Company overview

LG Display supplies the screens that customers build into finished products, rather than selling those products itself. Panels for notebooks, monitors and tablets, together with mobile and other panels, bring in most of its revenue; smartphones dominate the latter category. It also supplies television and automotive panels. OLED panels now generate most of its revenue, and it has stopped producing TFT-LCD television panels while continuing to make LCD panels for other uses.

The company negotiates prices and quantities with end-product brands, including LG Electronics, but often delivers panels to—and sometimes invoices—the assemblers those brands designate. Most sales come from purchase orders placed only a few weeks before delivery. Customer forecasts help it plan production but do not guarantee orders. Sales are highly concentrated: one unnamed customer supplies a majority of revenue, and LG Electronics and its affiliates are another material source.

Earnings depend on customer orders keeping costly factories busy and on manufacturing costs falling fast enough to keep pace with declining panel prices. Industry overcapacity gives customers more leverage over prices. LG Display also needs third-party technology licenses for certain production processes; losing access to those licenses could prevent it from making or selling key products.