LGD's second-quarter loss expands and slashes LCD business capital expenditures

by:Kimeery     2021-06-05

The smart phone market is in poor condition. In order to stop the bleeding, Apple's panel supplier, LG Display, decided to break his wrist and slashed its capital expenditure plan by 2020 to US$2.7 billion.

LGD's revenue in the second quarter shrank by 15% to 5.6 trillion won due to sluggish demand for TVs and mobile phones, as well as declining panel prices, with a net loss of 300.5 billion won, showing losses for the second consecutive quarter.

LG Display’s Chief Financial Officer Don Kim (Don Kim) said at the telephone conference that the mobile market is unclear, and capital expenditures are now conservative, but this does not affect the plan to accelerate the migration of LCD to OLED. This means that the capital expenditures that have been cut are concentrated on the LCD business.

LGD expects that LCD for Samsung panels in the third quarter are expected to start contributing profits, but since LCD panels currently account for more than 90% of LGD’s revenue, the replacement process will inevitably drag down financial performance.

In addition, LG Display is also worried about being affected by the stray bullets of the Sino-US trade war, and will adjust its panel output in South Korea and China depending on the situation.

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