LG Display more than doubled its tablet display sales revenue in the second quarter compared to the first, thanks to panel shipments for the iPad from Apple Inc., according to IHS iSuppli insights from the Small and Medium Display service of information and analytics provider IHS.
At the same time, the South Korean electronics giant indicated it would convert some of its current Generation 6 amorphous-silicon liquid crystal display (a-Si LCD) fab production capacity into low-temperature polysilicon (LTPS) LCD likely to be used for smartphones—a move that is believed would allow LG to meet future panel demand for smartphones, such as the new Apple iPhone.
The two developments from LGD on both the tablet and fab conversion fronts were discussed by the company in its most recent results announcement with industry analysts.
LGD said during the session its tablet panel revenue reached $610 million in the second quarter. This indicates the company’s tablet panel sales performance was up a stellar 126 percent—more than double—from $270 million in the first quarter. LGD also said the sales percentage of tablet panels in the firm’s overall product line doubled between the two quarters—from 5 to 10 percent. By the end of the second quarter, LGD’s total sales revenue stood at $6.12 billion, compared to $5.48 billion in the first, according to the company.
LGD can be grateful to Apple for its outsized presence in the market for small- and medium-sized display panels, defined as those sized less than 10.x inches, and used in products like smartphones and digital still cameras, in addition to tablets. The company started volume shipment for the new iPad panels—the third iteration of Apple’s best-selling media tablet device—during the second quarter, IHS iSuppli believes, on top of furnishing panels for the older iPad 2 version. This in effect amplified LG’s presence in the Apple supply chain, in addition to the company already supplying tablet panels in the first quarter to other tablet players such as Amazon, Barnes & Noble and Research In Motion.
Overall, LGD commanded 38 percent share of the tablet display market sized smaller than 10-inches during the first quarter, when total shipments reached some 21 million units. LGD’s share is estimated at 37 percent in the second quarter, based on that period’s total shipments of 32 million units. The company said it expects its tablet panel sales to increase in the third quarter by anywhere from 40 to 50 percent, which would mean a corresponding rise in LGD’s tablet panel revenue to between $850 million and $920 million.
Fab Conversion also Being Initiated, Could Help Meet Future Demand for Smartphone Displays
LGD also said during its results announcement it would move forward with a plan to partially convert its a-Si LCD fab into making LTPS LCD panels suitable for high-resolution, high-end displays more likely to be used in smartphones. LTPS LCD can also be used as backplanes for organic light-emitting diode (OLED) displays, and the company could have the option of adding its converted G6 LTPS line to active matrix organic light-emitting diode (AMOLED) capacity if it elects to do so.
The current conversion plan calls for keeping 60 percent of the G6 fab output still dedicated to making a-Si LCDs for tablets, mobile phones or other such applications. The remaining 40 percent of capacity, however, will now be devoted to producing the high-resolution LTPS LCD displays.
The conversion process will entail an 80 percent loss in yield as is inherent with the process. But despite the capacity loss, the G6 LTPS LCD line will give LGD access to a larger and more efficient LTPS fab in order to address the fast-growing, high-end smartphone panel market characterized by higher average selling prices. Apple and LG Electronics are currently LG Display’s main customers for smartphone display panels.
The G6 LTPS LCD line will also prove beneficial as Apple continues the evolution of the iPhone display, and as other smartphone original equipment manufacturers also keep improving the display resolution spec. Given current manufacturing and performance guidance, more than 60 million 4.1-inch LTPS LCD panels can be produced in a year from a G6 LTPS LCD fab.
All told, the LGD fab conversion move could prove prescient—especially since the company could be competing with Japan’s Sharp Corp. and Japan Display in supplying panels for the new iPhone. By initiating its fab conversion, LGD not only will be able to help support Apple, it will also allow the company to cater to the ever-growing panel needs of the smartphone market.
The conversion is expected to take place in stages over a yet unspecified number of quarters, but its effects will most likely be seen starting in the second half of 2013 at the earliest.
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