LG Display's Q3 2025 Earnings Call Reveals Shifting Strategies on OLED Investment, IT LCD, and Foldable Panel Markets

Date of Call: October 30, 2025

Financials Results

• Revenue: KRW 6.957 trillion, up 25% Q-o-Q and up 2% Y-o-Y

Guidance:

• Q4: OLED area shipment expected to grow; LCD shipment to decrease as portfolio stays profitability-focused.
• Total area shipment projected to rise low single-digit % Q-o-Q.
• ASP per sqm expected to be at a higher-than-average level but decline low single-digit % Q-o-Q due to mix shifts.
• OLED revenue share Q-o-Q similar; annual OLED share projected at low-60% level.
• Additional workforce improvement program in Q4; onetime cost > last quarter, offset after ~1.5 years.
• CapEx to remain prudent, ~KRW 1tn range below last year.

Business Commentary:

* Revenue and Profitability Growth: - LG Display reported revenue of KRW 6.957 trillion for Q3 2025, showing a 25% sequential increase and a 2% year-on-year growth. - The improvement in operating profit, reaching KRW 431 billion, was marked by a over KRW 500 billion increase compared to the previous quarter and year. - The growth was driven by increased shipment of OLED products and ongoing cost innovation efforts.

• OLED Product Expansion:
• The share of OLED products in total revenue grew to 65% in Q3 2025, up 9 percentage points quarter-on-quarter and 7 percentage points year-on-year.

• This expansion was due to the growing demand for small and medium-sized OLED products and the strategic focus on OLED-centric business structure upgrade.

• Financial Stability and Efficiency:

• LG Display's cash and cash equivalents remained largely unchanged at KRW 1.555 trillion in Q3, reflecting a balanced financial position despite strategic business downsizing.

• The debt-to-equity ratio and net debt-to-equity ratio improved to 263% and 151%, respectively, indicating strengthened financial soundness.

• Small Mobile and Smartwatch Market:

• LG Display's small mobile panel shipments grew by over 20% year-on-year in the first half of 2025, supported by the company's technological leadership and strong customer partnerships.
• The company is now the sole supplier for smartwatch panels following the restructuring of Japan Display Inc.

Sentiment Analysis:

Overall Tone: Positive

• Revenue up 25% Q-o-Q to KRW 6.957tn, operating profit KRW 431bn, EBITDA KRW 1.4239tn (20% margin). Management cites OLED-centric mix and cost-innovation as drivers of a multi-quarter improvement and forecasts continued OLED shipment growth and higher ASP levels while prioritizing profitability.

Q&A:

• Question from Gang Ho Park (Daishin Securities): Does the company believe it has a structure to sustain this improved performance going forward? Has the OLED business structure changed (given good H1 results) and what is the outlook for H1 next year and the full year? If customers push to lower ASP amid macro uncertainties and intensified competition in 2026, how will the company respond and what is the strategy for continued growth?
  Response: LGD expects to sustain improved profitability by shifting to an OLED-centric mix and aggressive cost-innovation; it will use optimized pricing, product-mix improvement and operational efficiency to offset ASP pressure and pursue stable Y-o-Y profit improvement.

• Question from Mingyu Kwon (SK Securities Co., Ltd., Research Division): What is the market reception to the North American customer's new models and implications for LGD's shipments/market share? Outlook for smartphone panel annual shipment and 2026 growth (including potential foldable)? With JDI restructuring making LGD sole smartwatch supplier, what are expected annual volumes and contribution to revenue/profit?
  Response: Reception is generally positive with model-by-model demand variance; LGD is positioned to scale shipments and improve profitability but specific volumes and financial contributions—especially for smartwatch supply—are customer-confidential.

• Question from John Heekyu Yun (UBS Securities): What is LG Display's strategy and readiness for supplying foldable smartphone panels (expected H2 2026 launch by a North American customer)?
  Response: LGD is building R&D and readiness for foldables but will prioritize scaling existing products until clearer market demand emerges, expanding supply only after verifying market acceptance.

• Question from Sun Kim (Kiwoom Securities): Will LGD downsize or exit LCD IT like LCD TV? How is LGD preparing for potential OLED adoption in IT (peers investing in 8.6 Gen OLED)?
  Response: LGD will not exit but will focus LCD IT on high-end/B2B and downsize low-margin SKUs; for IT OLED it is pursuing a two-track approach—targeting high-end monitor demand, monitoring notebook transition, and preparing mass-production using existing infrastructure as market clarity appears.

