LG Display launches 5.1 billion OLED investment, which companies will benefit?

LG Display held a board of directors meeting on April 22 and approved an investment of 1.1 trillion won (approximately RMB 5.148 billion) for the construction of new OLED technology infrastructure, with the investment period from 2026 to June 2028. The outside world is paying increasing attention to the small and medium-sized cooperative enterprises that may be involved in this investment.

Image source: Compiled by LG Display

The focus of this investment is not only to expand production capacity, but also to promote the technological development of the entire OLED process and build a stable supply chain. Especially at a time when OLED applications are expanding from TVs to IT equipment (laptops and tablets) and automotive displays, this investment is seen as a strategic response to structural changes in the display industry, rather than a simple factory expansion.

In addition, starting from Samsung Display’s 8.6-generation IT OLED investment, global OLED manufacturers such as BOE, TCL CSOT, and Visionox have also successively increased infrastructure construction. Analysts believe that this will bring structural benefits to the entire industry chain such as related equipment and materials.

The market expects that LG Display’s infrastructure investment will have a chain reaction on second- and third-tier suppliers, covering all aspects of equipment, components, and materials. Among them, companies such as Avaco, Toprun Total Solution and P&H Tech are considered potential beneficiaries of the OLED boom.

According to reports, Avaco is a leading equipment manufacturer in China and can comprehensively supply OLED front-end process and logistics equipment, including evaporation, transmission and packaging equipment. In particular, the OLED online vacuum transfer system and evaporation-related equipment are considered necessary facilities for the expansion of large, medium and small-sized OLED production lines.

Recently, Avaco has further expanded its global business by signing supply contracts for OLED mass production evaporation systems with China's BOE. According to assessments, as BOE increases its investment in the 8.6-generation OLED production line, the profit prospects of the evaporation equipment industry will become clearer. In addition, in TCL China Star Optoelectronics' next-generation IT investment in 8.6-generation OLED, Avaco has also won orders with OLED core equipment such as low-damage sputtering equipment and chuck/mask return systems, and its equipment competitiveness has attracted much attention. It is also expected to be able to cope with new investment cycles from other global panel manufacturers in the future.

Low-damage sputtering equipment plays a vital role in ensuring film uniformity and improving process stability, and is the key to achieving high-resolution OLED panels. In addition, the chuck/mask return system can safely transport deposition chucks and masks, helping to ensure OLED production yield and efficiency.

As a display and automotive parts company, Toprun Total Solution has been actively expanding its business portfolio since its listing in South Korea in November 2024. The company is no longer limited to a business structure centered on automotive displays, backlight units (BLU), and mechanical and packaging components for televisions, and has recently included the field of OLED materials and equipment as a new growth engine. After the company went public, it actively expanded its position in the OLED value chain through acquisitions and other methods.

Toprun AP Solution is the equipment business subsidiary of Toprun Total Solution, focusing on OLED inspection and optical compensation equipment. The company has completed LG Display’s equipment supplier registration and received orders for OLED optical compensation equipment and carrier board fixtures. In the OLED manufacturing process, detection and compensation equipment are regarded as key equipment that determines panel image uniformity and process stability. As the proportion of large-area, high-resolution OLEDs and OLEDs used in IT and automotive applications continues to expand in the future, the demand for high-precision detection and compensation equipment is expected to continue to grow.

Last year, the company acquired OLED material manufacturing company Jinwoong Industry (now Top Run Material Solution) and officially entered the materials business. Its main product is CGL (charge generation layer), which is a necessary core interlayer material in the Tandem OLED structure. This material is competitive in terms of life, brightness, and reliability, and has been used in IT equipment and automotive OLEDs. Industry reviews say that its application scope is expected to expand to smartphones, wearable devices and other fields in the future.

Toprun Total Solution is transforming into a comprehensive enterprise integrating materials, components and equipment by building a vertically integrated structure covering OLED materials, components and equipment. This strategy is highly consistent with the OLED process advancement strategy that LG Display is promoting, and is considered a key factor that can enhance the technological importance of partner companies. It is particularly worth noting that the number of companies currently possessing both core OLED materials and process stabilization equipment is limited. Therefore, Toprun Total Solution is expected to contribute to LG Display's profitability in the mid- to long-term OLED investment cycle.

P&H Tech is a professional materials company that supplies key OLED materials, including high refractive index CPL (covering layer), HTL and EBL materials, and palladium catalysts. Among them, CPL is the key material that determines the luminous efficiency and lifespan of OLED, and it belongs to a field with high technical threshold. The company's major customers include LG Display and global materials giant DuPont, and its business structure is designed to directly benefit from the rapid development trend of OLED in IT and automotive applications.