LG Display posts deficit for sixth quarter, with hopes pinned on OLED

LG Display's OLED plant in Guangzhou. [LG DISPLAY]

LG Display continued to lose money in the second quarter, beset by falling demand for televisions and smartphones in the wake of the coronavirus pandemic and stagnant prices of liquid crystal display (LCD) panels.

The panel maker also announced the mass production of large-sized organic light-emitting diode (OLED) screens at its Guangzhou plant in China on Thursday, a long-awaited development that LG Display and analysts say could help the company turn a profit by better serving the growing list of OLED TV makers.

LG Display reported a net loss of 504 billion won ($421 million) during the April-June period, posting a deficit for the sixth consecutive quarter.

The latest outcome represents a slight improvement from last year, as the loss reduced 8.4 percent.

The operating loss, however, nearly doubled to 517 billion won during the cited period, from 369 billion won a year earlier.

Sales edged down 1 percent on year to 5.3 trillion won.

The display company cited the tepid demand for TVs and smartphones affected by low consumer sentiment as the main factor dragging down profitability, alongside the declining price of LCDs.

Still, the strong demand for IT products, triggered by more online activity and people working from home, prevented a further downturn in earnings.

The company pinned its hopes on the new operation at the Guangzhou facility, which is capable of producing 60,000 large-sized OLED panels per month.

“LG Display is currently producing 70,000 sheets per month at its OLED panel production plant in Paju, Gyeonggi, and this production capability will almost double to 130,000 sheets monthly when combined with Guangzhou’s capacity to make 60,000 sheets per month,” the company said.

The company noted that the new plant will manufacture high-resolution OLED products that will be primarily used for TVs, including 48-inch, 55-inch, 65-inch and 77-inch panels.

Since LG Display is the sole supplier of large-sized OLED panels globally, the opening of another OLED production line stands as a critical move to expedite a full transition toward the next-generation panels from traditional ones like LCD.

The company initially planned to open the plant in the first quarter of the year, but the schedule has been disrupted by the pandemic.

“The large-size OLED business is the essential growth engine for LG Display in the future,” said Jeong Ho-young, CEO of LG Display.

“As the new Guangzhou OLED panel plant begins mass-production, combined with our Paju OLED plant, we are able to accelerate the growth of the large-size OLED business in terms of both quality and quantity. This will enable the rapid adoption of OLED displays in the market.”

This year alone, four new electronics companies debuted their first OLED TVs, including big players like Chinese electronics giant Xiaomi and U.S. appliance maker Vizio.

Their entrance pushed up the number of OLED TV makers to 19 globally.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]