Because of losses from #LCD TV panels, #LGD has shut down some of its Korea-based Gen 7.5 and Gen 8.5 TV panel production lines since 4Q19. As a result of this production capacity adjustment, LGD’s shipment of LCD TV panels in terms of the company’s product output saw a decrease from 20% in 2018 to 16% in 2019.
The primary goal of LGD’s TV panel business is to focus on #OLED, instead of LCD, production. This strategy would certainly call for the termination of its domestic TV panel production in Korea. However, whether the company can shut down its Korea-based fabs in 2020 depends on three factors:
1. Can the growth in LGD’s OLED TV panel business compensate for the loss in its LCD TV panel business and ensure a smooth transition for the company while maintaining a steady revenue?
2. LGD produces 75-, 82-, and 86-inch high-end panels in its Korea-based Gen 7.5 fab. Will LGD maintain its competitiveness as it shifts to MMG (multi-model glass) production in its Gen 8.5 fab in China?
3. LGD aims to cut costs via downsizing by closing down its fab in Korea. However, downsizing means facing enormous blowback from labor unions. This can create heavy resistance for LGD as it aims to close down the fab on schedule.
