LG Realigns OLED Lighting Business under Display Arm

LG announced subsidiary LG Display will be taking over LG Chem’s OLED lighting business on Monday, as part of its OLED realignment strategy reported The Korea Times and Yonhap News.

The Korean electronic group’s management approved selling LG Chem’s OLED lighting unit to LG Display on Dec. 15 for KRW 160 billion (US $142 million).

LG Chem's OLED lighting product. Through an internal deal, the company's OLED lighting business has been sold to LG Display. (Photo courtesy of LG Chem)

"The latest deal will help LG Chem further strengthen its ability to handle the OLED material business as LG Display has been successful in managing OLED-embedded applications," said C.S. Song, head of LG Chem's public relations office.

The internal deal was formed after LG Chairman Boo-moo Koo asked top management of the conglomerate’s subsidiaries to share patents.

A couple days ago, the chairman demanded affiliates to review their main businesses, research projects, manufacturing and marketing strategies from a “zero-base,”and to change their way of thinking about situations.

LG’s shift to the OLED business mainly came after it suffered a “systematic decline” in smartphone profits. Contending Chinese mobile vendors’ lower priced products squeezed LG Electronics out of the global top five rankings during second quarter of 2015.

Weak panel prices have also hit another company key unit LG Display, which is projected to post a weak third quarter performance, due to waning panel prices. The situation is expected to impact component unit LG Innotek because its performance is in sync with top customer LG Electronics.

"It's no surprise to see moves by LG affiliates to realign their businesses," said a LG executive. "Rather than expand its footstep in volatile business-to-consumer businesses, LG plans to focus more on business-to-business (B2B) businesses. OLED is the kind of thing matching up the emerging internal trends."

With OLEDs, LG Electronics is increasing investment in car infotainment systems. LG noted the OLED lighting business might take off in a few years’ time. “LG will be quick, faster and adaptive in emerging technologies,” said another executive.

LG hopes its multi-billion investment can encourage the adoption of OLED displays, especially large screens that can be used for both TVs, automobiles and signs.

The Korean manufacturer aims to become the largest player in OLED displays for flexible curved screens in smaller devices, such as wearables.

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