LG may be forced to halt production of the LG G5 after one of its suppliers went bankrupt. The South Korean components manufacturer Hallacast reportedly filed for bankruptcy in late 2016, leaving LG without a back casing supplier. This component of the LG G5 was previously manufactured by BYD and Fine Technix in addition to Hallacast, but the Seoul-based phone maker agreed to an exclusive deal with Hallacast in January, reportedly not long after Hallacast filed for statutory management, South Korean outlets reported on Monday. It's unclear whether LG was aware of the fact that Hallacast filed for bankruptcy on December 29th, 2016, but the company could be facing major production issues in the coming months if this report is true.
While the LG G5 wasn't the huge commercial success that LG was hoping it would be, the South Korean phone maker still wasn't planning to discontinue its 2016 flagship in the coming months. Recent reports suggest that the company intended to continue producing the modular phone until June as it was planning a price decrease that would make the LG G5 a viable alternative to the upcoming LG G6. The Seoul-based phone maker was allegedly planning to produce 220,000 units of the LG G5 in 2017. If Hallacast goes bankrupt and ceases its operations, LG will either be forced to go back to BYD and Fine Technix or discontinue the device sooner than expected.
The LG G5 was unveiled last year at the annual Mobile World Congress, and its successor is expected to follow suit and debut in Barcelona next month. The South Korean tech giant is reportedly looking to beat the Galaxy S8 to the market, which is why the LG G6 is rumored to launch in early March. While the successor to the LG G5 will likely ditch the modular design, the company apparently still believes this concept can find an audience if offered at a reduced price tag. Due to that state of affairs, this latest turn of events could easily spell trouble for LG whose struggling phone division is currently doing everything it can to turn things around and stop recording quarterly losses.