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Falling TV sales saw record losses for LG Display after the company struggled to offset the effects of slowing consumer demand. LG Display is part of LG that makes screen panels, and is the only supplier of quality OLED panels to other TV manufacturers – almost all the best OLED TVs use its displays, except those that use QD-OLED (made by Samsung Electronics ).
The South Korean manufacturer published its financial results for Q3 2022 earlier this week, with the report revealing an eye-watering loss for the quarter of more than $540 million.
This number marks a significant difference from the more than $370 million in profit the company recorded a year earlier.
LG Display points to Russia’s attack on Ukraine, the growing energy crisis, rising prices and declining demand due to the pandemic behind the numbers.
The company is also facing increasing pressure from Chinese display manufacturers who are seeking increased market share.
But it appears at the consumer level where the issues with its OLED TV business currently lie, with cash-strapped consumers choosing to hold fire by splashing out on high-end TVs.
The company is the world’s largest supplier of OLED panels while also one of the largest LCD manufacturers, and has been hit hard by falling prices for both types of panels.
Most importantly, this week’s financial report emphasized that the demand for OLED panels and TVs has fallen to “unprecedented levels”, with very low sales in Europe.
The company now says it plans to cut its 2022 investment budget by more than $700 million while streamlining OLED production lines to keep up with demand.
The report adds that LG now aims to accelerate the reduction of LCD capacity in China, and accelerate its transition to OLED technology in general.
Analysis: LG’s finances look bleak – but there must be light at the end of the OLED tunnel
LG Display’s balance sheet looks worrisome after the big loss it announced this week, but the tough report reveals a few things we already knew.
Overall TV demand is surprisingly low right now amid the cost of living affecting almost every corner of the world which has left consumers feeling very undervalued.
We also knew that investment in OLED production next year was expected to be small, which would allow the company to stabilize its fleet without affecting tons of additional investment.
The most likely scenario for consumers is that something will happen to rekindle interest in OLED TVs next year, and with the cost of living problem, that will require a drop in prices for consumers.
LG Display didn’t come up with much cheaper OLED panels in 2022, which meant that the budget OLED TV market was limited to the LG A2 and the Philips OLED707. Vizio and Hisense are both offering new low-cost OLED models in 2022, for example.
That now seems to have been a mistake, leading us to speculate that next year may see the depth of OLED TV reduced from a wide range of features. And in the meantime, there’s a good chance we’ll see some big Black Friday sales in hopes of giving technology a boost in people’s minds going into next year.
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