As filed with the Securities and Exchange Commission on April 28, 2025
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
(Mark One)
☐
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
EXCHANGE ACT OF 1934
OR
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
OR
☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of event requiring this shell company report
For the transition period from to
Commission file number 1-32238
LG Display Co., Ltd.
(Exact name of Registrant as specified in its charter)
LG Display Co., Ltd.
(Translation of Registrant’s name into English)
The Republic of Korea
(Jurisdiction of incorporation or organization)
LG Twin Towers, 128 Yeoui-daero, Yeongdeungpo-gu, Seoul 07336, Republic of Korea
(Address of principal executive offices)
Jinjoo Kim
LG Twin Towers, 128 Yeoui-daero, Yeongdeungpo-gu, Seoul 07336, Republic of Korea
Telephone No.: +82-2-3777-0748
Facsimile No.: +82-2-3777-0797
(Name, telephone, e-mail and/or facsimile number and address of company contact person)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each class
Trading Symbol
Name of each exchange
on which registered
American Depositary Shares, each representing
one-half of one share of Common Stock
LPL
New York Stock
Exchange
Common Stock, par value
W5,000 per share
LPL
New York Stock
Exchange*
*Not for trading, but only in connection with the registration of the American Depositary Shares.
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close
of the period covered by the annual report.
500,000,000 shares of common stock, par value W5,000 per share
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act.
☒ Yes ☐ No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934. Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to
be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for
such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Emerging growth company
☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by
check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial
Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment
of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15
U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ Yes ☐ No
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial
statements of the registrant included in the filing reflect the correction of an error to previously issued financial
statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of
incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period
pursuant to § 240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements
included in this filing: U.S. GAAP ☐ International Financial Reporting Standards as issued by the
International Accounting Standards Board ☒ Other ☐
Auditor Name: Samil PricewaterhouseCoopers Auditor Location: Seoul, Korea Auditor Firm ID: 1103
If “Other” has been checked in response to the previous question, indicate by check mark which financial
statement item the registrant has elected to follow. ☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). ☐ Yes ☒ No
(i)
TABLE OF CONTENTS
Page
Presentation of Financial and Other Information ..................................................................................................
4
Forward-Looking Statements ................................................................................................................................
5
PART I
Item 1.
Identity of Directors, Senior Management and Advisers ...........................................................
6
Item 2.
Offer Statistics and Expected Timetable ....................................................................................
6
Item 3.
Key Information..........................................................................................................................
6
Item 3.A. [RESERVED].............................................................................................................
6
Item 3.B. Capitalization and Indebtedness .................................................................................
6
Item 3.C. Reasons for the Offer and Use of Proceeds ................................................................
6
Item 3.D. Risk Factors ................................................................................................................
6
Item 4.
Information on the Company......................................................................................................
28
Item 4.A. History and Development of the Company ................................................................
28
Item 4.B. Business Overview .....................................................................................................
30
Item 4.C. Organizational Structure.............................................................................................
42
Item 4.D. Property, Plants and Equipment .................................................................................
43
Item 4A.
Unresolved Staff Comments.......................................................................................................
44
Item 5.
Operating and Financial Review and Prospects .........................................................................
44
Item 5.A. Operating Results .......................................................................................................
44
Item 5.B. Liquidity and Capital Resources.................................................................................
58
Item 5.C. Research and Development, Patents and Licenses, etc. .............................................
63
Item 5.D. Trend Information.......................................................................................................
65
Item 5.E. Critical Accounting Estimates ....................................................................................
65
Item 6.
Directors, Senior Management and Employees..........................................................................
65
Item 6.A. Directors and Senior Management .............................................................................
65
Item 6.B. Compensation .............................................................................................................
68
Item 6.C. Board Practices ...........................................................................................................
68
Item 6.D. Employees ..................................................................................................................
70
Item 6.E. Share Ownership.........................................................................................................
71
Item 6.F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded
Compensation .............................................................................................................................
71
Item 7.
Major Shareholders and Related Party Transactions..................................................................
71
Item 7.A. Major Shareholders.....................................................................................................
71
Item 7.B. Related Party Transactions .........................................................................................
71
Item 7.C. Interests of Experts and Counsel ................................................................................
73
Item 8.
Financial Information .................................................................................................................
73
Item 8.A. Consolidated Statements and Other Financial Information........................................
73
Item 8.B. Significant Changes ....................................................................................................
74
Item 9.
The Offer and Listing .................................................................................................................
74
Item 9.A. Offer and Listing Details ............................................................................................
74
Item 9.B. Plan of Distribution.....................................................................................................
74
(ii)
Item 9.C. Markets .......................................................................................................................
75
Item 9.D. Selling Shareholders...................................................................................................
75
Item 9.E. Dilution .......................................................................................................................
75
Item 9.F. Expenses of the Issue ..................................................................................................
75
Item 10.
Additional Information ...............................................................................................................
