LGD, Large OLED Panel Business Nears Profitability After 8 Years

LGD Large OLED Panel Business Expected to Turn Profitable in Q3
Production Capacity Secured by Expansion of Chinese Factory and Surging OLED TV Demand

[Asia Economy Reporter Suyeon Woo] LG Display, the only company in the world producing large OLED panels for TVs, is on the verge of turning its large OLED panel business profitable after 8 years of operation. With the expansion of production capacity through the Guangzhou plant line in China this year, LG Display is expected to achieve a quantum jump, powered by the dual engines of ‘rising LCD prices’ and the ‘mainstreaming of OLED.’

According to the financial investment industry on the 16th, LG Display is expected to achieve profitability in its large OLED panel business division as early as the third quarter of this year. The operating loss of the large OLED business division in the first quarter was reported to be around 100 billion KRW, and it is expected to gradually approach the break-even point from the second quarter and achieve profitability from the third quarter.

This is thanks to securing production capacity in advance coinciding with the explosive demand for OLED TVs. LG Display started producing large OLED panels, the raw material for OLED TVs, in 2013 and remains the sole supplier of TV OLED panels to date. This year, in line with the rapidly growing demand for OLED TVs, LG Display completed the expansion of its Guangzhou plant, securing a production capacity of 140,000 8.5-generation OLED panels per month.

The OLED TV market is also rapidly growing. As of the first quarter of this year, global OLED TV shipments reached 1,192,000 units, an increase of over 90% compared to the previous year. Market research firm TrendForce forecasts that the annual global OLED TV shipments will reach 7.1 million units this year, an 80% increase from the previous year. In response, LG Display plans to expand its supply of large OLED panels for TVs from about 4.5 million units last year to around 8 million units this year.

The soaring LCD prices since the second half of last year are also contributing positively to LG Display’s performance outlook. Although some predict that the sharply rising LCD prices will pause and turn downward in June or early July, the industry generally expects price differentiation by panel size and application.

Dongwon Kim, a researcher at KB Securities, said, "For TV panels, small and medium sizes are expected to drop by an average of 20% by the end of the year, while large panels will see a price decline of less than 5% on average. Prices for PC LCD panels are also expected to continue rising until the end of the year due to the normalization of remote work and increased demand for enterprise PCs."

Supported by the rapidly growing OLED panel market and steady LCD price increases, LG Display’s consolidated operating profit for the second quarter of this year is also expected to improve significantly. Recently, the financial investment industry has raised the second-quarter operating profit forecast to around 700 billion KRW, one notch above the consensus of 546.5 billion KRW. As the year progresses, the profit contribution from the OLED panel business is expected to increase, making it likely that LG Display will achieve an annual profit turnaround for the first time in three years since 2018.

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