Due to technological innovations in the industry, LG Display must devote more funds to the production of OLED panel production lines, which is also a major reason for their profit decline.
LG Display CFO Don Kim said: 'The speed of market changes far exceeds our expectations. We will adopt effective and flexible means to manage capital's stated and maintained operating performance.'
From January to March, LG panel business has already lost 98 billion won (approximately US$91 million), compared with the profit of 1,000 billion won last year. It is a terrible year, and this year’s loss exceeded the expectations of Reuters’ survey. In addition, LG suffered a loss of 5.7 trillion won in the first three months of this year.
According to analysts inside Reuters, LG Display’s losses were largely due to Chinese panel makers rushing into the market under government subsidy, leading to panel prices falling. Data show that prices of mainstream LCD panels have fallen in the first quarter of this year. 6-10%.
Concern over the oversupply of the market has caused the stock price of the company to drop by about 17% so far this year.
Don Kim said that in order to watch sports events, consumers will buy more large-screen devices, so LG Display shipments will rebound.