LG Display is investing $1.75 billion (around £1.3 billion) in flexible OLED displays.
It's making the investment following growing demand from mobile device manufacturers for flexible displays, which can be curved or folded, reports Reuters.
OLED is expected to replace liquid crystal displays (LCD) for smartphones as the standard technology in a few years.
LG - which already makes OLED screens for curved TVs - says it is building a new production line for small-to-medium sized flexible OLED screens in South Korea.
"A paradigm shift to OLED represents both a challenge and an opportunity for the display industry," LG Display chief executive Han Sang-beom said in a statement.
While curved monitors and TVs have increased in prominence in recent years, flexible smartphones and folding tablets have not yet hit the mainstream.
The likes of Lenovo and Samsung are working on foldable tablet concept devices.