What Display Daily Thinks: You had know that change was coming and that it was going to be big. We said something to that effect when we first read the mutterings about losses at LG Display. This vision, this plan of transformation, isn’t just PR pablum, it is a significant change in strategy, and every part of LG’s group of companies is going to have to adapt to meet the challenges. For anything that touches that display business, the changes are going to be substantial.
On automotive, the ambition is spot on, and expands on the strong hand dealt to LG by its display business. It also means that most of LG’s B2B business is now relying on its automotive customers. From everything that we can glean from financial analysts covering LG Group, there is going to be a significant investment in a range of components, and greater integration among parts, in automotive.
On TVs, moving to profit from services is also spot on. It was inevitable that LG would get here, as it is inevitable that all TV makers will have the same realization, as it is inevitable that TV panel manufacturers will also arrive at the same conclusion; the display is not the profit center, it is the software that runs on it. An installed base of 48 million users across 29 countries, considering that they all would have to have bought an LG TV to get there, is a very good foundation for a platform venture.
It’s not the end of LG’s display business but the start of a new way of evaluating its value to the group. That probably means a lot of change in strategy, attitude, and expectations.
LG Electronics Sets Ambitious Vision 2030 to Transform into Platform-Based Tech Giant
LG Electronics Inc., the South Korean electronics giant, has unveiled an ambitious business strategy aimed at transforming itself from a traditional home appliance maker into a platform-based tech giant. The move comes two years after the company’s unexpected exit from the mobile phone business, leaving investors curious about its next growth engine.
Under the leadership of Chief Executive Cho Joo-wan, LG aims to achieve a significant increase in annual sales, targeting 100 trillion won ($77.5 billion) by 2030, a sharp rise from the 65 trillion won ($51 billion) recorded in 2022. To achieve this, the company plans to invest 50 trillion won ($39.2 billion), allocating over 25 trillion won ($19.6 billion )to R&D projects and 17 trillion won ($13.3 billion) to infrastructure development, over the next decade. This substantial investment will facilitate a drastic transformation of LG’s business portfolio, driving qualitative growth.
During a press conference at LG Science Park, the company’s research center, CEO Cho stated that LG would not be satisfied with merely producing quality home appliances. Instead, LG intends to boldly step into the role of a smart life solution provider that seamlessly connects with various consumer experiences. To achieve this vision, LG has identified three primary growth drivers: increasing sales of non-hardware products, promoting the business-to-business (B2B) model, and exploring new growth areas such as electric vehicle (EV) charging and digital health.
CEO Cho emphasized that these three sectors would account for more than half of LG’s annual sales and operating profit by 2030. In addition to the growth drivers, LG aims to reinvent its work processes and communication methods, establishing a brand-new image within the industry.
To bolster its content competitiveness and drive the growth of LG Channels, a free advertisement-based broadcast platform, LG plans to invest over 1 trillion won ($784 million) in the next five years. The company made its foray into the TV content platform market in 2021, introducing webOS software for smart TVs. As a result, the number of LG Channels users has surged from 20 million in 25 countries last year to 48 million in 29 countries presently.
In the B2B segment, LG aspires to achieve annual sales of 40 trillion won by 2030. To this end, the company has been actively nurturing its automotive parts business, with a goal of becoming a global top 10 vehicle component maker. LG aims to double revenue in this segment, reaching 20 trillion won by 2030. The order backlog for LG’s vehicle component division is projected to exceed 100 trillion won by the end of this year.
Another area of focus for LG is the digital healthcare business, with its North American Innovation Center at the forefront. Additionally, LG plans to expand its presence in the EV charging sector by introducing four charging systems through its affiliate, HiEV Charger. After acquiring HiEV Charger last year, LG intends to expand its EV charging business into Europe and other Asian countries in 2024. The company also expressed its willingness to pursue mergers and acquisitions or joint venture projects to facilitate inorganic growth.
If LG successfully executes its Vision 2030, it anticipates an average annual revenue and operating profit growth rate of 7%, along with a sevenfold increase in enterprise value. Referred to as the “triple 7” goal, LG’s ambitious vision positions the company as a platform-based tech giant poised for substantial growth in the coming decade.
