LG Display, an LG Electronics Inc. member, is set to expand its Vietnamese plant's OLED module lines with fresh funding worth $1 billion it has just secured from global banks.
The lenders include ANZ, HSBC, Citibank, and CaixaBank of Spain, while payment guarantee is provided by South Korea's state-run Export-Import Bank and Korea Trade Insurance Corp.
The new capital will be used to expand LG Display’s presence in the global small- and medium-sized organic light-emitting diode (OLED) panel market.
Though it is an undisputed number one player in the large OLED panel market, LG Display has a share of about 12% in the market of small and medium-sized OLED panels, much smaller than Samsung Display's 73%, according to market tracker Omdia. Almost 90% of the global smaller OLED market is dominated by Korean players, Omdia data shows.
Last year, LG Display decided to make a massive investment in its Paju plant in Gyeonggi province, Korea and in its Vietnamese plant in Hai Phong - about two hours’ drive east of Hanoi - to increase its competitiveness in the small- and medium-sized OLED panel market.
Korean giant LG Group selected Hai Phong as its strategic spot in the Southeast Asian country, one of the world’s fastest-growing economies. The major industrial and port city is home to three companies under the LG roof. One of them, LG Display Vietnam Hai Phong, manufactures LCD and OLED panels. The major facility received an additional $1.4 billion investment last August, bringing the total capital for the facility to $4.65 billion, after $750 million was added last February.
As for the two others, LG Electronics Vietnam Hai Phong focuses on electronics, and LG Innotek Vietnam Hai Phong supplies electronic components.
Both Samsung and LG are investing heavily in their display business to widen the gap with their competitors. Samsung received a license from Ho Chi Minh City’s Saigon Hi-Tech Park on June 27 to add $841 million to the investment capital of Samsung Electronics HCMC CE Complex. The Samsung Vietnam facility, with $2.841 billion in its latest total investment, makes TV screens and home electronics.
Vietnam has become a production base for global electronics makers like Intel, Samsung, LG, Foxconn, Goertek, Luxshare, Winston, Pegatron, Compal, and BYD.
Notably, Chinese company BYD has started assembling Apple tablets in the country. This means for the first time, Apple has moved some iPad production out of China, shifting operations to Vietnam after strict Covid-19 lockdowns led to months of supply chain disruptions.