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Google flexes its wallet, offers LG Display millions to make screens for Pixel 2

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Google has proposed an investment of at least $880 million in LG Display, in return for it building flexible OLED screens for a future Pixel smartphone, according to anonymous individuals speaking to local news source ETNews. Neither company have officially commented on the story, but the sources say LG Display is examining the offer, which may end up being higher than the initial figure quoted in the report, if supplies demand it.

The investment from Google would enable LG Display to stabilize production of OLED screens, which are currently in short supply, and meet the numbers required by Google for a new Pixel phone. No specifications of the screen have been discussed, and although the panels are referred to as “flexible,” this doesn’t mean the entire device will be flexible. The panel inside the Galaxy S8 is flexible, enabling the curve at the sides, for example.

In a regulatory filing for the Korean stock exchange, LG confirmed that it received offers of investment for its OLED display business, but stopped short of naming Google as one of the potential investors.

Nothing has been decided on the issueIt is true that a growing number of clients are showing interest in flexible OLED with the market’s expansion recently,” LG said in the filing. 

Sources told The Investor that Google and LG have been in talks for two years over a potential investment, but that Google “has recently become more flexible to rush the panel production.”

LG Display has two production lines primed for its sixth-generation OLED screens already. The first, named E5, is expected to begin operating after the summer this year, and the second, named E6, in 2018. Google’s investment will be used to increase capacity, and to give the company priority access to the panels being produced, it’s speculated.

Google’s Pixel and Pixel XL phones, which were announced in late 2016 and built by HTC, have 5- and 5.5-inch OLED screens. Rumors have been spreading about the Pixel’s successors, which are expected to launch in late 2017, although leaks have revealed very little about them so far. Demand for the original Pixel has often outstripped supply, a situation Google will want to avoid for the sequels, and securing a steady stream of OLED screens would help immensely.

Demand for OLED and AMOLED screens isn’t going to slow down in 2017. Apple has long been rumored to be securing OLED panels for the next iPhone, or at least the special edition iPhone X model, and may have already struck a deal with Samsung to supply more than 70 million such screens.

Article originally published on 04-10-2017. Updated on 04-12-2017 by Kyle Wiggers: Added official statement from LG.  

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