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Electronics

LG Display ends South Korea production of LCD television panels

Top supplier suffers record annual loss as Chinese rivals drive down prices

LG Display headquarters in Seoul: The company will shift to LCD panels for automotive and industrial uses.   © Reuters

SEOUL -- LG Display, the world's top maker of liquid crystal displays, will stop making them for televisions in its home market of South Korea, the company said Friday after announcing its biggest full-year operating loss ever.

Production of the panels at LG Display's Paju plant will end within the year. LCD panel prices have slumped as Chinese rivals raise output, and prospects of a recovery look dim.

Chief Financial Officer Seo Dong-hee disclosed the plans in an earnings call, saying the company looks to shift to panels for automotive and industrial applications.

"We're optimizing production capacity in response to changes in the LCD panel market," he said. The company will continue manufacturing television LCD panels in the Chinese city of Guangzhou.

LG Display reported a record operating loss of 1.36 trillion won ($1.14 billion) for 2019, marking its first full-year loss in eight years.

The display maker lost 422 billion won for the quarter through December -- down from a profit of 279 billion won a year earlier -- while revenue dropped 8% on the year to 6.42 trillion won. The weakness in the LCD panel market was a main culprit.

The company booked 1.6 trillion won in one-off losses from asset write-downs last quarter, with 1.4 trillion won in write-downs on production of organic light-emitting diode panels for Apple iPhones.

Shipping was slated to begin last year, but LG Display struggled to maintain consistent quality, and delivery numbers remained low.

Amid these headwinds, OLED television panels are seen as LG Display's sole bright spot.

The company expects shipments to soar about 80% this year to 6 million units. But OLED prices are unstable -- a ripple effect of the Chinese LCD output that has driven down that market. Whether LG Display can recoup its investment as planned remains unclear.

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