South Korean panel maker LG Display (LGD for short) announced on Friday (27th) that its operating loss in the last quarter hit a record high, reflecting that global demand for smartphones, computers and TVs remains weak amid uncertain economic prospects.
LGD reported an operating loss of 876 billion won (about 711 million U.S. dollars) for the October-December period, higher than the 797 billion won average estimate of analysts polled by Refinitiv. The company recorded an operating profit of 476 billion won in the same period last year.
LGD pointed out that the reason for the loss is related to the continuous decline in the price of medium-sized panels, as well as the company’s measures in inventory management and reduced factory operations.
LGD’s revenue in the last quarter fell 17% to 7.3 trillion won. Among them, TV panels accounted for 25% of revenue, IT equipment revenue including laptops and tablets accounted for 34%, and mobile and other equipment panels accounted for 25%. than 34%, and automotive panels accounted for 7%.
Overall, LGD’s 2022 full-year operating loss is as high as 2.08 trillion won, and its annual revenue fell 12.5% to 26.15 trillion won.
For several months, the demand for LCD and OLED panels has declined rapidly, and the poor economy has also dragged down the growth of corporate demand. According to data from research firm Canalys, global desktop and laptop shipments fell 16% to 285.1 million units last year, while smartphone shipments also fell 11% to less than 1.2 billion units.
Canalys predicts that this challenging environment for the PC industry will continue into the second half of this year, with the smartphone market expected to grow flat or slightly higher.
Analysts estimate that LGD will still be unable to escape operating losses this quarter as consumers cut spending and companies continue to lay off workers.
In order to survive the cold winter, LGD announced last month that it would stop producing LCD TV panels in South Korea and implement voluntary paid leave for some employees in South Korea. The company is also reducing LCD panel production in China and adjusting factory utilization for OLED panels for flagship TVs, analysts said.
LGD said that the company will focus on high-value customized business and increase the proportion of sales from the current 30% to 50% by 2024 in order to improve stability in an uncertain market environment.