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LG Display Drops A Billion As Parent Company Chooses Samsung OLED Panels For New Notebook

LG Display, the South Korean Company that’s been churning out OLED panels for a multitude of brands, has reported a billion dollar loss as questions are raised about the future of their OLED display business.

Some observers claim the proliferation of cheap OLED panels in TVs that undercut the pricing of LG’s own OLED TVs is a problem for the business as Samsung steps up their production of OLED panels.

In another twist, LG Electronics, who sell TVs using LG Display OLED panels, are using OLED panels from Samsung Display for its first OLED notebook, according to South Korean publication The ELEC.( See separate story).

Last week, LG unveiled a 14″ and 16″ Gram Style notebook. Now it’s been revealed that the two models are currently being manufactured using Samsung OLED panels.

LG Display reported its third consecutive quarterly loss last Friday on weak demand for its panel products and falling prices.

The A$999 million loss in the fourth quarter, compared with a profit a year ago.

According to executives at CES 2023, demand has been falling rapidly over the past several months for liquid-crystal display (LCD) and premium organic light-emitting diode (OLED) panels.

Poor macroeconomic conditions have also caused enterprise demand to slow.

Another problem for LG Display has been the slowdown in sales of Apple iPhones and PCs using OLED panels.

According to research firm Canalys, global shipments of desktops and notebooks fell 16 per cent on-year to 285.1 million units last year.

At the same time, worldwide smartphone shipments declined 18.3% year over year to 300.3 million units in the fourth quarter of 2022 (4Q22), according to preliminary data from the International Data Corporation (IDC).

The drop marks the largest-ever decline in a single quarter and contributed to a steep 11.3% decline for the year. 2022 ended with shipments of 1.21 billion units, which represents the lowest annual shipment total since 2013 due to significantly dampened consumer demand, inflation, and economic uncertainties.

This tough close to the year puts the 2.8% recovery expected for 2023 in serious jeopardy with component suppliers such as LG Display facing a new wave of problems.

LG Display said the decline in demand for PCs, TVs and panels, coupled with all-time low LCD panel prices, significantly impacted the company’s overall performance.

Panels for TVs accounted for 25 per cent of the revenue in the fourth quarter, while panels for IT devices, including monitors, laptops and tablets, accounted for 34 per cent, and those for mobile devices and the others accounted for 34 per cent. Automotive panels took up 7 per cent.

The company said it was hoping to turn to a profit from the second half of this year by reducing its investment budget to establish a sound financial structure and expanding its high-value made-to-order businesses amid high macroeconomic uncertainty and sluggish demand.

LG Display cut production capacity in half at its Chinese factory since early this year to save costs. It discontinued domestic production of LCD TV panels at the end of last year.

During CES 2023 in Las Vegas, it set up a booth specialised in cutting-edge automotive panels for the first time at the world’s biggest tech show, where it showcased a self-driving concept car.



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