• Question from Won Suk Chung (iM Securities, Research Division): Given macro uncertainties and LCD competition (including domestic OEMs expanding OLED), what is LGD's mid- to long-term target and strategy for OLED TV?
  Response: LGD targets mid-6 million large OLED panels this year and ~7 million next year, will flex Gen8 capacity (180k cap, 135k utilized) to demand, and focus on cost-innovation and partnerships to sustain OLED TV growth and profitability.

Contradiction Point 1

OLED Technology Investment and Strategy

It involves differing statements on the company's strategic investment in OLED technology and its expected impact on profitability, which can affect investor expectations and confidence in the company's strategic direction.

Are there plans to downsize or exit the IT LCD business? What is the strategy for the IT OLED market? - Sun Kim(Kiwoom Securities)

2025Q3: The investment in new OLED technology amounts to KRW 1.260 trillion over two years, enhancing OLED's competitiveness. - Sung-Hyun Kim(CFO)

What is the OLED technology's current focus and application scope? What performance improvement is expected in H2 given tariff and currency uncertainties? - Dongwon Kim(KB Securities)

2025Q2: The company's performance has improved due to ongoing efforts to upgrade its business structure to be more OLED-centric and cost innovation. - Choi Hyun-chul(VP, Business Control and Management)

Contradiction Point 2

IT LCD Business Strategy

It involves a shift in the company's strategy for its IT LCD business, which directly impacts product offerings and market positioning.

Are there plans to downsize or exit the IT LCD business? What is the strategy for the IT OLED market? - Sun Kim(Kiwoom Securities)

2025Q3: The company maintains focus on high-end LCD and OLED technologies for profitability. No plans to downsize the IT LCD business. - Hong-jae Shin(VP, Medium Display Planning and Management)

What strategies do you have for the large-panel OLED business in 2025 as depreciation ends? - NamKung Hyon(Shinhan Investment & Securities)

2024Q4: We have successfully shifted our IT business to a more focused strategy on large sizes, high resolution, and high value-added display technologies. - Kim Jeong Dong(Team Head of Medium Display Business Strategy)

Contradiction Point 3

OLED TV Market Growth Expectations

It involves differing expectations for OLED TV market growth, which is critical for strategic investment decisions and market positioning.

What is LG Display's strategy and mid- to long-term target for the OLED TV business? - Won Suk Chung(iM Securities)

2025Q3: The company projects OLED TV growth, with a mid-6 million unit level for 2025. OLED's unique value is increasingly recognized, with pricing reaching affordability. - Kim Yong Duck(VP, Large Display Planning and Management)

What strategies do you have for the large-panel OLED business in 2025 after depreciation ends? - NamKung Hyon(Shinhan Investment & Securities)

2024Q4: We have doubled our OLED panel capacity dedicated to TVs in the last two years, and we expect to maintain or increase our market share in OLED TVs in 2025. - Kim Jeong Dong(Team Head of Medium Display Business Strategy)

Contradiction Point 4

OLED Market Structure and Strategy

It involves changes in the company's perceived market structure and strategic focus, which could influence investor and market expectations.

Does the company believe its structure supports sustained performance? Has the OLED market structure changed, and what is the outlook for next year? - Gang Ho Park (Daishin Securities)

2025Q3: The company's performance has improved due to ongoing efforts to upgrade its business structure to be more OLED-centric and cost innovation. - Choi Hyun-chul (VP, Business Control and Management)

Is the high-end IT LCD portfolio still a differentiation area? What are your future strategies and profitability expectations? - Unidentified Analyst (Unidentified Securities)

2024Q2: The company remains confident in its high-end IT LCD product portfolio's differentiation and potential. - Unidentified Company Representative (in-charge of Medium Display Planning and Management)

Contradiction Point 5

Foldable Smartphone Panel Business Strategy

It highlights differing approaches to the foldable smartphone panel business, which could influence the company's market positioning and future revenue projections in the growing foldable smartphone segment.

Can you explain LG Display's strategy for foldable smartphone panels and its technology readiness? - John Heekyu Yun(UBS Securities)

2025Q3: For now, the focus remains on maximizing supply for existing products. - Park Sang-woo(VP, Small Display Planning and Management)

What is the outlook for the smartphone business in the second half? Are there additional growth opportunities expected this year? What is the 2025 shipment forecast for OLED panels used in tablets? - Yong Jin Kim(Kiwoom Securities)

2025Q2: Smartphone business is growing with more than 20% Y-o-Y shipment growth. - Seung-ryong Paik(Head of Small Display Planning and Management)