- A recent report by the Korea Herald pointed out that Korea-based display panel makers might face losses in Q1 2020
- Decline in demand of TVs has been cited as a major reason
- A lot of TV brands source display panels from South Korea and China-based companies
China-based display panel makers recovering from Covid-19 decline might cause a dent in the business of Korea-based display panel makers. A recent report published by the Korea Herald mentions that Korea-based Samsung and LG are expected to face losses due to the slowdown in Q1 2020.
The report mentions that Samsung Display Company, the display manufacturing affiliate of Samsung Electronics, was projected to have posted an operating loss of $378 million. Samsung had racked up 6.3 trillion won in sales during Q1 2020 (January to March 2020) period. Similarly, LG Display Company, an affiliate of LG Electronics, is estimated to have suffered operating losses of nearly 388 billion won during the period. LG Display had logged 5.1 trillion won in sales during the period.
It is to be noted here that a lot of TV brands source display panels from South Korea and China-based companies. As a matter of fact, some Korea-based companies have their display panel manufacturing sites located in China.
China vs Korea in display panel business?
While a sharp decline in demand of smartphones and TVs may have caused a dent in the business during Q1 2020, the demand is said to pick up rapidly once the markets reopen. However, it is believed that the China-based display panel makers have already started recovering quickly from the pandemic. Some of these have also started supplying display panels to their respective clients.
Korea-based Samsung on the other hand, had last year stated that it was shutting LCD panel manufacturing at one of its facilities. The same was being done as Samsung was turning its focus towards manufacturing quantum-dot display panels. Korea-based LG has one of its OLED panel manufacturing lines in China. This facility had reported delay in productions in China due to Coronavirus lockdown.
If the Korea Herald report is to believed than Samsung and LG will face more losses in the ongoing quarter due to lockdowns in various big markets. The likes of India, Europe and North America are following strict lockdown measures at the moment.
“LCD panel prices are to start dropping in the second quarter due to a plunge in TV demand and a supply recovery of Chinese LCD makers,” Kwon Sung-ryul, an analyst at DB Financial Investment was quoted by the Korea Herald.