75
Item 10.A. Share Capital.............................................................................................................
75
Item 10.B. Memorandum and Articles of Association ...............................................................
75
Item 10.C. Material Contracts.....................................................................................................
80
Item 10.D. Exchange Controls....................................................................................................
80
Item 10.E. Taxation ....................................................................................................................
84
Item 10.F. Dividends and Paying Agents ...................................................................................
89
Item 10.G. Statements by Experts ..............................................................................................
89
Item 10.H. Documents on Display..............................................................................................
89
Item 10.I. Subsidiary Information...............................................................................................
89
Item 10.J. Annual Report to Security Holders............................................................................
89
Item 11.
Quantitative and Qualitative Disclosures about Market Risk.....................................................
90
Item 12.
Description of Securities Other than Equity Securities ..............................................................
93
PART II
Item 13.
Defaults, Dividend Arrearages and Delinquencies.....................................................................
94
Item 14.
Material Modifications to the Rights of Security Holders and Use of Proceeds........................
94
Item 15.
Controls and Procedures .............................................................................................................
94
Item 16.
[RESERVED] .............................................................................................................................
95
Item 16A.
Audit Committee Financial Expert.............................................................................................
95
Item 16B.
Code of Ethics.............................................................................................................................
95
Item 16C.
Principal Accountant Fees and Services ....................................................................................
95
Item 16D.
Exemptions from the Listing Standards for Audit Committees .................................................
95
Item 16E.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers.....................................
96
Item 16F.
Change in Registrant’s Certifying Accountant...........................................................................
96
Item 16G.
Corporate Governance ................................................................................................................
96
Item 16H.
Mine Safety Disclosure...............................................................................................................
98
Item 16I.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections........................................
98
Item 16J.
Insider Trading Policies..............................................................................................................
98
Item 16K.
Cybersecurity..............................................................................................................................
98
PART III
Item 17.
Financial Statements...................................................................................................................
100
Item 18.
Financial Statements...................................................................................................................
100
Item 19.
Exhibits .......................................................................................................................................
101
4
PRESENTATION OF FINANCIAL AND OTHER INFORMATION
In this annual report, the terms “we,” “us,” “our” and “LG Display” refer to LG Display Co., Ltd. and, unless
otherwise indicated or required by context, our consolidated subsidiaries. Notwithstanding the foregoing, in the
context of any legal proceedings or governmental investigations, “LG Display” refers to LG Display Co., Ltd. and
does not include any of its subsidiaries, or any other entities or persons.
The financial statements included in this annual report are prepared in accordance with International Financial
Reporting Standards (“IFRS”) Accounting Standards as issued by the International Accounting Standards Board
(“IASB”). As such, we make an explicit and unreserved statement of compliance with IFRS Accounting Standards as
issued by the IASB, with respect to our consolidated financial statements as of December 31, 2023 and 2024 and for
each of the years ended in the three-year period ended December 31, 2024 included in this annual report.
In addition to preparing financial statements in accordance with IFRS Accounting Standards as issued by the
IASB included in this annual report, we also prepare financial statements in accordance with Korean International
Financial Reporting Standards, or K-IFRS, as adopted by the Korean Accounting Standards Board, or KASB, which
we are required to file with the Financial Services Commission and the Korea Exchange under the Financial
Investment Services and Capital Markets Act of Korea. See “Item 10.B. Memorandum and Articles of Association—
Business Report.” English translations of such financial statements are furnished to the SEC on Form 6-K, which are
not incorporated by reference to this or any of our previous annual reports on Form 20-F. The operating profit or loss
presented in the consolidated statements of comprehensive income or loss prepared in accordance with K-IFRS for the
years ended December 31, 2023 and 2024 included in the Form 6-K furnished to the SEC on March 5, 2025 is a loss of
W2,510 billion and W561 billion, respectively. For further information, please see the Form 6-K furnished to the SEC
on March 5, 2025, which is not incorporated by reference to this annual report.
Pursuant to the IFRS Accounting Standards as issued by the IASB, we are not required to separately present
operating profit or loss in our consolidated statements of comprehensive income or loss prepared in accordance with
IFRS Accounting Standards as issued by the IASB. Therefore, the financial statements included in this annual report,
which are prepared in accordance with IFRS Accounting Standards as issued by the IASB, do not present operating
profit or loss as a separate line item.
Unless expressly stated otherwise, all financial data included in this annual report are presented on a
consolidated basis.
All references to “Korean Won,” “Won” or “W” in this annual report are to the currency of the Republic of
Korea, all references to “U.S. dollars” or “US$” are to the currency of the United States, all references to “Japanese
Yen,” “Yen” or “¥” are to the currency of Japan, all references to “CNY” or “Chinese Yuan” are to the currency of the
People’s Republic of China, all references to “Vietnamese Dong” are to the currency of Vietnam, all references to
“Euro” or “€” are to the official currency of the European Economic and Monetary Union, and all references to “R$”
are to the currency of Brazil.
