LG Display, the world’s largest maker of LCD televisions, reported a 95 percent year-on-year decline in operating profit in the fourth quarter. It is the lowest level in nearly two years. The company said the performance did not meet market expectations due to a fall in panel prices and a bigger-than-expected increase in the development and production of smaller OLED screens.
“The downward trend in panel prices is expected to continue, but prices are expected to be stable at the end of the first quarter.” The company’s chief financial officer, Don Kim, said in a statement. He added that panel shipments in the first quarter may have fallen by nearly 10 percent because of the off-season.
Analysts said the company’s LCD panel sales were lower than the previous year because of weak demand and OLED panels replaced the LCD panel of the latest iPhone.
WitsView said LCD TV panel prices fell by 20% to 40% last year, compared with the previous year’s rise in demand for large-size TV sets.
However, the trend is likely to ease in 2018, as TV shipments rebound and lower panel prices encourage TV manufacturers to step up their stocking. In addition, as the new production line gradually improves production quality, supply and demand will be more balanced.
LG Display also dominates the market for OLED panels, but its rival Samsung electronics’ Display business dominates the small-size OLED panel market, which LG Display now hopes to penetrate.
South Korea approved LG Display’s plans to build an OLED panel factory in China in December last year, which it hopes will make a big OLED business and move into the market for OLED panels of smartphones.