It’s good to borrow money from your parents. Not like Samsung, where the parent borrowed money from the kid, Samsung Display. It’s also nice when it leads to a jump in your stock price, which it did for LG, a whopping 13% in a day.
Oh, how we kid. It’s not like LG Display is alone in getting help from family members. Samsung Electronics, borrowed 20 trillion won ($15 billion now, but $16 billion at previous exchange rates) from Samsung Display in February to secure operating funds, and SK received a cash injection of 2 trillion won ($1.5 billion) from SK Innovation in December, 2022, to fund its manufacturing base. LG Display is only borrowing 1 trillion won ($770 million). But, what’s LG to do?
The company had 1.8 trillion won ($1.4064 billion) at the end of 2022, according to its financials. Now, it intends to take the money to expand its share in the premium TV market, where it risks falling behind Samsung while facing threats from erstwhile competitors like TCL. The intention is to close the gap at the top and solidify what was once a solid number two slot for the company by investing it is multilayer electrode technology for advanced (META) displays, while building out its business in transparent and gaming OLED panels.
We just wrote about Samsung’s top-down assault on the TV market with its QOLED displays so, there’s no doubt that LG is making sure it has the means to stay the pace by giving its META displays a boost. However, it looks the company is also branching out into other areas to make sure that it doesn’t put all its eggs in one basket. Nevertheless, there is a great deal of similarity between what Samsung and LG are trying to do.
In terms of costs, QOLED displays tend to be more expensive than traditional OLED displays due to the additional quantum dot layer. META displays also tend to be more expensive due to the more complex manufacturing process. LG also has WOLED displays which can also be more expensive to manufacture due to the complexity of the RGB sub-pixel approach. Depending on the application, they all offer some price value because it isn’t just TVs, it’s smartphones, monitors, and laptops, among other things. That means fighting differentiation battles on a number of fronts for Samsung and LG, all of them expensive engagements – TVs and smartphones in particular.