Any discrepancies in any table between the totals and the sums of the amounts listed are due to rounding.
For your convenience, this annual report contains translations of Won amounts into U.S. dollars at the noon buying
rate in New York City for cable transfers in Korean Won as certified by the Federal Reserve Bank of New York for
customs purposes in effect on December 31, 2024, which was W1,477.86 = US$1.00.
5
FORWARD-LOOKING STATEMENTS
We have made forward-looking statements in this annual report. Our forward-looking statements contain
information regarding, among other things, our financial condition, future plans and business strategy. Words such as
“contemplate,” “seek to,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan” and similar expressions, as
they relate to us, are intended to identify a number of these forward-looking statements. These forward-looking
statements reflect management’s present expectations and projections about future events and are not a guarantee of
future performance. Although we believe that these expectations and projections are reasonable, such forward-looking
statements are inherently subject to risks, uncertainties and assumptions about us, including, among other things:
•
the cyclical nature of our industry;
•
adverse developments in the global financial markets and industry;
•
our dependence on introducing new products on a timely basis;
•
our dependence on growth in the demand for our products, which in turn is partly dependent on the
growth of our downstream industries;
•
our ability to compete effectively;
•
our dependence on a select group of key customers;
•
our ability to successfully manage our capacity expansion and allocation in response to changing industry
and market conditions;
•
our dependence on key personnel;
•
general economic and political conditions, including those related to the display panel industry;
•
possible disruptions in commercial activities caused by events such as natural disasters, health epidemics,
terrorist activity and armed conflict;
•
fluctuations in interest rates and foreign currency exchange rates; and
•
those other risks identified in the “Risk Factors” section of this annual report.
Except as required by law, we undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and
assumptions, the events discussed in the forward-looking statements in this annual report might not occur and our
actual results could differ materially from those anticipated in these forward-looking statements.
All subsequent forward-looking statements attributable to us or any person acting on our behalf are expressly
qualified in their entirety by the cautionary statements contained or referred to in this section.
6
PART I
Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
Item 3. KEY INFORMATION
Item 3.A. [RESERVED]
Item 3.B. Capitalization and Indebtedness
Not applicable.
Item 3.C. Reasons for the Offer and Use of Proceeds
Not applicable.
Item 3.D. Risk Factors
You should carefully consider the risks described below.
Risks Relating to Our Industry
Our revenue depends on continuing demand for IT products, mobile and other products, televisions, and auto
products with panels of the type we produce. Our sales may not grow at the rate we expect if consumers do not
purchase these products.
The business in which we are engaged is directly affected by the business conditions of the downstream
industries which utilize display panels in their products. Currently, our total sales are derived principally from
customers who use our products in “IT products” (which term is used by us to collectively refer to notebook
computers, desktop monitors and tablet computers in this annual report), televisions, mobile and other products, and
“auto products” (which term is used by us to refer to automotive products in this annual report) with display devices.
In particular, a substantial percentage of our sales is derived from end-brand customers, or their designated system
integrators, who use our panels in their IT products, which accounted for 42.5%, 36.8% and 35.4% of our total revenue
in 2022 (prior to deduction of forward exchange hedging loss, which had previously been treated as accumulated other
comprehensive loss but was reclassified to a deduction from revenue in 2022, when the sales from the hedged forecast
transactions were recognized), 2023 and 2024, respectively. A substantial portion of our sales is also derived from end-
brand customers, or their designated system integrators, who use our panels in their mobile and other products, which
accounted for 24.0%, 33.1% and 33.0% of our total revenue in 2022, 2023 and 2024 (in the case of 2022, adjusted as
described above), respectively, those who use our panels in their televisions, which accounted for 26.4%, 20.3% and
22.4% of our total revenue in 2022, 2023 and 2024 (in the case of 2022, adjusted as described above), respectively,
and those who use our panels in their auto products, which accounted for 6.9%, 9.4% and 8.6% of our total revenue in
2022, 2023 and 2024 (in the case of 2022, adjusted as described above), respectively.
The overall demand for end products that utilize certain types of our display panels, including IT and
television products, have remained weak in recent years in light of increases in inflation and interest rates and
increasing economic volatility and uncertainty globally. See “Risks Relating to Our Industry — A global economic
downturn may result in reduced demand for our products and adversely affect our profitability.” As each of our IT
products, mobile and other products, televisions and auto product segments significantly contributes to our total sales,
we will continue to be dependent on continuing demand from each of the IT products industry, the mobile device
industry, the television industry and the automotive industry for a substantial portion of our sales. A prolonged
downturn in any of those industries in which our customers operate would result in reduced demand for our products,
which may in turn result in reduced revenue, lower average selling prices and/or reduced margins.
7
The display panel industry is subject to cyclical fluctuations, including recurring periods of capacity increases, that
may adversely affect our results of operations.
