LG Display has said it’s planning to issue around 142 million new shares as part of a plan to raise 1.92525 trillion won ($971 million). The money will then be used to expand its OLED panel production capacity to meet the growing demand for its advanced displays.
The new shares will be priced at 9,090 won per share, the company said in its financial earnings call this week. It plans to allocate 482.9 billion won of the funds raised towards its operating costs, while 415.9 billion will be spent on building up its production facilities, and 393.6 billion will go towards debt repayment, the Korea Herald reported.
Executives said the plan dates back to December. The large-scale, paid-in capital increase is designed to enhance its competitiveness in the OLED market and grow its business. Doing so requires significant investment, both to develop new technology and to set up the required facilities to manufacture OLED panels.
The company is planning to expand large OLED panel shipment volumes by 20% compared to the last fiscal year, as part of an effort to strengthen its position in the premium TV market that has become increasingly centered on large OLED models. In doing this, LG Display hopes to deliver a notable increase in profitability. At the same time, the company also wants to expand its capacity in the medium-sized OLED sector, where it makes panels for monitors and laptops.
In a statement, the company said it plans to increase its proportion of OLED products in all areas of its business. “From 2024, the large-scale area is expected to expand its customer base, and the medium-scale area plans to start mass production of OLED products for IT devices. In the small area, we expect the shipment volume to increase based on the expanded production capacity in 2023,"
Digging deeper into its plans, LG Display said it will “use 622.2 billion won of the funds raised… for the purchase of raw materials to expand the number of OLED customers and respond to new products.”
LG Display was once one of the world’s biggest players in the LCD display industry, but in recent years it has forsaken that market in favor of OLED displays, where it is widely seen as an industry leader, especially in the large-sized television display segment. The decision to focus on OLED was taken after a strong offensive by Chinese display makers who can build LCD displays at much lower costs.
For years, LG Display was the only company capable of manufacturing larger OLED displays for televisions, but it is now rivaled by Samsung Display, the creator of “QD-OLED” technology. Despite the threat from its rival, LG Display still has a significant lead in the OLED TV market.
In its fourth quarter results, LG Display posted an operating profit of 131.7 billion won, ending a run of losses that extended to seven quarters. The company said it was able to return to profitability thanks to its streamlined business structure and the increased proportion of OLED products within the overall display business.
