LG Display Reports Operating Loss Exceeding 1 Trillion Won Last Year (Comprehensive)

LCD Panel Price Drop and Direct Hit from Chinese Offensive
Annual Deficit Reversal After 8 Years

[Asia Economy Reporter Dongwoo Lee] LG Display recorded an operating loss in the trillion-won range last year, turning to a deficit for the first time in eight years since the large-scale operating loss in 2011.

LG Display announced on the 31st that it posted an operating loss of 1.3594 trillion won on a consolidated basis last year. Sales decreased by 4% year-on-year to 23.4756 trillion won, and net loss for the year turned to a deficit of 2.8721 trillion won. Sales in the fourth quarter of last year were 6.4217 trillion won, down 8% from the same period last year, with an operating loss of 421.9 billion won.

It is analyzed that profitability deteriorated due to the continuous decline in liquid crystal display (LCD) panel prices last year and intensified competition from low-cost Chinese companies.

LG Display stated that the operating loss margin did not improve significantly compared to the previous quarter (436.7 billion won loss) due to increased fixed costs from the full-scale mass production of P-OLED (plastic OLED) products and losses during the LCD structural innovation process.

However, the industry expects the deficit to shrink from this year through improvements in supply and demand of medium-to-large LCDs and stabilization of the P-OLED business. LG Display also expects performance to improve as OLED sales increase from the second half of this year.

They believe that large panels will grow through OLED fab production in China, and stable operation of automotive products and smartphone shipments is possible. LG Display plans to ship around 6 million units from the Guangzhou fab this year.

In the fourth quarter of last year, mobile panels accounted for the largest share at 36% of total sales. TV panels accounted for 28%, notebook and tablet panels 20%, and monitor panels 16%. The unit price per area rose 18% quarter-on-quarter due to increased shipments of OLED TVs and P-OLED smartphones.

Reduction of LCD production will also be in full swing. Following the suspension of 8th-generation LCD fab production in the fourth quarter of last year, the company plans to halt all TV-related production by the end of this year.

During the earnings conference call, LG Display said, "Additional investment of 30,000 sheets is underway at the Guangzhou OLED fab in China," adding, "We will complete equipment setup by this year and expect to operate it in the first half of next year."

This content was produced with the assistance of AI translation services.