Although LG Display's inventory assets are increasing and demand is sluggish, investment in OLED is strengthening.

 ▣ Summary

▶ LG Display's inventory assets increased 73.4% year-on-year to 4.7224 trillion won as of the first half of the year.

    By item, work-in-process goods (unfinished goods) increased the most with 78.3%, followed by final products (76.4%),

    raw materials (70.4%), and stored products (34.4%).

▶ According to LG Display, "The increase in inventory assets is due to the Shanghai shut-down, where major customers

    are located. However, it is expected to be back to normal soon in the second half of the year in line with China's

    economic recovery."

▶ LG Display spent 1.1885 trillion won (9.8 percent) in R&D in the first half of the year which is increased by 16%

    compared to the same period last year. The number of employees also increased 11% year-on-year to 29,445 and

    plans to invest 3.3 trillion won over three years from last year to 2024 to expand production lines for small and medium

    OLEDs. On the other hand, it is planning to reduce the portion of LCDs that used to account for 65% of existing sales

 

▣ Ducky's Edge

▶ According to Ducky’s interview with LG Display, inventory growth is larger than expected and it is unlikely to recover

    until the first half of next year due to the global economic slowdown in addition to China's shut-down, and a deficit of

    800 billion won is expected in 2022

▶ LG Display's small and medium-sized models rely on Apple's iPhone, but it is currently in emergency response

    because it has not been approved for the qualification from Apple for its next Pro model. About 8% of its quota from the

   early iPhone14 production allocation has already been transferred to Samsung.

▶ Although additional investment in small and medium-sized lines is being made for IT investment, set-up and mass

    production operations are likely to be delayed followed by set-up delay due to increased deficit

▶ As additional investment in Samsung Display's QD-OLED line is still unknown, the possibility of LG Display's expectation for market expansion has decreased, and OLED TV's survival strategy is required

 

▣ Ducky’s Additional Info.

    ▶ Current status of LG Display TV factory utilization rate

        Guangzhou(E7) : about 30%

        Paju(E4): about 50% from Sep to Dec in 2022