South Korean display panel maker LG Display announced its operating report for December 2022 and the fourth quarter on Friday, saying that global demand for smartphones, computers and TVs remains sluggish due to an uncertain economic outlook. So the fourth-quarter operating loss reached a record 876 billion won (about RMB 4.818 billion), compared with a profit of 476 billion won in the same period last year.
LG Display said in a statement that the loss was due to the continued decline in medium-sized panel prices and “intense” efforts to control inventory and reduce factory operations.
Revenue fell 17 percent to 7.3 trillion won, LG Display said, further weighed down by sluggish demand from large European customers for higher-margin large organic light-emitting diode (OLED) TV panels and makers of notebooks and monitors, analysts said.
Analysts predict that the display maker will continue to post operating losses this quarter as consumer spending declines and companies have to cut jobs to weather the storm. In addition, to weather the economic downturn, LG Display said last month it would stop producing liquid crystal display (LCD) TV panels in South Korea.
The display maker has implemented voluntary leave regulations for a small number of staff as well as some production personnel.
The company is also reducing LCD panel production in China and adjusting factory utilization rates for its flagship TV OLED panels, analysts said.
LG Display said it plans to strengthen its custom business to improve stability in the face of uncertain market conditions, increasing its share of sales to 50 percent by 2024 from 30 percent today.
The company accounted for its large OLED panel business as a separate segment in the fourth quarter, reflecting a 1.3 trillion won asset loss, resulting in a quarterly net loss of 2.1 trillion won.