Samsung, LG display arms closely watching fallout of Middle East crisis

Samsung Display CEO Yi Chung makes opening remarks at the general meeting of the Korea Display Industry Association held at Lotte Hotel World in southern Seoul, Thursday. Yonhap

Heads of Korean display makers said Thursday they are closely monitoring the potential fallout of the U.S.-Iran war amid concerns that the Middle East conflict could trigger inflation and push up production costs.

"If the war lasts longer, the price burden of raw materials will rise significantly," Samsung Display CEO Yi Chung told reporters ahead of the general meeting of the Korea Display Industry Association held in Seoul.

"While conditions are not favorable due to rising memory chip prices, the war between the United States and Iran is expected to lead to inflation, making the situation even more difficult in the second half," Yi said.

The outlook followed industry concerns that rising global memory chip prices amid the artificial intelligence (AI) boom may lead smartphone makers to reduce shipments due to higher costs, eventually weakening demand for display panels.

"(The performance) of memory chip producers may be strong, but clients using memory chips are facing challenges," Yi added. "It is crucial (for companies) to reduce production costs and cooperate with partners to enhance competitiveness."

LG Display CEO Jeong Chul-dong said his company is also closely monitoring the situation in the Middle East, although the conflict has not yet had a direct impact on the company.

"The prices of finished products are rising due to higher memory chip prices, and we are currently assessing what impact it may bring," Jeong said. "We plan to make moves in response to changes in memory chip supply."

Jeong noted the company will continue efforts to enhance its financial health and generate stable profits to deliver solid performance in the first half.