LCD display panel makers like samsung and LGD are expected to turn a profit from 2020. Analysts at KB Securities, a south Korean brokerage, pointed out that Korean display makers are expected to start returning to profit from 2020, as LCD display panel prices have rebounded and OLED display capacity has expanded.
LGD and samsung display, two of South Korea's leading display makers, have also reported disappointing results in 2019 as weak demand in the display panel market and oversupply have led to falling prices.
LGD posted an operating loss of 937 billion won ($799 million) in the first three quarters of 2019, while samsung display's operating profit fell 17 percent to 1.36 trillion won a year. The biggest loss was at LGD, which generates about 80 per cent of its sales from the LCD display business.
Korean display panel makers are trying to boost prices by adjusting inventory levels and planning to cut supply, while analysts at Korean brokerages said LCD panel prices could rebound in the first quarter of this year, with LG and samsung's LCD display businesses poised to recover.
"LCD display panel prices are likely to start rebounding from 32-inch, 55-inch and 65-inch products and are expected to be 15 to 20 percent higher than current levels in 2020," Kim dong-won, an analyst at KB Securities, said in a note.
Korean display panel makers are planning to switch to oleds amid a saturated LCD display panel market and growing demand for OLED display panel products, market watchers said. Samsung and LG continue to invest heavily to increase their OLED display panel production capacity.
Soh hyun-chul, a researcher at Shinhan Investment Corp., agreed that OLED display panel would be one way for Korean display panel makers to continue to survive in the display panel market.
Samsung display panel is expected to set up production lines for small and medium-sized flexible OLED and quantum dot (qd-oled) displays at its new asan plant in 2020.
Samsung announced in October of 2019 that it would invest 13 trillion won in QD display production, of which 10 trillion won would be used for related facilities and 3 trillion won for research and development.
The market is also predicting that samsung will benefit significantly from the growth in demand for 5G smartphones from 2020. "Demand for OLED display panels for smartphones is expected to grow 30.5 percent annually to 620 million panels this year, and samsung display's operating profit is expected to grow 42.3 percent annually to 3.3 trillion won," Soh hyun-chul said.
Meanwhile, LGD also expects the guangzhou plant to be fully operational from 2020, which, according to market analysis, could increase its OLED display panel productivity by more than 70%.
Sunhan finance researcher Soh hyun-chul added that LGD's OLED TV sales are expected to grow by more than 50 per cent this year, with display panel makers expected to turn a profit and achieve an operating profit of won 605.7bn