2020 hasn't opened in a great way for LG Display. The South Korean manufacturer and OLED TV panel maker has been hit hard by low demand in the past few quarters, with the company's revenue now down 20% from this time last year.
That would be more manageable if LG Display wasn't making a loss in early 2019 too.
The double-dip appears to be down to the current lockdown across much of the globe, with non-essential retail stores largely shut and market uncertainty (including large numbers of layoffs) likely leading consumers to be a bit more wary of hefty gadget purchases – or at least directing their cash flow towards more pressing matters, like takeaway apps or TV streaming services.
As gadget sales fall, so does demand from their manufacturers – and we've seen both LG and Samsung make moves to shutter LCD panel production in a bid to cope with decreased demand.
In LG's latest earnings report, a spokesperson confirmed that “We expect volatility in demand to increase down the road, as industry sectors are impacted by the COVID-19 outbreak. The difficult situation will inevitably linger, although it is expected that demand in IT products will grow due to stay-at-home orders and consequent surge in online activities."
Not looking picture perfect
We'd previously reported on a reduced forecast for OLED TV sales in 2020, at least partially due to disrupted production in South East Asia after the initial outbreak of Covid-19.
While OLED TVs offer incredible picture quality, it seems like indoors-living is pushing TV purchases in a different direction – with sales for small TVs skyrocketing as viewers newly stuck indoors with their families, partners, or flatmates attempt to cater to their new living conditions.
It's a different picture for streaming services, with Disney Plus having seen explosive growth – especially in the UK, where it launched in late March only days before the nation's lockdown measures were put into effect. The likes of YouTube and Netflix have joined it in reducing streaming resolution across Europe too, to cope with increased demand for bandwidth.