The current global supply of medium- and large-sized display panels is manufactured primarily based on thin-
film transistor liquid crystal display, or TFT-LCD, technology, and to a lesser but increasing extent, organic light-
emitting diode, or OLED, technology, and a majority of small-sized display panels is now manufactured primarily
based on OLED technology. Display panel manufacturers are vulnerable to cyclical market conditions. Intense
competition and expectations of growth in demand across the display panel industry may cause manufacturers to make
additional investments in manufacturing capacity on similar schedules, resulting in a surge in capacity when
production is ramped up at new fabrication facilities. During such surges in capacity growth, as evidenced by past
experiences, customers can exert strong downward pricing pressure, resulting in sharp declines in average selling
prices and significant fluctuations in the panel manufacturers’ gross margins. Conversely, demand surges and
fluctuations in the supply chain can lead to price increases.
From time to time, we have been affected by overcapacity in the display panel industry relative to the general
demand for such panels which, together with uncertainties in the current global economic environment, has contributed
to a general decline in the average selling prices of a number of our display panel products. We attempt to counteract
the effects of overcapacity in the industry by increasing the proportion of high-value, differentiated specialty products
based on newer technologies in our product mix, including products that utilize OLED technology, which accounted
for 55% of our revenues in 2024 and are relatively less affected by the industry-wide overcapacity problems, while
also engaging in cost reduction efforts. We also address overcapacity issues by, in the short-term, adjusting the
utilization rates of our existing fabrication facilities based on our assessment of industry inventory levels and demand
for our products and, in the mid- to long-term, by fine-tuning our investment strategies relating to product
development and capacity growth in light of our assessment of future market conditions.
Our average revenue per square meter of net display area, which is derived by dividing our total revenue by
total square meters of net display area shipped, increased by 33.1% from W829 thousand in 2022 to W1,103 thousand
in 2023, which primarily reflected our ongoing efforts to increase the proportion of OLED panels (especially the
small- and medium-sized panels which generally have higher sales price per net display area compared to large-sized
panels) in our product mix in light of the continued overcapacity and further capital investments by other suppliers,
particularly from China, in the global TFT-LCD market, as well as depreciation of the Korean Won against the U.S.
dollar during 2023, the effects of which were partly offset by the continued weak demand for our television and IT
panel products, among others, due to continued inflationary pressure and the higher interest rate environment and
global economic volatility and uncertainty in 2023. Our average revenue per square meter of net display area
decreased by 2.5% to W1,076 thousand in 2024, largely due to the continued sluggish demand for medium-sized IT
panel products, the effect of which was partly offset by an increase in the sales volume and proportion of small-sized
panels for mobile and other products, which generally have higher sales price per net display area compared to their
larger-sized counterparts, in our product mix.
While we believe that overcapacity and other cyclical issues in the industry are best addressed by increasing
the proportion of high-value, differentiated specialty products based on newer technologies (such as OLED
technology) in our product mix that are tailored to our customers’ evolving needs, we cannot provide any assurance
that an increase in demand, which has helped to mitigate the impact of industry-wide overcapacity in the past, will
recur or be sustained in future periods. We will therefore continue to closely monitor any overcapacity issues in the
industry and respond accordingly. However, construction of new fabrication facilities and other capacity expansion
projects in the display panel industry, including those currently under construction or planned to be constructed by us
and other major display panel manufacturers in China and Korea, are undertaken with a multi-year time horizon based
on expectations of future market trends. Therefore, even if overcapacity issues persist in the industry, there may be
continued capacity expansion in the near future due to pre-committed capacity expansion projects in the industry that
were undertaken in past years. Any significant industry-wide capacity increases that are not accompanied by a
sufficient increase in demand could further drive down the average selling price of our panels, which would negatively
affect our gross margin. Any decline in prices may be further compounded by a seasonal weakening in demand growth
for end products such as personal computer products, consumer electronics products and mobile devices. Furthermore,
once the differentiated products that had a positive impact on our performance mature in their technology cycle, if we
are not able to develop and commercialize newer products to offset the price erosion of such maturing products in a
timely manner, our ability to counter the impact of cyclical market conditions on our gross margins would be further
limited. We cannot provide assurance that any future downturns resulting from any large increases in capacity or other
8
factors affecting the industry would not have a material adverse effect on our business, financial condition and results
of operations.
In addition, we may recognize impairment losses on our property, plant and equipment and intangible assets
in connection with deteriorating market conditions. For example, in 2022, partly due to less favorable industry outlook
in light of continued and exacerbated uncertainty in the prospects of the global economy, we recognized impairment
losses of W1,331 billion, attributable to a decrease in the estimated recovery value of our property, plant and
equipment and intangible assets relating to our large-sized OLED display panel business. See “Item 5.A. Operating
Results—Comparison of 2023 to 2022” and Note 10(d) of the notes to our financial statements for further discussion
of our assessment of impairment with respect to our large-sized OLED display panel business. We cannot provide
assurance that any future downturns will not result in additional recognition of impairment losses on our property,
plant and equipment and intangible assets, which may have a material adverse effect on our financial condition and
results of operations.
