LG Display to focus on automotive screens for turnaround

LG Display Co., the world’s top manufacturer of large-size organic light-emitting diode (OLED) panels, is set to focus on the automotive screen business for a turnaround as vehicles use more electronics including display panels across the world.

The loss-making South Korean company also eyes more orders for smaller OLED panels as it has been building a new sixth-generation production line at a local production complex since 2021, which will double the output of the products to 60,000 units a month.

LG Display’s sales of automotive display panels are expected to more than double to 3.5 trillion won ($2.7 billion) by 2025 from 1.6 trillion won last year, according to industry sources in Seoul on Friday.

The company’s officials predicted the values of orders for automotive display panels to continue the double-digit growth every year. It secured orders of up to 5 trillion won for the vehicle components in 2022.

That is expected to help LG Display improve earnings amid weakening demand for electronic gadgets due to a global economic slowdown. The company suffered an operating loss of 2.1 trillion won last year on a consolidated basis, swinging from 2.2 trillion won profit in 2021.

LG Display plans to use 1 trillion won, which it recently borrowed from its top shareholder LG Electronics Inc., for the automotive display panel and its main large OLED businesses.

MADE-TO-ORDER BUSINESS

The company is poised to boost its made-to-order business for stable profitability by generating 70% of total sales by 2026 from the business of products such as smaller OLED panels for automotive screens, smart devices and others.

The made-to-order business, which is to supply products of special or individual demand for specific volumes through a contract, helps a company stably manage investments and prices.

LG Display’s made-to-order business reached the low-40% level as of the first quarter, up from 30% last year and only 11% in 2019.

“The sales structure, which is currently concentrated on certain customers, will be diversified in line with the portfolio expansion in the future,” said LG Display CEO Jeong Hoyoung.

Write to Sungsu Bae and Ji-Eun Jeong at baebae@hankyung.com
 
Jongwoo Cheon edited this article.