LG Display, a leading display panel manufacturer, reported its financial results for the second quarter of 2023, indicating both positive and challenging trends.
South Korea’s LG Display said its revenues in the second quarter rose by 7 percent to KRW 4,739 billion compared to KRW 4,411 billion in the previous quarter. However, there was a 15 percent decrease in revenues compared to the same quarter of the previous year, when it recorded KRW 5,607 billion.
During the second quarter of 2023, LG Display posted a net loss of 699 KRW billion, showing some improvement from the net loss of KRW 1,153 billion in the first quarter of 2023. Nonetheless, it was still higher compared to the net loss of KRW 382 billion in the second quarter of 2022. This marks the company’s fifth consecutive quarterly loss, mainly attributed to weak demand for mobile display panels and a slowdown in premium TV demand, particularly in Europe.
As a supplier to Apple, LG Display faced an operating loss of 881 billion won ($689 million) for the April-June quarter, a significant increase from the 488 billion won loss reported during the same period in the previous year.
One of the factors affecting LG Display’s performance was the reduced panel inventory levels across the industry’s ecosystem. The company witnessed increased demand and shipments of mid- and large-sized panels, including OLED TVs, which contributed to the rise in area base panel shipments and revenues in the second quarter.
To address the challenges, LG Display has been working on reducing costs by innovating its cost structure, strengthening inventory management, and improving operational efficiency. The company is keen on expanding its market-to-order business and plans to focus on OLED businesses. It aims to increase the proportion of revenues from market-to-order business from 40 percent to over 50 percent next year and surpass 70 percent within the next two to three years.
Additionally, LG Display plans to bolster its presence in the OLED market, with a target to make OLED panels account for more than 50 percent of its total revenues this year. The company is preparing for mass production and supply in 2024, relying on its technological expertise in the IT OLED market.
Furthermore, LG Display is aiming to strengthen its position in the premium TV market by capitalizing on the fundamental advantages of OLED technology. It also plans to explore emerging markets, such as Gaming OLED and Transparent OLED sectors, to diversify its revenue streams and drive growth in the future.
LG Display witnessed reduced panel inventory levels across the industry’s overall ecosystem as inventory adjustments have continued in downstream industries, particularly focusing on TV and IT products, since last year.
The company saw increased second-quarter demand for and shipments of mid- and large-sized panels, including for OLED TVs. As a result, area base panel shipments and revenues in the second quarter rose by 11 percent and 7 percent, respectively, compared with the first quarter.
LG Display said panels for TVs accounted for 24 percent of revenues in the second quarter, while panels for IT devices including monitors, laptops, and tablet PCs accounted for 42 percent, panels for mobile and other devices accounted for 23 percent, and panels for automobiles accounted for 11 percent.
LG Display will make efforts to expand shipments of mobile devices by leveraging its production capacity for its small- and mid-sized OLED businesses. LG Display is preparing for a mass production and supply system in 2024 based on its technological leadership in the IT OLED market.
LG Display is strengthening its premium TV market position by capitalizing on OLED’s fundamental competitiveness. Furthermore, the company will actively pursue emerging markets such as the Gaming OLED and Transparent OLED sectors.