By Kim Yoo-chul
Staff Reporter
The EU and Japan are allegedly targeting LG and Samsung for price fixing following the U.S. levy of $400 million on LG Display.
LG Display will pay $80 million per year for the next five years. The levy came at a time when the global display market is in a downturn.
The world's second largest LCD maker is expected to set aside $400 million to cover losses in its fourth quarter, which would pull down its earnings-per-share (EPS) by 23 percent, Han Keon, an analyst at Morgan Stanley research firm said Thursday.
LG Display suffered a 44 percent profit fall in the third quarter, while its operating profit also decreased 63 percent.
Samsung Electronics cut its LCD output by 5 percent in August. Samsung and LG said they will cut spending on LCDs next year.
LCD panels are widely used in computer monitors, notebooks, televisions, cell phones and other electronic devices. The global market is valued at $70 billion. LG Display sold 14.35 trillion won in LCDs last year, less than Samsung's 14.7 trillion won.
The worst has not yet come for LG Display as the EU and Japan are moving to levy penalties if they conclude it has been price fixing. A Samsung spokesman also said it is preparing for a possible ruling.
"Truly, that's bad news for Samsung and LG. They two may sustain operating losses," said Ryu Seong-rok, an analyst from NH Investment & Securities.