OLED TVs are in trouble – but that could be good news for cheaper prices
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Due to a slump in TV sales, LG Display posted record losses as the company struggled to offset the effects of dwindling consumer demand. LG Display is the part of LG that makes display panels, and it is the only supplier of standard OLED panels to other TV manufacturers – almost all the best OLED TVs use their displays, except those with QD-OLED (made by Samsung Electronics) .
The South Korean manufacturer released its financial results for the third quarter of 2022 earlier this week, with the report revealing a dazzling operating loss for the quarter of more than $540 million.
That figure stands in stark contrast to the company’s more than $370 billion in profit a year earlier.
LG Display pointed to the Russian invasion of Ukraine, the worsening energy crisis, rising inflation and declining demand for the numbers after the pandemic.
The company is also facing increasing pressure from Chinese display manufacturers who have a growing market share.
But it seems at the consumer level where the problems with its OLED TV business currently lie, with cash-strapped shoppers choosing to keep fire on splashes on a more expensive TV.
The company is the world’s largest supplier of OLED panels and also one of the largest for LCD panel manufacturing, and has been hit hard by falling prices for both types of panels.
Crucially, this week’s financial report highlighted that demand for premium OLED panels and TVs had fallen to “unprecedented levels”, with sales in Europe particularly low.
The company now says it plans to cut its 2022 investment budget by more than $700 million while flexibly operating its OLED production lines to meet demand.
The report adds that LG now wants to accelerate the reduction of LCD capacity in China and accelerate the shift to OLED technologies in general.
Analysis: LG’s financial numbers look bleak, but there should be OLED light at the end of the tunnel
LG Display’s balance sheet looks somewhat worrisome after the dramatic losses it announced this week, but that sobering report reflects a few things we already knew.
General demand for TVs is unsurprising right now, amid a cost of living crisis that is affecting almost every corner of the globe, leaving consumers feeling very price sensitive.
We also knew that investments in OLED production next year were expected to be minimal, which should allow the company to stabilize its ship if it doesn’t make tons of additional investments.
The big potential benefit to consumers is that something needs to be done next year to rekindle interest in OLED TVs, and in a cost-of-living crisis, that should pretty much mean a price drop for consumers.
LG Display was not very progressive with cheaper OLED panels in 2022, leaving the budget OLED TV market limited to the LG A2 and Philips OLED707. Vizio and Hisense, for example, did not offer new low-cost OLED models in 2022.
That now appears to have been a mistake, allowing us to predict that next year it could see more discounted OLED TVs from a much wider range of brands. And in the meantime, there’s a good chance of seeing some huge Black Friday OLED TV deals, hoping to give the tech a boost in people’s minds heading into next year.