Strong growth According to Korea Herald, LG Display Co., realized the strong growth in the Q2 of 2021. LG display is a South Korean display manufacturer and one of major […]
According to Korea Herald, LG Display Co., realized the strong growth in the Q2 of 2021. LG display is a South Korean display manufacturer and one of major makers. Thanks to the increase of LCD panel prices and improvements in the OLED display business, the company escaped from deficits.
Positive financial numbers
LG Display earned a net profit of 423.8 billion won ($368.5 million). This is a huge improvement since it was a loss of 503.8 billion won in 2020. Operating income was 701.1 billion won in the same period, compared with a loss of 517 billion won last year. In fact, it was the first time in four years that its operating profit surpassed 700 billion won. Of course, sales rose 6.96 trillion won (31.3% YoY growth), which was the largest for any Q2 in its history.
Its EBITDA (earnings before interest, taxes, depreciation, and amortization) margin was 25.4%, the highest since the third quarter of 2009. Its net profit jumped 59.4 percent, while operating profit increased 34 percent by quarterly base.
LG’s display panel shipment area became from 6.7 (2020) to 8.9 million square meters (2021) in the Q2. Furthermore, the average selling price of its displays became $703 per square meter, up from $654 from a year ago. To realize this positive change, the company increased its capacity from 9.3 to 11.6 million square meters.
By product, panels for IT products and TV panels accounted for 39% and 38% of its revenue in Q2, respectively. What’s more, mobile displays and other screen products made up 23 percent of its sales.
The company is planning to increase OLED TV panel business since the large-size OLED business expands profit. As a result, the company expected OLED TV sales to be 8 million units in 2021. Furthermore, LG Display expected it will be able to supply 10 million OLED TV panels (2022) and 11 million (2023). To realize this increase, the company is expanding its capacity.
Our media has already discussed the topic that LG withdrew the smartphone business. Displays are its core business and the company has strong expertise in this area. However, it failed in making a display competitive edge in the smartphone market. That is why LG made a decision to stop its smartphone business.
LG’s local rival, Samsung, is a major display supplier for Apple’s iPhone, but they are rival at the same time. Therefore, the competition incentivizes the US company to reduce its dependence on Samsung. In fact, LG Display is supplying its displays major Apple’s products including Apple Watch and iPhone.
According to some sources, Apple made a decision to use OLED displays for iPad from 2024. LG Display revealed its 3.3 trillion won (about 310 billion USD) investments in its OLED display and mass production will start from 2024.
Thus, the South Korean Group is still alive, even though they made huge loss in the smartphone business. OLED TV panels are cash cow and the company pay attention to future as well.