"Planning to Withdraw Business"... Display Industry Continues Production Due to LCD Price

[Asia Economy Reporter Jeong Hyunjin] Domestic display companies are continuously postponing the cessation of LCD production. Although they had called for business withdrawal earlier due to deteriorating profitability, the rapid price surge of LCD panels triggered by the COVID-19 pandemic shows no signs of abating, forcing them to continue operations for the time being.

According to the industry on the 30th, Choi Joo-sun, CEO of Samsung Display, recently informed employees via email that "the company is considering extending LCD panel production until the end of next year." Samsung Display had planned to halt LCD panel production last year. Considering this, the plan has been extended by two more years. Samsung Display is maintaining the L8-2 line at its Asan Campus in Chungnam, converting the L7-1 line into an OLED production line, proceeding with equipment sales for the L7-2 line, and partially converting the L8-1 line into a QD display production base.

Samsung Display's decision to withdraw from the LCD business was based on deteriorating profitability and a strategic shift toward QD displays. Profitability had significantly worsened as Chinese display companies entered the market en masse several years ago, launching a volume offensive. However, with the outbreak of COVID-19, sales of electronic devices increased, expanding demand for LCD panels, and Chinese companies adjusted supply, causing LCD panel prices to rise rapidly.

According to market research firm Display Supply Chain Consultants (DSCC), LCD panel prices rose sharply in the first quarter. Prices for 32-65 inch LCD panels increased by 12-18%, and 75-inch panels rose by 8%. On the 19th, DSCC revised its previous forecast that the price increase would slow from the second quarter, now expecting a 17% rise in the second quarter of this year as well, and predicted that prices will peak in the third quarter.

LG Display is in a similar situation. LG Display had planned to withdraw from the domestic TV LCD business last year but has continued production to date. While it is not injecting additional capital, it has not disclosed an exact end date. The market views that the rapidly growing large OLED panel market, where LG Display holds strengths, along with rising LCD panel prices, is positively impacting its performance.

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