What They Say
LG Display released its Q3 financials and held its earnings call. Revenues were up 21% QoQ, but down 6% YoY at $4.75 billion and income was 11% down with an operating loss of $530 million and a net loss of $543 million. ASP was up from $566/m² in Q2 to $675/m² but down from 750/m² last year. TV dropped to just 25% of revenue, with IT at 45% and Mobile etc. at 30%. Area shipment was down 2%.
In its call, the firm said that sales of large OLED were ‘soft’ and declining LCD prices so the firm has accelerated its Korean G7 and Chinese G9 TV LCD shutdown plans. In questions it said that it will be ‘reducing 30,000 from P7 and 80,000 from Gen 8. And for P7, this will be pulling up the timeline by about six months to one year from the original schedule’. The G8 production cut will be around the same time.
Capex in 2022 will be reduced from the plan earlier this year by $700 million. It will reduce its inventory by the same amount by the end of the year and production will be ‘boldly adjusted’.
In OLED, the firm confirmed that it will try to switch more to OLED for IT applications and will promote tablet OLED production in 2024 and broaden its notebook OLEDs. Smartphone and automotive OLED will continue to be developed and promoted. The firm pointed out that Europe only takes around 10% of global TV demand, but over 45% of LG’s TV OLEDs and so is disproportionately affected by the Russian invasion of Ukraine.
LGD said that it has recently seen ‘some positive changes’ in LCD panel prices, but said that there is still a high level of demand uncertainty ‘if there is no large scale adjustment on the supply side’.
In large OLED, LGD is now giving guidance of 7 million OLEDs for TV.
What We Think
It does feel to me that LGD is at something of a crossroads with OLED TV. It seems to me that the arrival of better blue materials can’t come soon enough. (BR)
