LG Display is accelerating its plans to quit LCD display panel production amid growing competition from Chinese firms. 

Reports from Korean media suggest the company will drastically cut back on its input of glass substrates at its LCD assembly lines in Paju, South Korea and Guangzhou, China, slashing LCD TV panel output by more than 10% in the second half of the year compared to the first six months. 

LG Display won’t entirely withdraw from the LCD TV panel business, though it will step up production of OLED TV panels. 

The company’s cross-town rival Samsung Display has already announced plans to quit the LCD TV panel business completely by the end of the year, due to worsening profitability. 

Both companies have faced significant competition from Chinese rivals that are able to churn out large quantities of LCD TV panels at more competitive prices, pushing market prices down. Neither LG Display nor Samsung Display can match those rivals due to the higher costs they face. 

Omdia reported recently that the average 55-inch LCD TV panel price declined by 30% from six months ago to just $105 in April. It has also forecast a further price decline this month. 

LG Display’s problems are exacerbated by the fact it has been running at a loss for several years due to subdued LCD panel prices. 

“It is getting harder to manufacture LCD panels above production costs amid intensified competition with Chinese companies,” an anonymous source told the Korea Economic Daily. “Samsung is giving up its LCD panel development and production because it sees panel price declines are not temporary.” 

Chinese manufacturers, led by BOE Technology Group and China Star Optoelectronics Technology (CSOT) have been rapidly increasing their market share in the LCD TV panel industry. At the end of last year, BOE was positioned as the world’s leading LCD TV panel maker with a 26.3% market share, KED reported. 

During the mid-2000s, LG Display and Samsung Display dominated the global LCD TV panel market, accounting for more than half of all global shipments. 

The Korean firms are instead switching their focus to OLED display panels, where they have a technological advantage over their Chinese competitors. Data from Omdia shows that LG Display commands 99.7% of the OLED TV panel market, with Samsung Display having the remaining 0.3%. 

LG Display has been accelerating OLED TV panel production for years, adding new panel sizes to its output such as the new 42-inch displays it launched this year. 

Samsung Display is more competitive in the small-sized OLED panel market, producing displays for smartphones and laptops. However, it is aiming to take on LG in the OLED TV display market with the launch of its new QD-OLED TV panels this year.