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LG Display prepares to slow demand for electronics with simple shutdowns

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LG Display Co Ltd . Updates

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One of the world’s largest electronics monitor makers said it is preparing for lower prices in the second half of the year as the easing of Covid-19 lockdowns impacts demand for TVs and other devices.

LG Display, Apple’s supplier, said on Wednesday it turned into an operating gain in the second quarter from pandemic-driven demand for TVs and laptops. However, analysts expected earnings in the world’s second-largest monitor maker to peak in the third quarter as the digital boom brought on by the shutdowns fades with rapid vaccine rollouts in developed countries.

The South Korean company reported operating gain of 701 billion won ($606 million) in the April-June quarter, compared to an operating loss of 517 billion won a year earlier. Sales jumped 31 percent year-on-year to $7 trillion.

IT demand is likely to remain powerful in the second half. . . “But the demand for little and medium-sized TVs is falling,” Suh ​​Dong-hee, the company’s chief financial officer, told analysts following the better-than-expected results were announced. “We plan to operate our business on the assumption that the prices of the IT panel may partially regress and decline.”

LG Display said it is shifting its LCD TV production lines to IT products, which are in lofty demand due to a lack of components. Apple on Tuesday forecast a slowdown in revenue growth, as chip supply restrictions that have disrupted production of iPads and Macs are also expected to hamper iPhone sales.

Prices for LG’s 55-inch base LCD panels, which are used in televisions, more than doubled in the second quarter of the previous year, according to data from TrendForce.

But plate prices for some products are likely to fall in the second half as people spend less time at home with many countries lifting restrictions. Analysts said the trend could be exacerbated by oversupply as Chinese companies ramp up production of panels.

“LCD display is gradually increasing as the chip crunch subsides slightly,” said CW Chung, head of research at Nomura in Seoul. “Panel prices are likely to peak in the third quarter as demand for TVs, laptops and tablets is likely to decline amid conditions returning to average.”

However, Kim Young-woo, an analyst at SK Securities, noted that this was not a foregone conclusion, pointing to the resurgence of Covid-19 infections driven by the delta variant.

He said: “Demand for TVs and IT products may not be as bad as feared as the delta variant is slashing travel demand, but TV demand, following its biggest boom in two decades, is likely to enter a downturn following it It peaked in the third quarter.

The global dominance of South Korean display makers is also under threat, with Chinese companies now the world’s largest producers of LCD panels.

Chinese groups are also catching up with premium organic LED panels. LG Display said Wednesday that it is considering increasing its capacity to produce plastic OLED panels to meet the growing demand for curved display products.

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