LG Display bolsters OLED business to take on Samsung
LG Chem said plans to sell the OLED business unit to LG Display Co. on December 15, 2015 for $142 million.
LG Chem spokesperson said the company plans to focus on its material business, while LG Display will develop OLED-based products.
The announcement comes in the same week that LG Display declared a third-quarter profit slide of 30 percent as the result of weaker demand for consumer electronics devices. LG Display, which counts Apple Inc. as one of its major clients, has shored up production of its flagship OLED, as well as quantum dot-based panels known for their high color reproduction. The OLED move is an attempt to compete more effectively with the company’s bigger rival Samsung, which is pushing harder in the quantum dot TV sector.
LG Chem, which is South Korea’s leading maker of car battery packs, is aiming to re-focus on developing high-end chemicals and electric vehicle-related battery packs.
Despite weaker market demand due to uncertainty in the global economy, LG Display has been able to report its fourteenth straight quarterly operating profit because of a continued market trend towards large-sized TVs and increased demand for differentiated products such as Ultra HD and IPS displays.
Apple’s launch of new iPhones looks to have helped cushion what could have been an even tougher third quarter for LG Display.
TFT-LCD panels for TVs accounted for 39% of revenue in the third quarter of 2015, mobile device panels for 27%, tablet PCs and notebook PCs 18%, and monitors 16%.
Don Kim, CFO of LG Display said: “Total net display area shipments in the fourth quarter are expected to increase by a low single digit percentage compared to the
third quarter due to seasonal factors expected at the year end, and although the supply of products and sizes may vary, the downturn trend in panel prices is expected to slow. We will continue to achieve profits through a differentiated strategy mainly due to Ultra HD, AIT and M+ products and a thorough preparation for the OLED market.”
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