lg display struggles for footing after lcd fiasco

Seoul: South Korea LG Display Chief Executive Officer Han Sang-
Beom appeared in front of 1,000 employees at the company\'s main manufacturing plant last spring, and he was determined to send a strong message.
So he put on a pair of goggles, picked up the hammer and broke a liquid --
Crystal display.
This symbolism must not be missed: LCD panels, which have been the backbone of the company for many years, are now thrown into industrial bins.
The future of the company will depend on newer technologies, organic light-
LEDs or OLED.
\"I have never seen him do such a thing,\" said a company official present . \".
\"His performance shows a serious determination to survive the crisis.
However, LG Display\'s dilemma is caused by itself in many ways.
Less than a year ago, due to the company\'s leadership in television, computer monitors and smartphone LCD screens, the company paid additional allowances and bonuses to its employees.
But LG Display misinterpreted the market: China\'s competitors were strong and prices for LCD screens plunged by the beginning of this year.
The huge profits of 2017 turned into huge losses in 2018, and the company suddenly announced in July that it would cut $2.
The capital expenditure planned for 2020 is 7bil.
According to Eikon, the company did not disclose its full or previous targets, but earned about $6 in capital expenditures in 2017.
The company\'s dilemma is a clear example of the risks inherent in a highly competitive technology enterprise that requires a lot of capital investment.
\"LG Display seems to have made a major mistake in its LCD business, and when they see a fast catch-up in China, there is no accurate judgment on the time of exit
Get up, \"Lee Won-
Sik, analyst at Shinyang Securities.
An LG Display official admitted: \"We have known since last year that LCD prices will decline, but we didn\'t expect such a rapid decline . \" He, like everyone else in this article, declined to be named because he was not authorized to talk to the media.
\"Customers have been asking for price cuts, but we didn\'t take action until it was too late.
LG Display made strong profits for five consecutive years after Han took the helm in 2012, and in the wave of Apple\'s LCD screen orders and LG Electronics\'s strong demand for mobile phones and TV screens, LG Electronics has more than a third monitormaker.
LG Display has also begun investing in OLED displays, which, unlike LCD screens, do not require backlighting and offer more natural effects. Looks the color.
The OLED screen also consumes less energy and can be bent and folded.
But the technology is expensive, and most of LG Display\'s revenue comes from LCD monitors.
Until the recent cuts, it also operates eight LCD production lines in South Korea and China.
While LG displays are booming, Chinese companies headed by BOE Technology Group Ltd are investing huge sums in LCD production.
By January 2017, BoE had become the first in the world.
According to market-tracking firm IHS Markit, LCDs has more than 9 inch suppliers, accounting for 22.
Unit shipments of 3% to 21.
LG Display 6%.
This is the first time that Chinese display manufacturers have topped the list.
By the beginning of 2018, prices for many types of LCD monitors were freefall. Prices for 50-
For example, according to IHS Markit, LCD TV panels in August fell 32% from the same period last year.
LG Display\'s Display arm of South Korea\'s big rival, Samsung Electronics, began pulling out of the LCD a few years ago, shutting down South Korea\'s old LCD production line from 2010, according to a Samsung monitor official.
The company currently has only two LCD factories in South Korea and only one in China.
But the LG Display was flat.
The LCD capacity is now being frantically cut.
It has shut down three LCD production lines since last year and has abandoned plans for a new one.
The company also launched an \"emergency management system\" in April, and employees were told to use cheaper flights and reduce group meals, the company sources told Reuters.
Cash flows are negative 838, which has become a concern. 2 billion won (US$743. 93mil)
According to Eikon, the second quarter was negative for three consecutive quarters.
Sources at the three companies said the company had no plans to cut jobs because of concerns about the brain drain to China, but some employees were frustrated by the cuts. —