If you are talking about LGD's 55" "screen equivalents" capacity, then the increase from 130K sheets per month to 160K sheets per month will bump capacity 20% from ~10m equivalent units to ~12m equivalent units.
If LGD doesn't start new capacity this year, then we'll likely see TV panel shipments max out at roughly 10m units until a printable technology comes along. That 30K extra Guangzhou sheets was always noted in the plans for that facility, and as you noted it seems to be moving forward as we speak. That much growth is a given, but the timing remains to be seen.
If they only mention the extra 30K sheets in July, I will be disappointed. I am looking forward to that call as I do see it as important as to the direction of large scale production ramp. I don't anticipate too many hints about the ramp at the Q1 call although they may confirm the 30k at that time. I would see that as welcome confirmation, but it is already "baked in."
Beyond the 30K, it makes sense to delay as long as possible before committing to specifics, but they have already made clear that the transfer and growth of OLEDs in the large are display ecosystem is a long-term plan. As they make the transition, they must balance:
- Maintaining their pricing power & margins as consumer acceptance and their customer base of OEMs grows. (If the Samsung reports are legit, that story is 100% complete.)
- Any conversion of LCD capacity is tricky considering the great profitability they are getting from those lines in light of the current pricing of LCD panels. (I think there are either 1 or 2 8G lines that could be converted rather than taking up space at Paju or squeezing more equipment into the current footprint.
- Waiting to see the developments and potential competition from the QD OLED tests at SDC as well as implementation of Mini LCD. If competing Premium TV technologies can aggressively undercut pricing within premium market, that could impact their growth plans. At this point as processes are refined, depreciation is moving forward and efficiencies are gained, that seems unlikely.
- Waiting for the holy grail of direct deposit to have a breakthrough moment.
I think that last bullet of direct deposit is too unlikely to derail implementation of a growth plan utilizing the current production methods, which is my point of disagreement with you.
Obviously time will tell, and I am looking forward to the July Q2 conference call by LGD.
Andy |