A global economic downturn may result in reduced demand for our products and adversely affect our profitability.
In recent years, adverse conditions and volatility in the worldwide financial markets, fluctuations in oil and
commodity prices and the general weakness of the global economy have contributed to the uncertainty of global
economic prospects in general and have adversely affected, and may continue to adversely affect, the Korean
economy. Global economic downturns in the past have adversely affected demand for consumer products
manufactured by our customers in Korea and overseas, including IT products, televisions, mobile devices and auto
products utilizing display panels, which in turn led them to adjust their production levels.
Uncertainties in the global economy have increased in recent years, with global financial and capital markets
experiencing substantial volatility. In particular, the COVID-19 pandemic that began in late 2019 and rapid increases
in interest rates globally from the second half of 2021 until recently to combat inflation have materially and adversely
affected the global economy and financial markets. See “—Risks Relating to Our Company—Earthquakes, tsunamis,
floods, severe health epidemics (including the global COVID-19 pandemic and any possible recurrence of other types
of widespread infectious diseases) and other natural calamities could materially adversely affect our business, results
of operations or financial condition.” Such uncertainties have been, and continue to be, exacerbated by, among other
things, deterioration in economic and trade relations between major economies (particularly between the United States
and China), the invasion of Ukraine by Russia and ensuing sanctions against Russia, the slowdown of economic
growth in China and other major emerging market economies, adverse economic and political conditions in Europe
and Latin America and continuing geopolitical and social instability in North Korea and various parts of the Middle
East, including the escalation of hostilities in the Middle East following the Israel-Hamas war. We cannot provide any
assurance that demand for our products can be sustained at current levels in future periods or that the demand for our
products will not decrease in the future due to such economic downturns, which may adversely affect our profitability.
We have from time to time adjusted, and may decide to adjust in the future, our production levels subject to
market demand for our products, the production outlook of the global display panel industry, any significant
disruptions in our supply chain and global economic conditions in general. As part of our continued efforts to increase
the proportion of OLED panels in our product mix, we have been reducing the production level of TFT-LCD panels in
recent years. For example, in 2022, we reduced our production capacity of TFT-LCD panels for televisions at our
manufacturing facilities in China. In addition, we ceased production at, and closed, our P5 fabrication facility (where
we had produced TFT-LCD panels for notebook computers and mobile and other products) in June 2022, our P7
fabrication facility (where we had produced TFT-LCD panels for televisions) in December 2022, and our P62
fabrication facility (where we had produced TFT-LCD panels for notebook computers and desktop monitors) in June
2023, in light of our continued efforts to increase the proportion of OLED panels in our product mix and the
production capacity for such panels and further reduce our production level of TFT-LCD panels, which we believe to
be relatively more sensitive to market conditions and generally allow for fewer opportunities for product
differentiation. More recently, in September 2024, as part of our efforts to accelerate the ongoing shift in our strategic
direction to focus on OLED panels, we entered into an agreement with TCL China Star Optoelectronics Technology
(“TCL CSOT”), a leading Chinese display panel manufacturer, to dispose of our entire equity interest in LG Display
(China) Co., Ltd. and LG Display Guangzhou Co., Ltd., which engage in TFT-LCD panel manufacturing and TFT-
LCD module manufacturing for televisions, respectively, for approximately W2.2 trillion. Following the completion of
the sale, these entities were excluded from the scope of our consolidated subsidiaries effective April 1, 2025. See Note
29 of the notes to our financial statements for further discussion. Any decline in demand for display panel products
may adversely affect our business, results of operations and/or financial condition.
9
Our industry continues to experience steady declines in the average selling prices of display panels irrespective of
cyclical fluctuations in the industry, and our margins would be adversely impacted if prices decrease faster than we
are able to reduce our costs.
The average selling prices of display panels have declined in general and are expected to continually decline
with time irrespective of industry-wide cyclical fluctuations as a result of, among other factors, technological
advancements and cost reductions. Although we may be able to take advantage of the higher selling prices typically
associated with new products and technologies when they are first introduced in the market, such prices decline over
time, and in certain cases, very rapidly, as a result of market competition or otherwise, and we may have difficulties
with setting the prices of our display panels at levels at which we can secure sufficient margins. For example, in part
due to weaker market demand and increased competition, our gross margin decreased from 4.3% in 2022 to 1.6% in
2023 before rebounding to 9.7% in 2024. If we are unable to effectively anticipate and counter the price erosion that
accompanies our products, or if the average selling prices of our display panels decrease faster than the speed at which
we are able to reduce our manufacturing costs, our gross margin would decrease and our results of operations and
financial condition may be materially and adversely affected.
We operate in a highly competitive environment and we may not be able to sustain our current market position.
