Stock market rewards LG's display limb for doing less terribly than expected

Glimmer of hope in OLED biz

Shares in South Korean electronics firm LG Display spiked today after it posted a smaller-than-expected loss in the previous quarter and a better prognosis ahead for its OLED business.

"In the second half of the year, revenue from our large OLED panels will rise steeply in line with the increase in production from (the company's) Chinese OLED fab," LG Display CFO Suh Dong-hee told an earnings call.

LG Display lost ₩422bn (£275.11m) in the months [PDF] between October and December. That's somewhat better than expected by analysts, who predicted a ₩578bn (roughly £373m) loss.

LG Display's recent struggles can be attributed to falling prices and intense competition in the LCD market as cheaper Chinese manufacturers take the stage. To address that, the firm says it will cease producing LCD TV panels in South Korea, where labour costs are high, while redoubling its OLED efforts, which are increasingly a common feature on mid to high-end smartphones.

It has also cut production of LCD panels to address the oversupply problem that's driving prices down.

OLED screens offer better brightness and color fidelity while consuming much less power as they do not require backlighting. This also means they're somewhat thinner than older-style screens.

LG Display scored a major coup towards the end of 2018, when it was selected by Apple to be a supplier of OLED flexible panels in addition to the previous incumbent, Samsung. Its OLED displays feature in the iPhone 11 Pro Max, as well the Apple Watch. ®

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