SEOUL — LG Display expects its next-generation TV technology to turn a profit next year as production costs fall and talks to supply Sony, Panasonic and Chinese set-makers continue.

Lower manufacturing costs will help reduce prices and end losses in the organic light-emitting diode (OLED), TV division by the fourth quarter, Mr David Choi, senior vice-president of its strategy marketing group, said in an interview without providing a specific forecast. The business lost about 550 billion won (S$670 million) last year, Hana Daetoo Securities estimates showed, with prices for a 55-inch set reaching US$10,000 (S$12,600).

LG Display, the second-largest maker of flat panels and a supplier to Apple, is counting on lower prices and deals with TV manufacturers to drive acceptance of OLED technology, which offers a brighter and sharper picture than liquid-crystal displays. LG Electronics, which owns 38 per cent of LG Display, is the biggest producer using OLED for TVs, while Samsung Electronics focuses on LCD technology for ultra-high-definition screens.

“The biggest challenge for OLED TV sales was the high price tag,” Mr Choi said. “Until now, the OLED TV price almost quadrupled that of the ultra-high-definition set, but it will only cost about double from as early as next month.”

LG Display, which has invested about 1 trillion won in OLED panels over the past two years and is the only producer, is already supplying new panels to Skyworth Digital Holdings, Sichuan Changhong Electric and Konka Group, he said. LG Electronics, Sony and Skyworth are among the top five TV makers by revenue, data compiled by Bloomberg showed.

The company will start mass production on a new line before the end of this year, Mr Choi said.

Earnings from OLED may reach 160 billion won next year, said Mr Nam Dae-jong, an analyst at Hana Daetoo. “The television market is on a downward trend and set-makers should either introduce new value-added products to boost profit or cut manufacturing costs. OLED technology is also superior to (that of) LCDs in design, so OLED will eventually and gradually replace LCD. It’s just a matter of time.”

LG Display posted net income of 258.3 billion won in the second quarter on sales of 5.98 trillion won, the company said in July. “OLED technology is not intended for replacing the current LCD technology,” Mr Choi said. “We expect the OLED technology to create a new top-notch segment in the overall display market.” BLOOMBERG