Korean display and TV majors slip into slump amid economic downturn

[Graphics by Song Ji-yoon]

South Korea’s display and TV majors are projected to have slipped into losses due to slump in TV demand.

According to market consensus compiled by financial data firm FnGuide on Monday, LG Display is projected to have incurred an operating loss of 505.6 billion won ($351.67 million) in a sharp reversal from a profit of 528.9 billion won a year ago.

Sales of premium TVs have been hit hard by soaring inflation and economic uncertainties. Display revenue largely comes from TVs.

According to Taiwan’s market researcher TrendForce, the world’s TV shipments this year are estimated to be around 202 million units, down 3.8 percent from a year ago. The projected figure is the lowest in 10 years.

KB Securities analyst Kim Dong-won projects LG Display operating loss at 619.3 billion won in the third quarter, given sagging demand in the LCD and OLED market and a decrease in the average selling price.

LG Display swung to its first loss of 488.3 billion in two years in the second quarter due to China’s lockdowns. The market consensus for its annual deficit amounts to 1.2 trillion won.

TV makers also would be presenting disappointing figures.

The figures would be confirmed when Samsung Electronics and LG Electronics unveil detailed business performance for the third quarter later this week.

Samsung’s TV division profit is estimated at 300 billion in operating profit, slightly down from the second quarter’s 360 billion won. LG’s home entertainment division responsible for TV manufacturing will likely report a wider deficit in the third quarter after an operating loss of 18.9 billion won in the second quarter, which was the first in seven years.

Kiwoom Securities estimated its operating loss from home entertainment at 55.9 billion won for the third quarter on subdued demand in Europe from energy crisis and high inventory buildup in North America.

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