The display panel industry is highly competitive. Our main competitors in the industry include leading
display manufacturers in China, Korea, Taiwan and Japan. We have experienced pressure on the prices and margins of
our major products due largely to additional capacity from panel makers in Asia, particularly in China. The market
share of Chinese manufacturers in the global TFT-LCD display market has significantly increased in recent years
primarily due to their large investments in production facilities and production of large volumes of lower-priced panels
with the support of the Chinese government as part of its efforts to encourage Chinese consumers to purchase
domestically manufactured products. Chinese display panel manufacturers have also been increasingly making capital
investments in OLED technology, especially with respect to small- and mid-sized OLED display panels. For example,
BOE, China’s largest display panel manufacturer, has been making ongoing efforts to expand its OLED production
capabilities, including significant investments in a new OLED production line in Chengdu, China. Moreover, Samsung
Display, one of our primary competitors based in Korea, has been making significant capital investments in a new
OLED manufacturing facility in Asan, Korea. Increased production capacity resulting from such investments as well
as additional investments by our competitors in China and elsewhere may result in further intensified competition. See
“Item 4.B. Business Overview—Competition.”
Some of our competitors may currently, or at some point in the future, have greater financial, sales and
marketing, manufacturing, research and development or technological resources than we do. In addition, our
competitors may be able to manufacture panels on a larger scale or with greater cost efficiencies than we do, and we
anticipate increases in production capacity in the future by other display panel manufacturers using similar display
panel technologies as ours. Any price erosion resulting from strong global competition or additional industry capacity
may materially adversely affect our financial condition and results of operations.
Mergers or consolidations within the industry in which we operate may result in increased competition as the
entities emerging from such consolidation may have greater financial, manufacturing, research and development and
other resources than we do, especially if such mergers or consolidations result in vertical integration and operational
efficiencies. Increased competition resulting from such mergers or consolidations may lead to decreased margins,
which may have a material adverse effect on our financial condition and results of operations.
Our ability to compete successfully also depends on factors both within and outside our control, including
product pricing, performance and reliability, our relationship with customers, successful and timely investment and
product development, success or failure of our end-brand customers in marketing their brands and products, newly
established industry standards, component and raw material supply costs, and general economic and industry
conditions. We cannot provide assurance that we will be able to maintain a competitive advantage with respect to all
these factors and, as a result, we may be unable to sustain our current market position.
10
Our operating results fluctuate from period to period, so you should not rely on period-to-period comparisons to
predict our future performance.
Our industry is affected by market conditions that are often outside the control of manufacturers. Our results
of operations may fluctuate significantly from period to period due to a number of factors, including seasonal
variations in consumer demand, capacity ramp-up by competitors, industry-wide technological changes, the loss of a
key customer and the postponement, rescheduling or cancellation of large orders by a key customer, any of which may
or may not reflect a continued trend from one period to the next. As a result of these factors and other risks discussed
in this section, you should not rely on period-to-period comparisons to predict our future performance.
Risks Relating to Our Company
Our financial condition may be adversely affected if we cannot introduce new products to adapt to rapidly evolving
customer needs on a timely basis.
Our success will depend greatly on our ability to respond quickly to rapidly evolving customer requirements
and to develop and efficiently manufacture new and differentiated products in anticipation of future demand. A failure
or delay on our part to develop and efficiently manufacture products of such quality and technical specifications that
meet our customers’ evolving needs may adversely affect our business.
Close cooperation with our customers to gain insights into their product needs and to understand general
trends in the end-product market is a key component of our strategy to produce successful products. In addition, when
developing new products, we often work closely with equipment suppliers to design equipment that will make our
production processes for such new products more efficient. If we are unable to work together effectively with our
customers and equipment suppliers, or to sufficiently understand their respective needs and capabilities or general
market trends, we may not be able to introduce or efficiently manufacture new products in a timely manner, which
may have a material adverse effect on our financial situation.
In addition, product differentiation, especially the ability to develop and market differentiated specialty
products that command higher premiums in a timely manner, has become a key competitive strategy in the display
panel market. This is in part due to trends in consumer electronics and other markets, such as IT products, televisions,
mobile devices and auto products where the growth in demand is led by end products employing newer technologies
with specifications tailored to deliver enhanced performance, convenience and user experience in a cost-efficient and
timely manner. Accordingly, we have focused our efforts on developing and marketing differentiated specialty
products, such as OLED display panels for televisions and commercial displays including our next-generation
“META” display panels (which apply advanced technologies to offer brighter and more stable images), transparent
OLED display panels as well as OLED display panels for gaming monitors. We also strive to deliver differentiated
values to meet our consumers’ demand for various display panels including (i) panels utilizing ultra-high definition, or
Ultra HD, technology and low power consumption with oxide TFT backplanes, (ii) Advanced High-Performance In-
Plane Switching, or AH-IPS, panels for IT products and televisions, and (iii) plastic OLED display panels for
smartphones, auto products and wearable devices. We have also focused our efforts on cost reductions in the
production process, in particular of our OLED display panels, in order to improve or maintain our profit margins while
offering competitive prices to our customers.
