HONG KONG (Yonhap News) ― Korea’s LG Display Co. will likely start building its 8.5 generation liquid crystal display plant in China next month, in a bid to garner a larger market share there, a source said Wednesday.

In December 2010, the world’s No. 2 maker of LCD panels obtained approval from the Chinese government to build an LCD factory in the southern city of Guangzhou.

The South Korean company, however, has been delaying breaking ground on its Guangzhou factory due to prolonged sluggish demand in the LCD industry.

The source said that the Chinese government approval for LG Display’s new factory is set to expire by the end of this year.

“The Chinese market is very important for LG Display,” said an industry expert, who asked for anonymity. “LG Display will need to show the commitment it has made to the Chinese government.”

He added LG Display is expected to move part of its 8.5-generation production facility in South Korea to Guangzhou.

“This will not only help control the overall volume of panel production, but also give LG Display room to launch the next generation production line for organic light emitting diode panels,” the expert said.

Market watchers say that the OLED display market is likely to be on an upward trend due to continued demand for smart devices like smartphones amid expectations that OLED displays would eventually replace LCD panels.

The OLED technology makes it possible to make thinner displays than LCD panels as it emits light directly, making backlight installation unnecessary.