We manufacture TFT-LCD and OLED technology-based display panels in a broad
range of sizes and specifications primarily for use in televisions, notebook
computers, desktop monitors, tablet computers and mobile devices, including
smartphones, and we are one of the world’s leading suppliers of Ultra
HD television panels. We also manufacture display panels for industrial and
other applications, including entertainment systems, automotive displays, portable
navigation devices and medical diagnostic equipment.
We currently operate fabrication facilities, which include separately designated
sets of fabrication production lines housed in certain facilities, located in
our Display Clusters in Gumi and Paju, Korea and in Guangzhou, China. We also
currently operate module facilities located in China (Nanjing, Guangzhou and
Yantai), Korea (Gumi and Paju) and Poland (Wroclaw).
We seek to build our market position based on collaborative relationships with
our customers and suppliers, a focus on high-end differentiated specialty display
products and manufacturing productivity. Our end-brand customers include many
of the world’s leading manufacturers of televisions, notebook computers,
desktop monitors, tablet computers and mobile phones such as LG Electronics.
At the direction of our end-brand customers, we typically ship our display
panels to their original equipment manufacturers, known as “system integrators,”
who use our display panels in products they assemble on a contract basis for
our end-brand customers. Our sales are conducted through our multi-channel sales
and distribution network, including direct sales to end-brand customers and
their system integrators, sales through our overseas subsidiaries and sales
through our affiliated trading company, LG International, and its subsidiaries.
TFT-LCD Technology
A TFT-LCD panel consists of two thin glass substrates and polarizer films between
which a layer of liquid crystals is deposited and behind which a light source
called a backlight unit is mounted. The frontplane glass substrate is fitted
with a color filter, while the backplane glass substrate, also called a TFT
array, has many thin film transistors, or TFT, formed on its surface. The liquid
crystals are normally aligned to allow the polarized light from the backlight
unit to pass through the two glass panels. When voltage is applied to the transistors
on the TFT array, the liquid crystals change their alignment and alter the amount
of light that passes through them. Meanwhile, the color filter on the frontplane
glass substrate gives each pixel its own color. The combination of these pixels
in different colors and levels of brightness forms the image on the panel.
The process for manufacturing a TFT-LCD panel consists of four steps:
TFT array process – involves fabricating a large number of thin
film transistors on the backplane glass substrate. The number of transistors
corresponds to the number of pixels on the screen. The process is similar to
the process for manufacturing semiconductor chips, except that transistors are
fabricated on large glass substrates instead of silicon wafers. Unlike in the
semiconductor industry, however, the number of transistors per glass substrate
is not a primary driver of the manufacturing costs for TFT-LCDs. Once the TFT
array process on glass substrates is completed, the substrates are cut into
panel-sized pieces;
Color filter process – involves fabricating a large number of
color regions on the frontplane glass substrate that will overlay the TFT array
prior to the cell process. The colored dots of red, green and blue combine to
form various colors. The process is similar to the TFT array process but involves
depositing colored dyes instead of transistors;
Cell process – involves joining together the backplane glass
substrate that is arrayed with transistors and the frontplane glass substrate
that is patterned with a color filter. The space between the two glass substrates
is filled with liquid crystal materials. The resulting panel is called a cell;
and
Module assembly process – involves connecting additional components,
such as driver integrated circuits and backlight units, to the cell.
The TFT array, color filter and cell processes are capital-intensive and require
highly automated production equipment and are the primary determinants of fixed
manufacturing cost. In contrast, the module assembly process involves semi-automated
production equipment and manual labor to assemble the various components. Materials
are the primary drivers of variable manufacturing cost.
We manufacture display panels of various specifications that are integrated
by our customers into principally the following products:
• Televisions, which utilize large-sized display panels ranging from
18.5 inches to 105 inches in size, including Ultra HD television panels, which
have four times the number of pixels compared to conventional HD television
panels;
• Notebook computers, which utilize display panels ranging from 10.1
inches to 21.5 inches in size;
• Desktop monitors, which utilize large-sized display panels ranging
from 14 inches to 37.5 inches in size;
• Tablet computers, which utilize display panels ranging from 7 inches
to 12.9 inches in size; and
• Mobile and other applications, which utilize a wide array of display
panel sizes, including smartphones and other types of mobile phones and industrial
and other applications, including entertainment systems, automotive displays,
portable navigation devices and medical diagnostic equipment.
Unless otherwise specified, when we refer to panels in this annual report, we
mean assembled cells with added components, such as driver integrated circuits
and backlight units.
We design and manufacture our panels to meet the various size and performance
specifications of our customers, including specifications relating to thinness,
weight, resolution, color quality, power consumption, response times and viewing
angles. The specifications vary from product to product. For television panels,
a premium is placed on faster response times, wider viewing angles, higher resolution
and greater color fidelity. Notebook computer panels require an emphasis on
thinness, light weight and power efficiency, while desktop monitor panels demand
a greater focus on brightness, color brilliance and wide viewing angles. For
mobile panels, particularly smartphones, an emphasis is placed on brightness
and power efficiency.
1.44% 