We have developed differentiated sales and marketing strategies to promote our panels for differentiated
specialty products as part of our strategy to grow our operations to meet increasing demand for new applications in
consumer electronics and other markets. However, we cannot provide assurance that the differentiated products we
develop and market will be responsive to our end customers’ needs nor that our products will be successfully
incorporated into end products or new applications that lead market growth in consumer electronics or other
markets.
Problems with product quality, including defects, in our products could result in a decrease in customers and sales,
unexpected expenses and loss of market share.
Our products are manufactured using advanced, and often new, technology and must meet stringent quality
requirements. Products manufactured using more advanced and newer technology, such as our OLED technology, may
contain undetected errors or defects, especially when first introduced. For example, our latest display panels may
contain defects that are not detected until after they are shipped or installed because we cannot test for all possible
11
scenarios. Such defects could cause us to incur significant re-designing costs, divert the attention of our technology
personnel from product development efforts and significantly affect our customer relations and business reputation. In
addition, future product failures could cause us to incur substantial expense to repair or replace defective products. We
recognize a provision for warranty obligations based on the estimated costs that we expect to incur under our basic
limited warranty for our products, which covers defective products and is valid for a period of time mutually agreed
between us and the relevant customer from the date of purchase by such customer. The warranty provision is largely
based on historical and anticipated rates of warranty claims, and therefore we cannot provide assurance that the
provision would be sufficient to cover any surge in future warranty expenses that significantly exceed historical and
anticipated rates of warranty claims. In addition, if we deliver products with errors or defects, or if there is a perception
that our products contain errors or defects, our credibility and the market acceptance and sales of our products could be
harmed. Widespread product failures may damage our market reputation, and/or reduce our market share and cause
our sales to decline.
We sell our products to a select group of key customers, including our largest shareholder and its affiliates, and any
significant decrease in their order levels or material deterioration in their financial condition will negatively affect
our financial condition and results of operations.
A substantial portion of our sales is attributable to a limited group of end-brand customers and their
designated system integrators. In particular, our sales of high value-added display panels are largely concentrated to a
limited number of leading global end-brand customers and their system integrators with the requisite technological
capabilities to produce products that require such high-value-added display panels. Sales attributed to our end-brand
customers are for their end-brand products and do not include sales to these customers for their system integration
activities for other end-brand products, if any. Our top ten end-brand customers, including LG Electronics Inc., our
largest shareholder, together accounted for a substantial majority of our sales in each of 2022, 2023 and 2024.
We benefit from the strong collaborative relationships we maintain with our end-brand customers by
participating in the development of their products and gaining insights about levels of future demand for our products
and other industry trends. Customers look to us for a dependable supply of quality products, even during downturns in
the industry, and we benefit from the brand recognition of our customers’ end products. The loss of these end-brand
customers, as a result of their entering into strategic supplier arrangements with our competitors or otherwise, would
thus result not only in reduced sales, but also in the loss of these benefits. We cannot provide assurance that a select
group of key end-brand customers, including our largest shareholder, will continue to place orders with us in the future
at the same levels as in prior periods, or at all.
We expect that we will continue to be dependent upon LG Electronics and its affiliates for a significant
portion of our revenue for the foreseeable future. See “Item 7.B. Related Party Transactions” for a description of these
related party transactions with LG Electronics and its affiliates. Our results of operations and financial condition could
therefore be affected by the overall performance of LG Electronics and its affiliates.
Furthermore, although we have not experienced any material problems relating to customer payments to date,
as a result of our significant dependence on a concentrated group of end-brand customers and their designated system
integrators, we are exposed to credit risks associated with these entities.
Consolidation and other changes at our end-brand customers could cause sales of our products to decline.
Mergers, acquisitions, divestments or consolidations involving our end-brand customers can present risks to
our business, as management at the new entity may change the way they do business, including their transactions with
us, or may decide not to use us as one of their suppliers of display panels. In addition, we cannot provide assurance
that a combined entity resulting from a merger, acquisition or consolidation or a newly formed entity resulting from a
divestment will continue to purchase display panels from us at the same level, if at all, as each entity purchased in the
aggregate when they were separate companies or that a divested company will purchase panels from us at the same
level, if at all, as prior to the divestment.
Our results of operations depend on our ability to keep pace with changes in technology.
Advances in technology typically lead to rapid declines in sales volumes for products made with older
technologies and may lead to these products becoming less competitive in the marketplace, or even obsolete. As a
result, we have made, and will likely be required to continue to make, significant expenditures to develop or acquire
12
new process and product technologies, along with corresponding manufacturing capabilities. For example, we
commenced mass production of large-sized OLED panels at our CO fabrication facility, located in Guangzhou, China,
in July 2020. In August 2021, we announced plans to make investments in an aggregate amount of up to W3.3 trillion
in a new fabrication complex in Paju, Korea, P10, which will be used for the production of small- and medium-sized
OLED panels. We completed the construction of our new AP5 fabrication facility located within such complex in
February 2024, and have subsequently commenced mass production of medium-sized OLED panels at such facility.
