KB News Desk
Lower production costs are giving the OLED-focused business more earnings room
LG Display returned to a first-half operating profit despite lower sales, as restructuring and a shift away from low-margin LCD panels reduced the share of revenue absorbed by production costs.
The company posted 11.15 trillion won ($8.06 billion) in revenue for the first half of 2026, down 4.3 percent from a year earlier, according to its half-year regulatory filing last week. Cost of sales fell 7.5 percent to 9.62 trillion won.
That brought the cost-of-sales ratio down to 86.3 percent from 89.3 percent a year earlier. Operating profit reached 39 billion won, reversing an 82.6 billion won loss.
The figures suggest LG Display is operating with a lower break-even point after several years of restructuring under CEO and President Jeong Cheol-dong, who took the helm in late 2023 following heavy losses.
LG Display completed the sale of its Guangzhou large-LCD operation in April 2025, effectively ending its large-LCD business. Korean display makers have been retreating from commoditized LCD production as Chinese rivals expand scale and push down prices.
The company has instead concentrated more heavily on OLED and higher-value products. OLED accounted for 58 percent of first-half sales, up from 55 percent a year earlier.
The longer-term shift is also visible in the cost-of-sales ratio, which stood at 98.4 percent in 2023, fell to 90.3 percent in 2024 and reached 86.9 percent in 2025.
Still, the improvement cannot be pinned on a single factor. Direct raw-material purchases fell 7.1 percent on-year to 4.38 trillion won in the first half, while depreciation and amortization expenses declined 16.6 percent.
Labor costs rose 8.5 percent, partly due to about 240 billion won in one-off expenses tied to voluntary retirement in the second quarter. Headcount fell by 1,567 from a year earlier to 23,490 at the end of June.
LG Display has also expanded the use of artificial intelligence in OLED production. The company said its AI-based manufacturing system shortened the average time needed to resolve process problems from about three weeks to two days and delivered more than 200 billion won in profitability gains last year.
LG Display said it intends to keep reducing costs while strengthening its core businesses.
“We will keep improving our cost structure and business competitiveness so that the recent earnings recovery translates into more stable profitability,” a company official said.
