LG Innotek inaugurated Paju LED Plant, which will become a core global hub of its LED business, which the high-tech electronics part maker is aggressively cultivating as a future engine of growth.
LG Innotek held an inaugural ceremony of the new plant at the Wollong High-tech Materials Complex in Paju, Gyeonggi Province on October 27.
In attendance at the ceremony were more than 300 people, including central and local government officials such as Minister Kyung-Hwan, Choi of Ministry of Knowledge Economy, Governor Kim Moon-soo of Gyeonggi Province, Mayor Lee In-jae of Paju-si; executives and officials from LG and subcontractors, such as Chairman and CEO Koo Bon-moo of LG, Vice Chairman Koo Bon-jun of LG Electronics, Vice-Chairman & CEO Kim Bahn-suk of LG Chem, CEO Lee Sang-chul of LG U+ and CEO Hur Young-ho of LG Innotek.
With the completion of Paju LED Plant, LG Innotek has established the world’s largest integrated LED production system, which encompasses the comprehensive LED production processes, including Epi-wafer chips, packages and modules.
LG Innotek broke the ground to build the Paju LED Plant in September 2009, and invested combined 1 trillion won to build the plant. If investment is continued as planned in the future, the plant is expected to create more than 4,000 jobs and induce trickle-down production worth over 5 trillion won by 2012, thus making important contributions to galvanizing the national economy.
In his commemorative speech at the ceremony, LG Innotek President Young Ho, Hur said, “Our company has been steadfastly cultivating LED into a new growth engine business that will spearhead our future through constant investment and research and development drive over the past 10 years,” adding, “By solidifying our posture as global No. 1 company, we will attain 10 trillion won in sales in 2015, and take leap forward to become the world’s No. 5 global specialized maker of electronic parts.”
■ Completes vertical integration of comprehensive LED production processes, encompassing Epi-wafer to modules
LG Innotek’s Paju LED Plant has been constructed at 182,000 sq. meter land, which is equivalent to the size of 26 soccer grounds combined, and will have more than 3,000 staff members.
The LED production building is a three-story facility with a combined floor space of 58,000 sq. meters. It has completed a system for the comprehensive LED production processes, including Epi-growth, which is a core processing in early phase of production, and production of chips, packages and modules.
LED chip rolled out at the plant amounts to 1.8 billion units per month, which is the world’s largest in volume produced at a single plant.
The LED production building has been equipped with production lines for 6-inch, large-diameter, Epi-wafers for the first time in the world, and production lines of vertical-type LED chips boasting the highest level of efficiency in the world, and thus constitutes optimal lines for production of LED backlight unit (BLU) for LCD TVs, and LED for lighting.
LG Innotek aims to secure 10 percent share of the world LED market in 2012, and thus emerge as a global top-tier player in the LED business, a key future growth business.
■ Plant expected to spawn economic ripple effect, including job creation, co-growth with subcontractors and partners
LG Innotek is pushing for a strategy to create new jobs and contribute to co-growth with small and medium-sized subcontractors and partners through aggressive preemptive investment entailing 1 trillion won in the construction of the Paju LED Plant, and thus to gain the upper hand a future growth business.
① To create over 4,000 new jobs, to spawn trickle-down production worth 5 trillion won by 2012
For starters, LG Innotek projects the new LED Plant will create more than 2,000 jobs in the first year of operation this year, and more than 4,000 jobs by 2012, while inducing trickle-down production worth 5 trillion won.
Also, with the inauguration of the plant, LG Innotek plans to contribute sales growth of small and medium-sized subcontractors, and increase the ratio of domestic equipment production, which currently stands at about 80 percent through joint development of core LED production equipment and parts, thus taking the lead in pursuing co-growth.
② To contribute to reinforcing national competitiveness in core parts and materials industry of the future
The Paju LED Plant is also expected to make major contributions to enhancing Korea’s competitiveness in the core parts and materials industry of the future.
The early phase of producing LED Epi-wafers and chips constitute a stage that most heavily affects the quality of products, including brightness of light and color tones of LED products. Thus far, Nichia of Japan and Cree of the U.S. have been leading the global market in the area.
In this regard, as LG Innotek starts mass production of six-inch large-diameter Edi wafers for the first time in the world, and vertical-type LED chips boasting the highest level of efficiency in the world, the company is expected over the long term to increase the competitiveness of not only Korea’s parts and materials industry but also display and lighting industries, to which LEDs are supplied.
A six-inch Edi wafer increases the surface size by nine folds from the conventional two-inch wafers, and reduces the size of unused edge sections on the wafer. Thus, the number of usable chips that are created from a sheet of Epi-wafer effectively increases by more than 10 times, thus leading to expanded production capacity and an over 30 percent-reduction in production cost.
Additionally, high-efficiency vertical LED chips boast superior heat conductivity and reflection, when compared with conventional horizontal-type LED chips, and present higher lighting efficiency, thus are capable of generating a higher level of illumination with fewer chips. Hence, they are highly sought after as device of choice for lightings and TV BLU, which require ample volumes of lighting. LG Innotek started mass production of vertical-type LED chips for the first time in Korea last year, and currently sustains the highest level of yield in the world.
③ Establishes integrated production system, ranging from R&D, to production and to marketing
Apart from the construction of the Paju LED Plant, LG Innotek has invested 300 billion won in the expansion of LED Epi-wafer and chip production lines at its Gwangju Plant, as it is aggressively pushing to cultivate LED as its representative new growth engine.
Also, as LG Innotek moved its LED research center and LED lighting business unit (BU) from Anyang to Paju last July, the company has secured capacity to conduct LED business in an efficiency fashion through the integration of planning, R&D, production and marketing.
As a result, the Paju LED research center preemptively acquires core technologies, while the Paju Plant and Gwangju Plant engage in close collaboration, which allows LG Innotek to produce LED Epi-wafers and chips stably and efficiently.
Furthermore, by producing packages, BLU and lighting modules at the Paju Plant and supplying them to global companies, LG Innotek has established an integrated LED production system encompassing R&D, production and marketing.
An LG official said, “The LED industry suffered a temporary setback recently due to sluggish TV market stemming from the global economic recession. But according to major surveys, including those by Display Research, the LED sector will expand to a 22 trillion won market around the year 2012,” adding, “The inaugural ceremony of the Paju Plant has been held as an internal event in a subdued manner with the view to making preparations for the future to assure mid- to long-term growth, rather than seeking near-term expansion.”
※ Glossaries
• Epi-growth: The process for producing Epi-wafers, whose semiconductor compound layers, including electrode layers and lighting layers, are grown through MOCVD (Metal-Organic chemical vapor deposition) on sapphire wafers, the basic material
• Chip: A product produced in the form of individual chips by processing an Epi-wafer into a thin chip after forming anodes, cathodes and patterns on the Epi-wafer, and then cutting it into chips.
• Package: An individual LED product produced by inserting the LED chip into a specially created case, then connecting electrodes and injecting fluorescent substance into it, so as to materialize the required colors, maximize the volume of emitted light, and protect LED from external environment.
• Module: A half-assembled product produced by assembling the LED package with other related parts and components into a certain format, so that it can be applied to complete commercial products, including LED TVs and lighting devices
• BLU, or Back Light Unit: A module that beams light from behind or side of the display panel, so that video images can be screen on the display device that applies LCD panels, including computer monitors and TV sets.
