LG Display cancels investment of 2.3 billion euros due to uncertain mobile market

LG Display announced in the publication of the quarterly figures that it is canceling or cutting back approximately 2.3 billion euros in planned investments for 2020. According to a CEO, this is related to the uncertainty in the mobile market.

Chief Financial Officer Don Kim told Reuters that cutting back on the previously planned investment is a “conservative approach” stemming from “uncertainty surrounding the mobile market”. Canceling this investment would not affect the increase in the production of OLED panels. LG Display says it will continue with the investments, such as the commissioning of a new Chinese factory for OLED panels.

LG Display has made a loss for the second consecutive quarter. The company recorded a loss of more than 173 million euros. Compared to the same period in 2017, turnover for the second quarter of this year decreased by 15 percent to EUR 4.25 billion. For the third quarter, LG Display expects an increase in demand for display panels.

The company attributes the poor numbers to the transition from LCD production to a corporate structure in which the production of OLED panels is increasingly central. For this ‘strategic change’ LG Display has had to go into debt, according to its own words. The company also reports that there is a surplus of LCD panels and fierce competition between different display manufacturers.

Panels for televisions accounted for 42 percent of LG Display’s total sales in the second quarter, compared to 22 percent for smartphones primarily, 19 percent for tablets, PCs and laptops, and PC monitors contributed 17 percent of the sales.