Display market rebounds on the back of rising LCD prices

LG Display Co.’s automotive display. [Courtesy of LG Display]

The display industry is showing signs of recovery on the back of rebound in the prices of liquid crystal display (LCD) panels that had dropped due to a decline in demand for TVs, combined with rapid growth in the automotive display market.

According to market research firm TrendForce on Wednesday, the prices of LCD TV panels of all sizes have started to increase in the latter half of August. The prices rose 1.5~2.8 percent versus the first half of August depending on the size.

LCD panel prices began to pick up in March this year. The average prices were up by 14.7 percent in the third quarter of this year compared to the previous quarter.

The price of 32-inch TV panels gained the most at 14.7 percent, followed by 55-inch at 14.1 percent, and 65-inch at 13.6 percent.

Prices of information technology (IT) panels applied to computer monitors and laptops are also on the rise. According to industry sources, prices of monitors of all sizes have slightly increased after 9 months.

The upward trend in LCD prices particularly bodes well for South Korea’s LG Display Co., which has incurred losses for 5 consecutive quarters.

Samsung Display Co. withdrew from the LCD business due to aggressive low-cost strategies by Chinese competitors but LG Display continued to produce LCDs.

LCD TV panels account for about 10 percent of its entire sales, and IT LCDs about 40 percent. A rise in panel prices work in favor of boosting sales.

“With improving demand, TV panel prices are expected to continue rising for the time being,” said Kim Hyun-soo, an analyst at Hana Securities Co. “Considering that monitor panel prices have slightly risen across all sizes, IT panel prices could also rise after a period of stabilization.”

The rapid growth of automotive displays is also anticipated to contribute to the industry’s recovery.

As autonomous driving technology advances, there has been increasing demand for infotainment, but this field requires high technological expertise, making China’s low-cost strategies less effective.

According to market data tracker Omdia, the automotive display market is projected to grow to about $12.5 billion by 2027 from $8.7 billion in 2022.

Currently, LG Display holds the top position in the automotive organic light-emitting diode (OLED) market. The key product is P-OLED, which combines tandem OLED with a plastic substrate.

With actual orders expanding, LG Display is expected to swing to a profit in the fourth quarter of this year.

According to a consensus forecast by local financial data tracker FnGuide, LG Display’s operating profit for the fourth quarter of this year is projected to reach 86.4 billion won ($65 million).