updated 10:10 am EDT, Mon August 29, 2011
LG cuts capital TV costs in switch to mobile
LG Display explained Monday that it would cut its capital spending by exactly a quarter. The company explained the move as necessary with smartphones and tablets cutting into demand for TVs. It planned to spend a comparatively modest $2.8 billion and had dropped plans for an extra factory, since existing plants would have to take over.
The move follows steps from Taiwan-area firms AU Optronics and Chimei Innolux and parallels an overall drop in demand for TVs. LCD TV demand grew just six percent in the spring and may actually decline in the fall. Explanations for the drops outside of mobile devices have varied, but they have usually revolved around a combination of a very saturated market, economic concerns reducing unnecessary expenses, and a lack of enthusiasm for 3D.
LG Display may pin much of the shift on Apple. It serves as one of the key manufacturers for screens on both the iPhone 4 and iPad 2, and it may be instrumental to the 2048x1536 iPad 3 display rumored coming in early 2012. LG does have both its parent company's mostly Android-led smartphones and its own tablet, the Optimus Pad, also contributing to some of the production swap.
LG as a whole has been struggling, with its smartphone group stemming losses but not reversing drops in TVs and computers. The firm was one of the few in the area not to overcommit itself to netbooks and lose to the iPad but has faced an upsurge from its Korean rival Samsung.