SEOUL -- LG Electronics on Friday said it would apply its mobile device technology to its home appliance and electric vehicle parts operations despite its plan to exit the smartphone market.
South Korea's second-largest electronics company said it was studying how to preserve its mobile technology, as it is key to further developing smart home appliances and auto parts. LG reiterated that the company was considering all options for its loss-making smartphone business, after CEO Brian Kwon sent an internal memo to its employees last week saying the time had come to make a decision about the unit's future.
"We are considering many ways to internalize our mobile device technologies," Seo Dong-myung, a director at the company, said in the fourth-quarter earnings conference call. "We will continue to study the mobile technology because it is core to our smart home appliances and auto parts."
LG also said it would work to get its EV parts joint venture with Canada's Magna International on track. The new company -- tentatively named LG Magna e-Powertrain -- will be launched in July. LG will control the venture with a 51% stake, while Magna will own the remaining 49%.
LG's operating profit soared 538.7% to 650.2 billion won ($580.9 million) in the fourth quarter from a year ago thanks to its home appliance and television divisions, which enjoyed strong demand amid the pandemic. Its sales rose 16.9% to 18.8 trillion won during the same period.
Revenue in its home appliance division grew 20% to 5.5 trillion won in the October-to-December period from a year ago as both its domestic and overseas markets saw double-digit growth.
But LG's smartphone business posted 248.5 billion won of operating loss for the October-to-December period, meaning it has been losing money for almost six straight years. LG's premium smartphones have failed to catch on with customers as Apple, Samsung and Huawei dominated the market.
LG acknowledged that sales of its premium products had slowed and that the company had also been suffering from a shortage of 4G chips. It added that competition would heat up next year in the global smartphone market, even though demand is expected to recover to the pre-pandemic level.
Unlike the gloomy outlook for its smartphone business, LG expects its EV parts business to grow more than 30% this year on the back of recovery in the global auto market. The company set a goal of a more than 5% operating profit margin in the vehicle component business this year.
Shares of LG Electronics plunged 6.99% on Friday as foreign investors dumped its stocks. South Korea's benchmark Kospi fell 3.03%.