LG Electronics Australia is having a rough year when it comes to sales of OLED TV’s due in part to their lack of budget models and the impact of inflation on the economy.
With sales in double digit decline, LG is struggling globally when it comes to OLED production with LG Display, the #1 manufacturer of OLED panels launching a voluntary redundancy program in an reduce costs after months of operational losses due to decline in demand for OLED TVs.
The company has been struggling with operating losses for six consecutive quarters since last year.
From January to September this year, the South Korean display operation accumulated loss of over A$3 billion.
ChannelNews understands that LG Electronics Australia has moved to slash costs as sales slow with a number of people exiting the Company.
The Display business who are also looking to slash costs is offering 36 months’ severance pay to a worker’s current salary along with an amount to be negotiated covering their employees’ children’s education expenses.
Despite having a monopoly in the OLED manufacturing market, the business has struggled because of the high cost and failure rate at a point of manufacture of OLED panels, the business is now facing new competition from China.
Last week Chinese Company BOE claimed that they are set to make significant inroads into the high-end OLED IT market after they announced the construction of a new a new 8.6G OLED plant.
This is an emerging category for OLED panels and one that LG Display was banking on for growth.
BOE constructed China’s first 6G OLED production line and has now announced its first 8.6G facility. 8.6G that utilises larger glass substrates, allowing for more efficient and cheaper production of OLED panels for use in mobile phones, tablets and notebooks.
Earlier this year LG Display stopped domestic production of LCD TV panels in their factories.
New CEO Jeong Cheol-dong is currently leading an efficiency drive with subsidiaries such as Australia being forced to cut costs and minimise exposure in areas of their business that is struggling.
Jeong, previously the president of LG Innotek, took office on Dec. 1 following LG Group’s year-end executive reshuffle last month.
“Getting out of the red is the most urgent priority, and for that, it is important that we complete the deals as we promised to our customers and achieve our planned targets,” Jeong said, sending his inaugural message to employees via email last week.
“We will put a strong drive on cost innovation across the business while improving quality, price and delivery — the most basic elements of corporate competitiveness — to build a solid company,” he said.
Jeong achieved a remarkable improvement in profit while serving as the CEO of LG Innotek, LG Group’s electronic component manufacturer, from 2019 to 2022.
LG Electronics USA launched the latest addition to its new 2023 LG gram laptop lineup – the LG gram SuperSlim.
At LG Innotek, Jeong shut down the company’s loss-making businesses, such as high-density interconnections for smartphones, and strengthened business in other areas such as camera modules.
Under Jeong’s leadership, LG Display is expected to boost its high-value OLED panel business in the burgeoning automotive market, where premium auto brands have started using OLED panels for infotainment displays.
According to market tracker Omdia, the market for automotive OLED panels is expected to see a fivefold increase to reach $2.17 billion by 2027, with this year’s global sales forecast to stand at $481.75 million.
Last year, LG Display took 50 percent of the global automotive OLED panel market, while its crosstown rival, Samsung Display, secured 42.7 percent. China’s BOE Technology came third to take a 7.3 percent share in the market.
Jeong is an LG veteran who has served various positions at LG Display, LG Chem, and LG Innotek over the past 40 years.
