South Korea’s LG Display, a supplier of display panels for Apple, has secured approval to invest another US$1.4 billion in its Vietnam factory, bringing the total investment in the facility to US$4.65 billion.

The additional capital was approved on August 31, or four days after the local administration received the application. The plant remains the largest foreign-invested project in terms of capital in the northern port city of Hai Phong, about two hours’ drive from Hanoi.

The latest investment will boost the company’s OLED display output at the factory to 13 million to 14 million units per month, from the current 9.6 million to 10 million, according to the company. The expansion will increase the production of both large panels for TVs and smaller ones for phones and car displays. 

LG Display Vietnam expects to create an additional US$6.5 billion a year in export revenue, generate 10,000 new jobs, and contribute to the state coffers a further US$25 million a year.

Challenging Samsung

The project was first approved in April 2016 with US$1.5 billion investment, manufacturing organic light-emitting diode (OLED) and liquid-crystal display (LCD) panels, which are used for TVs, monitors and smartphones. To date, LG Display has increased its investment in the project four times, including a US$750 million increase in February this year to expand the production lines at the plant in Trang Due Industrial Park. The industrial zone is also home to other projects such as LG Electronics Vietnam Hai Phong and LG Innotek Hai Phong.

The expansion is in line with the rapid growth of the global OLED market. Market researcher Omdia forecasts that this year’s shipments of OLED TVs will reach 6.1 million units, up 70% from 2020.

It is also poised to further challenge LG’s South Korean peer Samsung in manufacturing dominance in Vietnam.

From Seoul, Samsung Group announced on August 24 that it would invest 240 trillion won (US$206 billion) in the next three years to expand its footprint in biopharmaceuticals, artificial intelligence, semiconductors and robotics in the post-pandemic era.

Growth opportunities

The mammoth investment, which will be led by Samsung Electronics and Samsung Biologics, is aimed at strengthening the group's global standing in key industries such as chip-making while allowing it to seek growth opportunities in new areas such as robotics and next-generation telecommunications.

The announcement did not mention plans for Samsung’s Vietnam businesses and operations, which include Samsung Electronics Vietnam.

Samsung is operating a smart TV and household appliances factory at the Saigon Hi-Tech Park in Ho Chi Minh City, which has been facing consecutive lockdown orders due to rising Covid-19 cases in the key southern economic region. The strict lockdowns have partially disrupted global supply chains.

Its smartphone manufacturing facilities are unaffected at the moment as the two factories are situated in the northern provinces of Bac Ninh and Thai Nguyen. Samsung says the two facilities are the group’s largest smartphone facilities globally.

In Vietnam, Samsung is the largest foreign investing company, with about US$17.3 billion in combined registered capital. Samsung Vietnam president Choi Joo Ho says the group’s top priority in Vietnam is to effectively disburse its capital commitments before coming up with new investments. The group will continue to stabilize its established system in Vietnam, enhancing productivity and quality, he adds.