By Kim Yoo-chul
| CEO Han Sang-beom |
Increased brand awareness, the capability to produce high-quality products along with on-time delivery, output commitment and merits in pricing are the keys to achieving differentiation from others, according to the executive.
"My key task is how to beat the industry's old pattern of cycles of oversupply and undersupply, leading to repeat boom, bust cycles and the seasonal changes. I believe sustainability will be coming after we continuously produce premium products," Han Sang-beom, who leads the company, said in a news conference last week with the Korean media at the FourPoints Hotel in the southern Chinese city of Guangzhou.
The top company executive was in the city with LG Chairman Koo Bon-moo, LG Chief Operating Officer Cho Jun-ho, LG Electronics Chief Operating Officer Kim Jong-shik, LG CNS CEO Kim Dae-hoon and trade ministry officials from South Korea and China to participate an event to mark the operation of LG's mega display complex, here.
Han said that the Guangzhou factory will mainly produce TV panels supporting ultra high-definition (UHD) viewing quality as he expects the so-called UHD TVs to awaken idling demand for value-added products from Chinese consumers.
While the display panel industry is still volatile and cyclical according to economic moves and as the products are being commoditized due to a lot of market players, the CEO Han said LG has differentiated itself from its chief Taiwanese and Chinese rivals in terms of both product quality and pricing.
According to his observation, a solid partnership with leading Chinese TV makers is another factor that helps the company maintain its panel business on a stable manner. China has become the world's biggest TV market since late 2011.
"LG brands are stronger in China as we've been consistent in solidifying partnership with Chinese companies. While local Chinese companies are improving production yields ― defect rates ― LG is still better," he said.
Meanwhile, Han said its new focus on automotive displays has begun yielding returns as it signed agreements with top-tier global carmakers to sell its displays to be used in dashboard, navigations and seats.
"By 2016, revenue from the automotive display business will be doubled from last year," he said.
The executive denied increased worries over growing signs of the industry's oversupply as demand for large-sized televisions remains healthy, offsetting fears of oversupply.
"Demand and supply will be well-balanced this year," said the CEO, adding the outlook for the remainder of 2014 will be positive. LG Display supplies displays to be used TVs, tablets and smartphones to top-tier consumer electronics companies.
Han said LG Display is in talks with "some clients" to possibly sell its "quantum dots (QD)" screens ― a variant of LCD ― at a time when its chief local rival Samsung Display is pushing for QD panels.
LG is fostering OLED screens for TVs, while the Samsung's display affiliate aims to further develop QDs because QD screens provide clearer viewing quality that is similar to OLED but with cheaper prices.
"The QD panel is not something new. LG Display has some solutions for QD panels. We are discussing those panels with clients though I can't specify who we are talking to," the CEO responded.