South Korea’s LG Display Co. has been cleared by the Chinese government to create a joint-venture manufacturing facility on organic light-emitting diode (OLED) panels, cementing its leadership in TV display in both capacity and technology.

The Korean panel maker said Tuesday it would own the majority 70 percent stake in the entity based on initial capital of 2.6 trillion won ($2.32 billion), with Guangzhou Development District to hold the remaining 30 percent.

The total investment amount is estimated at 5 trillion won. The 8.5 generation OLED production line is slated to become operational in the latter half of 2019.

LG Display announced the joint venture plan in July 2017 and received a green light from Korea’s trade ministry this January before getting the final nod from the Chinese government.

The new Guangzhou plant would focus on producing OLED panels for large-screen TVs. The company will start producing 60,000 input sheets per month and gradually ramp up production to 90,000. When combined with the monthly turnout of 70,000 sheets from its Korean plants in Paju, the world’s biggest OLED TV screen maker will be able to supply more than 100,000 panels from the latter half of 2019.

“We welcome the Chinese government’s decision and will work hard to complete the plant ahead of schedule to get our displays on the market as soon as possible,” said a LG Display official.

LG Display still generates 90 percent of its sales from LCD panels. It posted an operating loss of 98.3 billion won in the first three months of this year, its first loss since the first quarter of 2012, due to stiff competition from government-backed Chinese rivals that have pumped up supply and driven down prices.

Earlier this year, the company vowed to invest 20 trillion won by 2020 to make the more lucrative OLED its mainstay turnout.

LG Display holds a dominant 70 percent share in the OLED TV market, while its local rival Samsung Display commands a 89 percent share in the smaller OLED panel market for smartphones and others. LG holds a 9.5 percent share in that segment but could receive a further boost as there are reports that it is being tapped as the second OLED provider together with Samsung Display for the next Apple phone.

Shares of LG Display closed Wednesday up 0.51 percent at 19,700 won.

By Chun Gyung-woon and Kim Hyo-jin

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