The heads of South Korea’s two major display companies simultaneously expressed their determination to go all-out for a second-half earnings rebound and to maintain a technological super-gap, despite concerns over ‘chipflation’ (chip + inflation) triggered by soaring semiconductor prices. Samsung Display presented defending its foldable market dominance as its core strategy, while LG Display proposed stabilizing its profitability through cost innovation and next-generation technologies.
Samsung Display President Lee Cheong and LG Display President Jeong Cheol-dong outlined their second-half business plans on July 22 at the ‘K-Display 2026’ exhibition, which opened at COEX in Seoul’s Gangnam district, and during second-quarter earnings announcements.
Direct Hit from Chipflation… “Second Half Won’t Be Easy”
Both presidents identified weakening set (finished product) demand and pressure to lower panel prices, triggered by rising memory semiconductor prices, as the biggest common risk. Meeting with reporters, President Lee diagnosed, “The business situation in the second half will be difficult due to chipflation,” adding, “Smartphone [demand] is decreasing significantly, and IT OLED volumes are also falling considerably.” He further noted, “As overall volumes decrease, price pressure on components and displays is coming in very strongly.” The explanation is that the surge in memory prices is pushing up smartphone and PC prices, fueling a demand slowdown, and the cost burden on set manufacturers is directly translating into demands for panel unit price cuts.
President Jeong also acknowledged the cost burden from rising raw material and component prices, while stating, “We are being affected, but it’s at a manageable level.” However, LG Display CFO Kim Seong-hyun stated during a conference call that day, “We will continue intensive cost innovation to improve profitability,” revealing a strategy to absorb the shock through cost improvements.
Samsung Display “Defending Foldable Dominance,” Countering Chinese Pursuit with 50 Years of Tech
President Lee expressed strong confidence in the foldable OLED market, presenting it as a breakthrough to overcome the crisis. He stated, “Excluding Chinese customers and companies, Samsung Display holds an overwhelming share in the foldable market,” adding, “I believe our technology is far superior in terms of quality, durability, and display characteristics, and it will continue to be so.” He particularly mentioned Samsung Electronics’ launch of new form factor products and news that a major U.S. customer is preparing a foldable product, expressing anticipation that “a new dimension of the foldable market will open starting this year.”
Regarding the pursuit by Chinese display makers, he did not hide a sense of crisis but declared a head-on breakthrough. President Lee said, “Chinese companies are continuously investing, and their production volume is expected to keep increasing,” noting, “This is a very significant challenge for us.” Nevertheless, he emphasized, “South Korea’s display industry has over 50 years of history and has maintained the world’s top position almost every moment; we cannot afford to be pushed aside now,” adding, “We will push forward with OLED and continue preparing subsequent technologies to win.”
On competitor China’s BOE expanding its contact points with Samsung Electronics, he commented, “From BOE’s perspective, Samsung Electronics can be an important customer, so it’s a natural phenomenon for them to try to meet,” adding, “Ultimately, what matters is preemptively preparing with technology and pricing that satisfy the customer.”
Investment plans are also proceeding without disruption. Regarding the 67 trillion won (approximately $45.3 billion) investment in South Korea’s Chungcheong region, President Lee stated, “It needs to be done right away, and we are preparing now,” affirming, “Since it’s a commitment we made, we will naturally proceed immediately.” On the progress of mass production for 8.6-generation IT OLED, he expressed confidence, saying, “The first glass has been input and is currently flowing well through the fab,” adding, “It will lead to mass production without major issues.” Securities firms estimate Samsung Display’s first-half operating profit at around 1 trillion won (approximately $675.4 million) and annual operating profit at 3 trillion to 4 trillion won (approximately $2.0 billion to $2.7 billion).
LG Display “Second-Half Rebound,” Betting on Next-Gen Technology
LG Display aims to solidify its annual profitability through a second-half earnings rebound. The company announced that day that it recorded consolidated revenue of 5.61 trillion won (approximately $3.8 billion) and an operating loss of 107.7 billion won (approximately $72.7 million) for the second quarter of this year. On a cumulative first-half basis, it achieved revenue of 11.15 trillion won (approximately $7.5 billion) and an operating profit of 39 billion won (approximately $26.3 million), successfully swinging to a profit from an operating loss of 82.6 billion won (approximately $55.8 million) in the first half of last year.
The second-quarter results reflected one-time costs of approximately 240 billion won (approximately $162.1 million) due to workforce efficiency measures, including voluntary retirement. President Jeong stated, “Excluding one-time costs, the actual business structure is in an operating profit trend,” adding, “Given the nature of the display industry, the second half is better than the first half, so second-half performance will also be better than the first half.” CFO Kim also emphasized, “Over the past four to five years, we have chronically posted losses in the second quarter, but this year, excluding one-time costs, we recorded a profit,” noting, “The biggest significance is that our core business posted a profit even in the off-season.”
LG Display has set OLED business expansion and cost innovation as the two pillars of its second-half growth strategy. In the TV business, it plans to counter low-price offensives from Chinese companies by leveraging technological competitiveness such as picture quality and power efficiency, and to increase panel supply in line with the trend of major customers like Samsung Electronics and LG Electronics expanding their OLED TV lineups from premium to mid-to-low price ranges. The gaming monitor market has also been identified as a new growth engine. The company forecasts that the share of OLED monitor shipments will expand from the low 10% range last year to around 20% this year.
Next-generation technology development is also accelerating. President Jeong disclosed that the company is preparing ‘FLiPP’ technology, which applies photolithography as a next-generation method for OLED deposition technology. This is the method referred to in the industry as ‘eLEAP,’ named after Japanese company JDI’s technology. He also added that the company is preparing glass interposers for semiconductor packaging from various angles by researching glass-related application technologies. LG Display’s capital expenditure this year is expected to be in the mid-to-high 2 trillion won range (approximately $1.4 billion), a significant increase from the mid-1 trillion won range last year. President Jeong stated, “We will continue to invest within the scope of available resources to provide differentiated value to our customers.”