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LG Display expects improved fiscal performance in the second half of 2016
August 25, 2025
As OLED becomespoised to explode into the market, companies like LG Display are no doubt concerned as to what will happen with the future of LCD sales. While the company has regained its position asthe head of the pack, and more affordable televisions may indeed continue to be primarily LCD based for the foreseeable future, things may ultimately change when it comes to smartphones and, to a limited extent, tablets.
The first quarter of 2016 saw not only LG Display, but also Samsung, report lower income due to decreased demand for LCD television panels. A new report out of Korea however, indicates that LG is optimistic for the short-term future. According to Han Sang-beom, LG Display’s CEO:
Reuters reports that, according to research firm IHS, LCD panel prices for televisions, tablets, and monitors increased this past June, signaling a possible end to the declining prices of the panels in recent quarters. LG in particular has been hard hit, and “is expected to post a 96 percent fall in April-June operating profit to 18 billion won ($15.72 million), according to the average forecast of analysts in a Thomson Reuters I/B/E/S/ survey,” according to Reuters.
Also adding to the agitation?Unprecedentedly low sales for Apple’s iPhone, the likes of which have prompted some to predict it may be a trend thatrepeats in the future. As far as LG is concerned, this year’s iPhone products, likely to be called the iPhone 7 and iPhone 7 Plus, are expected to be the last to use LCD displays. Countless reports point to 2017’s offeringssporting OLED displays– primarilymade by Samsung– to go along with what isexpected to be a major redesignto commemorate the product’s 10th anniversary.
Indeed the OLED trend is undeniable, as according to Reuters, “Han said flexible organic light-emitting diode screens were proving popular and LG Display was preparing to supply them to “major” Chinese clients for mobile products. He did not elaborate.” This was followed up with another comment by Mr. Sang-beom:
Short-term turn-around
The news is, for the moment and no doubt a relief given that LG Display’s Q1 2016 operating profit saw a 95% decrease from the same period in 2015, and the poorest in the past four years. At the time, LG reported that Q1 panel shipments by surface area declined 7.7% compared with Q4 2015, and the average selling price declined 17%. As a result, a larger priority was given to making larger sized displays (60 inches/152cm or greater) that allow for greater profit margins than their smaller siblings.
While LG was once rumored to be making OLED panels for Apple’s upcoming iPhone, it is currently unknown – at least based on leaks – if this is still the case now. At one point there may have beena bidding war of sortsallegedly going on with Samsung and LG both trying to vie for the rights to handle main manufacturing.Ifthe company does indeed get a contract, it could mean a stable source of income for years to come, though obviously not for LCD.
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