Intends to Enhance Competitiveness through Differentiation
LG Display announced in a conference call on July 28 that it will continue its LCD business.
Since Chung Ho-young took office as president in 2019, LG Display has sought to overhaul its LCD business as LCD panel prices fell steeply due to an oversupply by Chinese companies. The company leaned towards suspending production of LCD panels for TVs in 2020 but set aside the idea as LCD panel prices began to soar.
LG Display is planning to boost the competitiveness of its LCD business by differentiating its LCD panel products instead of putting an end to it. Specifically, the company has already converted part of the production lines for TV panels to those for LCDs for IT devices and will continue such conversion in the future. It will also reduce production of LCD TV panels by half and focus on more profitable commercial and large-sized products. LCD TV panels account for about 15 percent of the company’s total sales income.
Regarding concerns about a drop in LCD TV panels, LG Display said it is planning to secure stability and mid- to long-term profitability by flexibly running Paju P7 in Korea and Guangzhou fab in China. "We have not posted a loss in the LCD panel business when LCD panels for IT devices are included," an LG Display official said
LG Display performed strongly in the second quarter on the back of a boom in the display industry. It reported 701.1 billion won in operating profit in the second quarter of 2021, turning to a surplus. Sales rose 31.3 percent from 2020 to reach 6.96 trillion won, surpassing market expectations.
Analysts are predicting that its third-quarter performance will improve further. They forecast that its large OLED panel business will record a surplus for the first time and its OLED panel shipments will climb in all business sectors such as TVs, IT devices, and mobile devices.