LG Display Projects 3D TV Global Sales of 30 Million Units

Global sales of 3D TVs will hit 30 million units this year, driven by the arrival of models featuring LG Displays’ film patterned retarded (FPR) technology that can be paired with passive polarized glasses, LG executives said Friday in a conference call.

LG is applying FPR to 26-, 32-, 37-, 42-, 47-, and 55-inch LCDs that are expected to find their way into TVs marketed by LG Electronics, Philips, Toshiba and Vizio, company executives have said. LG Display is halting production of active-shutter 3D LCDs by mid-year and expects FPR-equipped models to account for 15 percent of the company’s unit sales and 20 to 25 percent of its dollar sales this year, said Anthony Moon, vice president of investor relations. Unlike time multiplexing used in shutter glasses, the entire frame time generates a single frame, so lower liquid crystal images don’t produce ghosting or double images. But in first-generation FPR panels, 3D images appear at half-HD resolution, with 540 lines delivered to each eye. LG is developing a version of the technology that will deliver 1080 lines, sources close to the company have said.

LG Displays’ forecast for global 3D TV sales is well above most industry estimates of 15 to 20 million units. While LG Display still needs to improve yields of FPR-equipped panels across its 8th-generation LCD lines, “it is coming along very well and we are very confident we will be able to meet our targets,” Moon said.

FPR panels will initially be sold at a premium for mid- to high-end TVs and will “improve our overall profitability” this year, Moon said. Unlike active-shutter technology, which has been limited to 240 and 480 Hz panels, FPR also delivers 3D with 120 Hz and 60 Hz LCDs and “can do the whole gamut of the product segment,” Moon said.

LG Display also was bullish on its business supplying LCDs for tablets. LG is targeting shipping 50 to 60 million, 7- to 10.4-inch displays for tablet PCs, which will sell about 80 million units globally this year, a company executive said. LG is among the major suppliers for Apple’s iPad tablet PCs, which use a 9.7-inch panel.

The growth in TVs -- LG is forecasting a 13 to 14 percent increase in sales this year -- will be surpassed by a 15 to 17 percent expansion of production capacity, opening the possibility of an oversupply this year, industry officials said. The gap between supply and demand is small enough that it isn’t likely to have a major impact on the market, said Avian Securities analyst Andrew Abrams, who’s targeting 10.5 to 11 percent growth and 16 percent capacity expansion. Oversupply becomes an issue when there is more than a 10 percent gap between supply and demand, he said.

LG projected $4.49 billion in capital spending this year, including the start of a third 8G line in Q1 with maximum monthly capacity for 68,000 glass sheets. LG also in planning to add another 7G plant with monthly capacity for 60,000 sheets as soon as early Q4, depending on demand. The new 8G and 7G lines will consume 56 percent of the capital budget, company officials said.

Another 16 percent of capital spending will be for OLEDs including production along an existing 4.5G line and a 5.5G facility that’s expect to start installing equipment in 2012. The 4.5G line started production early this year with monthly capacity of 4,000 substrates and will grow to 12,000 by year-end, LG executives said. While initial OLED manufacturing will be aimed at smartphones, TV panels will become a factor in 2013, company officials said. LG expects to start producing 42- and 55-inch OLED TV panels in 2012 along the 4.5G line (CED Jan 6 p1), company officials have said. Among potential customers for LG’s OLED is Nokia, which is planning to build a display into its N8 and N7 series smartphones, according to news reports in South Korea.

Meanwhile, the industry is working off a slight oversupply of LED-equipped TVs that occurred when holiday sales fell short of projections, Moon said. While overall TV inventory was “in line” at year-end, the supply LED-based sets was one to two weeks beyond “normal levels,” Moon said. The inventory consisted of older models, much of which will be sold during the upcoming Chinese New Year sales, clearing the way for the arrival of new sets in March and April, he said. TV panel prices fell 10 percent in Q4, but are expected to “stabilize” in Q1, Moon said.

While “there are still old (LED) models that need to be cleared,” there will be “stability and recovery” starting in March, Moon said. Chinese retailers will start restocking in March for May Day sales, he said. LG Display’s shipments will decline in the high single digits from 792 million square meters of net display area in Q4, the company said. In a potential cost-saving measure, LG is shifting its LCDs to a “two bar” LED design from four, company officials said. The new models will require more powerful, but potentially fewer LEDs, industry officials said. LED-equipped LCDs accounted for 35 percent of LG’s Q4 shipments and will hit 50 percent by year-end, LG officials said.

LG Display swung to a $240.5 million Q4 net loss from a $450.5 million profit a year earlier. The net loss included a $164 million payment to the European Commission to settle a price-fixing investigation. Q4 revenue rose to $5.81 billion from $5.3 billion a year earlier, but was down from $6 billion in the previous quarter.

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As LG Display launches full production of its FPR panels, Samsung is exploring advanced active shutter technology, a Samsung spokesman said. At CES, Samsung’s LCD operations demonstrated passive RDZ 3D technology with RealD in an offsite suite. The companies showed RDZ technology in 46- and 23-inch TV and PC monitor panels and a notebook PC, a RealD spokesman said. RDZ provides for full HD 3D video compatible with the same glasses used in RealD 3D-equipped move theaters, the spokesman said. The RDZ displays also are 2D-compatible with no lessening of image quality in the 2D mode, he said. “Unlinked patterned retarder-based 3D display technologies that cut resolution in half or diminish brightness, RDZ 3D display technology delivers full-resolution HD 3D images by adopting active shutter technology on the display,” RealD said in a statement. Samsung is developing prototype displays using the advanced active shutter technology, but doesn’t have “specific plans” for introducing them, said Scott Birnbaum, vice president of Samsung’s LCD business. Samsung also is exploring “development alternatives” with RealD for the RDZ technology, Birnbaum said.