
Apple Supplier LG Display's Quarterly Losses Unlikely to Affect OLED Investment
Wednesday July 25, 2018 3:37 am PDT by Tim Hardwick
Apple supplier LG Display has reported a second quarterly loss and cut its investment plans by $2.7 billion up to 2020, on mounting concerns for the smartphone market (via Reuters).
LG shares fell 7 percent after it posted faster-than-expected declines in the price of display panels and an unpredictable outlook. The announcement follows news that another Apple supplier, Taiwan-based TSMC, also scaled back its revenue and investment estimates over uncertainty in the mobile market linked to risks of oversupply and unbalanced competition.
Crucially for Apple, LG said the $2.7 billion investment cut would not impact the speed of the Korean firm's transition from LCD to OLED production, although existing LCD operations could be affected.
The investment cut would not impact plans to "speed up the shift" from LG’s mainstay liquid crystal display (LCD) business toward next-generation organic light-emitting diode (OLED) panels, the company said.
Plans to invest about 20 trillion won in OLED panels by 2020 remained unchanged, meaning the cuts would apply mainly to LCD operations.LG's traditional LCD business, which analysts estimate makes up more than 90 percent of its sales, is reportedly struggling with falling prices as fast-growing Chinese panel makers ramp up their capacity.
Against that backdrop, Apple is investing $2.67 billion in LG's OLED panel business, with the Korean firm said to be building a production line dedicated to iPhone orders only, as part of its agreement with Apple.
Separately, LG is believed to have signed a deal with Apple to supply both
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