LG Display to rebound on strong OLED demand
LG Display's plant in Paju, Gyeonggi Province, mass-producing OLED panels / Courtesy of LG Display
By Jun Ji-hye
LG Display will turn around in the second half of this year on the back of growing global demand for its organic light emitting diodes (OLED) panels, analysts said Wednesday.
LG Display CEO Han Sang-beom
In the first six months of 2018, LG Group's display business unit posted an operating loss amid falling global prices for liquid crystal display (LCD) panels and intensifying competition.
But the company is expected to make profits in the third quarter and beyond as its OLED business segment lifts up overall performance.
According to market researcher Euromonitor International, global demand for OLED TVs is expected to increase from 2.54 million this year to 3.91 million next year, 6.56 million in 2020, 9.95 million in 2021, and 20 million in 2023.
LG Display, the world's sole large-sized OLED panel maker, mass-produces the panels at a plant in Paju, Gyeonggi Province, and plans to begin production at a Guangzhou plant in China next year.
The firm aims to produce 4 million panels next year, 7 million in 2020 and 10 million in 2021.
LG Display posted net losses of 98.3 billion won ($87 million) and 228.1 billion won in the first and second quarters, respectively.
But Seoul-based financial data provider FnGuide said the firm is expected to post 59.3 billion won and 825.2 billion won in operating profit next year and in 2020, respectively.
Such expectation comes as an increasing number of global TV makers are competitively releasing OLED TVs after LG Electronics first released the product in 2013 to much success.
Companies producing OLED TVs after LG Electronics include Sony, Skyworth, Panasonic, Philips and Toshiba.
LG Electronics took a 74.9 percent share in the market last year, according to Euromonitor International.
“OLED TVs have been regarded as an expensive home appliance but their prices are expected to drop as production increases,” said James Kang, home and tech analyst at Euromonitor International. “This will reduce the price hurdle and lead to great growth of the market. Also, with an increasing number of customers preferring high-definition, large-sized TVs, OLED TVs with reasonable prices will lead the premium TV market.”
Being aware of the market outlook, an LG Display official said, “We will accelerate efforts to change our business structure to OLEDs and solidify our position as a leader of the global display market.”