The worries of LG Electronics, the only OLED TV maker in the world, are increasing over its OLED TV inventories. Although its sales of OLED TVs increase slowly, the growth pace is not strong enough to consume all the panels that it is supplied from LG Display.
According to industry sources on April 19, LG Electronics’ sales of 55-inch full HD-class OLED TVs during the Lunar New Year’s Day holiday, the largest shopping season in China, remained lower than expected at about 1,200 units.
In other words, OLED TVs accounted for about 1 percent in total sales of premium TVs in China. During the same period, 165,000 units of premium TVs were sold in China according to market research firm DisplaySearch.
Due to the lower-than-expected sales, LG Electronics is having trouble with inventories. If inventory goes up, it is needed to reduce it by increasing marketing cost. Another option is the reduction of panel output at LG Display which is produced by 600,000 units per year. This option, however, is not feasible since it would cost more if LG Display reduces its capacity utilization.