s construction project in Vietnam will total more than 1 trillion won.
“The funds will be used to build the OLED assembly lines and other facilities, such as dormitories for employees,” said an LG Display official, adding the company will try to raise additional funds, if needed, down the road.
The construction is scheduled to be completed in April and the assembly lines will start to churn out OLED display modules from July.
LGD’s Vietnamese assembly lines will be the firm’s first overseas complex dedicated to the OLED. It has shunned building OLED facilities out of Korea in part to prevent a possible leak of core display technologies.
The display firm currently runs two manufacturing plants for OLED displays in the Korean cities of Paju and Gumi.
The decision to build the Vietnamese complex is said to have been made to better respond to increasing demand for OLED displays in the global market.
Major TV and smartphone makers are increasingly adopting OLED displays for electronic products and mobile devices, ditching traditional liquid crystal displays.
Building the facilities in Vietnam, rather than China where the firm has been operating LCD facilities, is also aimed at reducing labor costs and avoiding risks stemming from the Chinese government’s hostile economic policies toward Korean companies due to the recent Korean decision to deploy the US terminal high altitude area defense missile system.
“The Chinese government is highly anticipated to levy hefty taxes on Korean display manufacturers in a bid to nurture homegrown display makers,” an industry official said.
LGD will be able to supply OLED displays readily to its sister firm LG Electronics’ production facilities in the same Vietnamese city and TV production plants in nearby Chinese cities, the LGD official said.
By Kim Young-won (email@example.com)