LG Display, suffering from poor performance, is tightening the reins in their management to escape from crisis. They are struggling to make a breakthrough with new businesses such as high value-added organic light emitting diodes (OLED) where the global IT industry is in the 'demand cliff' situation.
According to the industry on the 18th, LG Display has effectively switched to an emergency management system and started to cut costs, strengthen inventory management, and discover new businesses.
According to the guideline of the security corporations, LG Display's expected sales and operating loss in the 3rd quarter are estimated to be around 6.3 trillion KRW and 400 billion KRW, respectively. Their slump was more noticeable from the slowdown in global TV demand and price increase of liquid crystal display (LCD).
LG Display is now focusing on their management to reduce costs and create breakthroughs in new businesses, such as reducing marketing and avoiding unnecessary business trips.
A conservative emergency management system is expected to be maintained until the first half of next year. It is expected to set a target for display shipments at the level of the previous year or slightly increased.
The industry is predicting that the TV market recession will gradually improve from the second half of next year, but the improvement is not likely to be easy.
LG Display OLED panel negotiation with Samsung Electronics is also found to be at a standstill.
They will also control the pace of investment. LG Display announced in August last year that they would invest 3.3 trillion KRW in new facilities for small and medium-sized OLEDs by 2024. They also invested in OLED tablet PC displays. A key customer is expected to release the first tablet PC equipped with an OLED display by 2024. According to the equipment industry, LG Display is considering additional investments, but it is understood that the final decision is delayed.
They are also supporting the expansion of new business. LG Display is developing transparent and gaming OLED as a new growth engine. It is a strategy to further diversify their business portfolio based on advanced OLED technology, following the manufacturing of display panels used in traditional industries such as TV, IT, and smartphones.
Transparent OLED, which was successfully commercialized in 2019, is expanding its application fields to mobility, architectural interiors, and others following signage.
The transparent OLED market is also growing rapidly. According to data from Boston Consulting Group (BCG), a global strategic consulting firm, the global transparent OLED market is doubling every year. It is expected to increase from 100 billion KRW this year to 3 trillion KRW by 2025 and 12 trillion KRW by 2030.
In the gaming OLED field, LG Display is developing high-performance gaming-specific OLED panels by reflecting various user requirements by genre including bendable OLED. In the future, they are planning to launch products in collaboration with global gaming brands.
By Staff Reporter So-ra Park (srpark@etnews.com)