LG Display, the world’s largest manufacturer of LCD panels, has reported record fourth quarter profits of approximately $778.33 million. The company reported that its Q4 2016 profits show an impressive increase of almost 1,400-percent compared to the same period in 2015 and exceeded the expectations of a renowned industry panel by 7-percent. These increased profits were driven by the increase in quarterly revenue that rose by 18-percent and amounted to approximately $6.8 billion. In a statement, the company explained that a combination of rising LCD panel prices and a favorable exchange rate have helped its operations. According to WitsView, the price of television sets larger than 32 inches has been on the rise for a little under a year, and this trend is caused by supply shortages and an increasing demand from consumers who want a large smart TV set. Samsung Display, LG Display’s rival, closed an LCD manufacturing plant in 2016, which has restricted the number of premium, large LCD panels available in the market. Earlier in the year, one of LG Display's officials mentioned that the company was in discussions with Samsung in order to provide its competitor with television displays.
LG Display also manufactures high-quality small LCD panels for numerous smartphone makers including Apple. The company recently said that it is increasing its production of OLED panels and is using the profits gained from its LCD business to fund the new factory lines. However, LG Display is also not ignoring the LCD market and has recently showcased a new generation of high-resolution small panel displays called the QHD+. These displays were designed for smartphones and offer a higher pixel density than current displays complete with a thinner design, reduced bezels, improved sunlight visibility, and a 30-percent reduction in power consumption.
Currently, Samsung is the market leader for OLED panels and has also been increasing its production volumes as the company is reportedly preparing to ship a large number of AMOLED screens to Apple for the new iPhone. The next 12 months could be very interesting for LG as the business evolves its small display production runs and offerings. At the moment, many smartphone manufacturers are switching to OLED panels but this trend might be reversed if there are supply issues in the market. LG could stand to benefit from this either by being able to supply LCD panels or sell OLED panels at increased prices just as the company is increasing its OLED production volumes.