Author: Little Fox
[TechWeb] Sept. 18, according to foreign media reports, LG Display, a Korean LCD panel manufacturer, announced voluntary layoffs for Korean production line employees on Tuesday to reduce its domestic staff as the company's financial losses soared. At present, it is uncertain how many of the 23,000 South Korean production line employees will be affected.
Unable to compete with China's cheap LCD panels, LG Display has replaced its CEO. It happened the day before the company announced the layoffs, when Han Sang-beom, its chief executive, resigned after an emergency board meeting. Today, the company has appointed Jeong Ho-young, president of LG Chem, as its new CEO.
LG Display is one of the largest manufacturers and suppliers of thin film transistor liquid crystal display (TFT-LCD) panels, organic light emitting diodes (OLED) and flexible displays in the world. The basic technologies of new display technologies such as TFT-LCD and flexible display are all semiconductor technologies, which can be collectively called semiconductor display. Semiconductor display can be defined as the display technology that controls each minimal display unit independently by semiconductor devices.
LCD TV panel market is oversupply due to the influx and rapid expansion of LCD competitors from China, which has depressed panel prices and slowed global demand for panels, which has led the company to struggle with losses. According to foreign media reports, the company's operating loss expanded to 369 billion won ($313 million) in the second quarter of this year.
In order to deal with the competition from the Chinese LCD panel manufacturer, LG Display is in the process of turning to the production of the next-generation OLED panel from the main production LCD panel.
On July 23, LG Display said it would invest 3 trillion won ($2.6 billion) in its OLED panel production line in South Korea, and it would continue to consolidate its leading position in the OLED TV market. In early September, the company announced that its 8.5 generation OLED panel production line in Guangzhou had been put into operation.
LG Display is located in Guangzhou's 8.5 generation OLED panel production line. It is the third production line established in Guangzhou, China, following the module factory and LCD production line. It is also the first large-scale OLED panel production line built outside Korea.
Many people believe that Apple's new iPhone released last week will boost demand for OLED panels. But given that global smartphone sales are slowing, this may not be enough to support LG Display's OLED business.
Now, in order to cope with the shortage of panels from China, which has led to lower returns and lower panel prices, the company has turned to emergency plans and invited applicants to participate in early retirement plans. The move is said to have taken place on the occasion of the company's gradual withdrawal from LCD business.
LG Display has 59,000 employees worldwide, including in China. In the coming weeks, the company plans to accept voluntary redundancy applications from Korean employees who have worked for the company for five years or more.
The extent to which LG Display's layoffs will compensate for the losses is uncertain, but the new leader may give the company more hope. Jeong Ho-young will officially become CEO of LG Display after the shareholders'meeting in March next year. He will face many challenges in helping the company solve various problems. (Little Fox)