Under The Weight Of The Trade War, The Global Display Panel Business Was Hit Hard

- Oct 26, 2018-

South Korea's LG Display recently said that despite seasonal price increases, the company's profit fell by 76% in the third quarter, because the global panel business was seriously affected by the Sino-US trade war.

 

Although it has achieved profitability due to the recovery of LCD panel prices after two consecutive quarters of losses, LG Display expects this profit trend will not continue into the fourth quarter.

 

According to market research firm Mordor Intelligence, the global display panel market is currently estimated at $164 billion; however, LGD said the market outlook is unclear due to concerns about oversupply in China and tariff growth and protectionism's impact on the global economy.

 

Don Kim, executive vice president of LG Display, said: “LCD is still expected to achieve double-digit growth due to market supply. As for demand, market volatility will continue to grow due to macroeconomic uncertainty due to tariffs, trade frictions and emerging foreign exchange risks. ."

 

According to data released by IHS Markit this month, BOE ranked first in terms of unit shipments, and LG Display ranked second.

 

LG Display's operating profit for the July-September quarter was 140 billion won ($123.2 million) after a two-quarter loss due to seasonal panel prices. According to a poll by Refinitiv, although this figure exceeds the average of 79 billion won by 10 analysts, the data is still lower than the same period last year in the case of global oversupply. Revenue fell 12% year-on-year to 6.1 trillion won.

 

According to data provided by data provider WitsView, the price of a 50-inch (127-cm) liquid crystal display (LCD) TV panel in August began to rebound to $117 after hitting a record low of $109 in June.

 

LG Display said that due to the increase in sales, the higher cost OLED TV panel business achieved profitability in the third quarter.

 

Eo Kyu-jin, an analyst at eBest Securities, a Korean brokerage firm, said the OLED business is not enough to bring enough profit to LG Display because seasonal price increases will disappear in the fourth quarter.

 

With China's push for the industry and LG Display's miscalculation of panel prices, LG Display has experienced difficult times, cutting employee benefits and starting a voluntary separation plan. LG Display said it is currently developing a foldable display, but it will take some time to commercialize.