LG Display eyes future items
By Kim Yoo-chul
CEO Han Sang-beom
Chief executive of LG Display, the world’s biggest display manufacturer, pledged to seek corporate sustainability by investing more for advanced technologies and finding new business partners.
Investment will be focused on future technologies like solutions for organic light-emitting diode (OLED) and ultra high-definition (UHD) applications not just for facility expansion as LG Display is one of a few survivors in the volatile display industry, said CEO Han Sang-beom.
“LG Display is urged to find new customers that can purchase our products. I believe the answer lies in China as China is a big market that has ultra low-end and ultra high-end segments,” Han said in a dinner meeting with reporters at its main display complex in Paju, near the North-South border.
“Amid changing demand and trend, we should find second-tier companies, there as well as global handset makers to keep our current leadership in displays,” he added.
LG Display has been the primary supplier for Apple over the past few years. Apple products are using LG’s Retina-dubbed displays.
Apple expects to launch new iPhone and iPad using LG displays in the latter half. But analysts say LG Display needs to cut its reliance on Apple for sustainability and better future growth.
For a customized approach, Han said that LG Display will have a better product mix from low-end, mainstream to high-end and start the operation of its display cluster in the southern Chinese city of Guangzhou from the latter half of next year as scheduled.
“We will remain as the most-trusted display supplier that guarantees product commitment, on-time delivery and better pricing,” the CEO said.
LG, with the Guangzhou provincial government and Skyworth one of the top Chinese TV manufacturers is investing $4 billion in the project.
According to his observation, a new order in the global display industry is well on its way. Following years of value destruction and structural changes, Han said that the display industry is poised to emerge into a low-growth but highly-concentrated and rational industry.
“We believe this time is different. Increasing barriers to entry, combined with escalating technological uncertainty pave the way to a new display paradigm that no longer rewards aggressive facility investment. The excesses of the past also teach a powerful lesson on how not to do things,” he said.
Synergy with LG Electronics
Cooperation with LG Electronics is smoothly under way though it is going through tough times in TV sales.
“LG Display is developing and applying new technologies in a stable manner,” Han said.
LG Electronics owns a 37.9-percent stake in LG Display.
Helped by LG Display, LG Electronics has beaten out Samsung to introduce the world’s first 55-inch OLED TV. LG has started the sale of its first curved OLED TV to the United States.
LG Display, however, underestimated the foray by some Taiwanese budget display makers into the low-end LCD market supporting the UHD picture quality.
With OLED, UHD is also regarded as the next cash-generators by display suppliers and TV producers that can replace the industry’s mainstream of LCDs.
“UHD displays manufactured by Taiwanese companies are too poor in terms of quality. Their products are not real UHDs. Some Chinese and Taiwanese players are selling UHD displays with heavy discount. This is too bad,” he said, adding LG plans to release more UHD models as LG’s UHD panels were getting warm initial responses.
In OLEDs, CEO Han admitted that high price was still the biggest condition that’s been restricting the OLED industry from fully taking off.
“With OLEDs, TVs could be curved and thin like a spoon. Isn’t it amazing? As the OLED is new, more time will be needed for the market to open widely,” said the CEO.
He said that the third and fourth quarter will be fair in profit as demand for display applications isn’t that strong.
LG Display generated 6.5 trillion won in revenue during the second quarter, while its operating profit during the April-June period came with 366 billion won, beating the market consensus.