LG Electronics will cease making solar panels on June 30

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LG Electronics will cease making solar panels on June 30

Published: 23 Feb. 2022, 14:55

LG Electronics will exit the solar panel manufacturing business after 12 years, the company said on Wednesday. In the picture is the company's NeON H solar panel model developed last April. [LG ELECTRONICS]

LG Electronics is exiting the solar panel manufacturing business after 12 years.

The company's board of directors voted Tuesday afternoon to cease production of the units from June 30 after years of declining revenues from the business.

For LG Electronics, solar panel sales hit 1.1 trillion won ($922.5 million) in 2019 and fell to 882 billion won in 2020. A spokesperson would not confirm whether the business turned a profit or booked a loss.

In total, the company has sold 58.1 trillion won of solar panels over the past 12 years, which is only 1.5 percent of overall revenue.

LG Electronics added that the business has "an uncertain future."

"During the past few years, the company's global market share for solar panels has stayed at about the 1-percent level, and revenue and operating profit have decreased," the company said in a press release.

According to LG Electronics, cheaper solar panels have been dominating the market while prices of raw materials have increased. Since LG Electronics has been focusing on high-end technology, such as double-sided solar panels, the company could no longer compete with lower-priced rivals.

The deficit suffered by the unit, or the surplus generated, would be calculated after the business is fully terminated at the end of June.

All 900 employees in the solar panel unit will be relocated to other divisions within the company or to related companies.

LG Electronics said it will take this as an opportunity to concentrate on diversifying its business portfolio with new projects, such as those related to robots, energy and software.

The company has been shutting numerous money-losing businesses over the past few years.

Last year, it closed its smartphone business after 25 years of manufacturing the devices. The division had been in the red since the second quarter of 2015, and its accumulated losses totaled 5 trillion won.

In 2019, LG Electronics pulled out from fuel-cell manufacturing and sold its water-purifying business to Techcross, a local shipbuilder.

BY YOON SO-YEON [yoon.soyeon@joongang.co.kr]