South Korea's LG Enters The Fourth Generation Of Leadership, Industrial Structure Or Restructuring
- Jul 05, 2018 -

  

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Recently, the late president of LG Group, the eldest son of Benmao, and the fourth generation of the group's heirs, Guangguang, became directors of the group's board of directors at the extraordinary general meeting, and later elected as group president at the board meeting. This event marks the official ushered in the fourth generation of leadership of the Korean treasury LG Group.


The industry believes that the company will focus on developing new growth projects with promising future prospects and strengthen B2B sales among enterprises, including artificial intelligence (AI), Internet of Things (IoT), robots, and self-driving vehicles.


South Korea's LG enters the fourth generation of leadership, industrial structure or restructuring


At present, LG Group promotes automotive electronics, energy, OLED displays, biomedical and materials components among its subsidiaries through the basic structure of electronics, chemistry and communications. The Korean industry believes that the LG Group has a number of electric vehicle component technologies. It is not a problem to enter the energy vehicle and electric vehicle markets.


Among them, LG Electronics is the largest subsidiary of LG Group, and is famous for producing home appliances, consumer electronics and mobile communication equipment. According to its 2017 third quarterly report, LG Electronics' operating profit increased by 82.2% in the third quarter.


In addition, LG Chemical, a subsidiary of the LG Group, is also well-known. With the rise of the new energy vehicle market, the power source of electric vehicles, the power battery, is also welcoming opportunities for development. Among the global power battery companies, the most influential are Matsushita of Japan, LG Chem of South Korea and Samsung SDI. Due to its excellent product quality, sufficient output and low price, LG Chem has long-term cooperation with many brands such as Hyundai, Renault and GM.


However, the electronic business of LG Electronics has a large scale at first glance, but it has actually lost its losses. Although the revenue in 2017 was 3.4 trillion won (about 3.05 billion U.S. dollars), there were also business losses of more than 100 billion won. The performance is worse than 2016. In the first quarter of 2018, it also lost 17 billion won.


In the panel business, LG Display (LGD) was strongly attacked by mainland panel makers. In the first quarter of 2018, it suffered the first loss in six years. In the second quarter, the situation was still not optimistic. The LCD business profit reduction was indirectly hindered. The investment planning of the OLED business has not yet benefited as the OLED business of the new generation of LGD.


With the increasing demand for OLED screens for high-end consumer electronics such as high-end TVs, smart wearable devices, and smart phones, the OLED screen market is also expanding. Some organizations predict that the global OLED panel market will reach approximately 413.6 in 2022. One hundred million U.S. dollars. IHS predicts that the global OLED market will reach $25.2 billion this year, up 63% from the previous year.


Faced with the beautiful market prospects of OLED screens, Samsung, LG, BOE (BOE) and other screen manufacturers have invested capital to expand production capacity and seize market resources. Among them, on the small-size OLED screen, Samsung's Samsung Display seized 97.1% of the market share; on the large-size OLED screen used in TV products, LG Display occupied a monopoly position. LG Display has previously invested $7 billion to expand its OLED panel capacity, with $4.5 billion going to small-size products and the rest to large-size products.


Recently, LG Display plans to build an 8.5-generation OLED factory in Guangzhou, China. Industry insiders told the home grid that the move seems to take into account China's huge TV market and Guangzhou's intensive industrial advantages. In response to the growing demand for OLEDs, LG Display plans Increase the proportion of OLED sales from the current 10% to 40% in 2020. The project plans to complete the 8.5-generation OLED factory in Guangzhou in the second half of 2019.


Another problem is the mobile device business, in which the LG Electronics Mobile Communications Division (MC) has faced the biggest crisis and has suffered losses for 12 consecutive quarters. In 2017, the loss scale exceeded 1 trillion won. Although the MC business unit has continuously improved its physical fitness and adjusted its product line in the past two years, it has not received any significant results so far, but it has continuously eroded the profit earned by the Home Appliances Division.


For a long time, the LG Group has strictly followed the succession of the eldest son, and Ben Jun has to be separated from the group. In addition, he has independently developed elsewhere. The Korean industry believes that it is now the time when the LG Group launches its growth offensive. The light will bring great challenges.


He has been deeply involved in the core business of the LG Group, such as semiconductors, monitors, and automotive electronics. At the end of 2015, he became the head of the new growth business of the LG Group. Now he has completely withdrawn from the management and announced Retiring at the end of 2018, the test of the new successor will now begin.