Through the addition of 97-inch OLED televisions to our line-up of available products in 2022 and the earlier
launch of OLED televisions in various sizes up to 88-inches, we have been striving to maintain a competitive edge in
the OLED television panel market. Additionally, we have deployed, and are continuing to deploy, significant resources
into plastic OLED panels for mobile and other products and auto products, as well as medium-sized OLED panels for
IT products, to further expand our market presence. Our ability to develop differentiated products with new display
technologies and utilize advanced manufacturing processes to increase production yields while lowering production
cost will be critical to our sustained competitiveness. However, we cannot provide assurance that we will be able to
continue to successfully develop new products or manufacturing processes through our research and development
efforts or through obtaining technology licenses, or that we will keep pace with technological changes in the
marketplace.
Earthquakes, tsunamis, floods, severe health epidemics (including the global COVID-19 pandemic and any possible
recurrence of other types of widespread infectious diseases) and other natural calamities could materially adversely
affect our business, results of operations or financial condition.
If earthquakes, tsunamis, floods, severe health epidemics or any other natural calamities were to occur in the
future in any area where any of our assets, suppliers or customers are located, our business, results of operations or
financial condition could be adversely affected. A number of suppliers of our raw materials, components and
manufacturing equipment, as well as certain of our manufacturing facilities, are located in countries which have
historically suffered natural calamities from time to time, such as China, Japan, Taiwan and Vietnam, as well as Korea.
Any occurrence of such natural calamities in countries where our suppliers are located may lead to shortages or delays
in the supply of raw materials, components or manufacturing equipment. In addition, natural calamities in areas where
our customers are located, including China, the United States, Europe, Korea and Japan, may cause disruptions in their
businesses, which in turn could adversely impact their demand for our products.
The outbreak of any infectious diseases, such as COVID-19, could expose us to a number of risks, including
but not limited to:
•
an increase in unemployment among, and/or decrease in disposable income of, consumers who purchase
the products manufactured by our end-brand customers and a decline in overall consumer confidence and
spending levels, which in turn may decrease demand for our products;
•
disruption in the normal operations of the businesses of our customers, which in turn may decrease
demand for our products;
•
disruption in the supply of raw materials, components and equipment, including semiconductors, from
our suppliers and vendors;
•
disruption in the delivery of our products to our customers;
•
disruption in the normal operations of our business resulting from contraction of infectious diseases by
our employees, which may necessitate our employees to be quarantined and/or our manufacturing
facilities or offices to be temporarily shut down;
•
disruption resulting from the necessity for social distancing, including implementation of temporary
adjustment of work arrangements requiring employees to work remotely and restriction on overseas and
domestic business travel, which may lead to a reduction in labor productivity;
•
fluctuations of the Won against major foreign currencies (see “—Our results of operations are subject to
exchange rate fluctuations”);
•
unstable global and Korean financial markets, which may adversely affect our ability to meet our funding
needs on a timely and cost-effective basis; and
13
•
decreases in the fair value of our investments in companies that may be adversely affected by the
pandemic.
In the event that a future recurrence of COVID-19 or an occurrence of other types of widespread infectious
diseases cannot be effectively and timely contained, our business, financial condition and results of operations may be
materially adversely affected.
The emergence of OLED technology as an alternative to panels with TFT-LCD technology may erode sales of our
TFT-LCD panels, which may have a material adverse effect on our financial condition and results of operations.
While our revenue and sales volume had historically been predominantly derived from the sale of display
panels with TFT-LCD technology, OLED technology is widely seen in the display industry as a successor technology
to TFT-LCD technology and has gained wider market acceptance for use in display panels for IT products, televisions,
auto products, mobile devices and other products, including commercial displays, entertainment systems, and medical
diagnostic equipment, and the proportion of our sales derived from our panel products utilizing OLED technology
have been continually increasing in recent years to account for the majority of our total revenue in 2024. For example,
all of our currently produced display panels for mobile devices and televisions utilize OLED technology. We have
recognized the importance and potential of OLED technology and have in recent years engaged in research and
development and invested in production facilities to develop and commercialize OLED panels for small-, medium- and
large-sized products. We have been producing OLED panels for televisions and smartphones since 2013. We also
began production of plastic OLED panels at our AP3 and AP4 fabrication facilities in August 2017 and July 2019,
respectively, in each case for mobile and other products. In July 2020, we commenced mass production of large-sized
OLED panels at our CO fabrication facility, located in Guangzhou, China. In August 2021, we announced plans to
make investments in an aggregate amount of up to W3.3 trillion in a new fabrication complex in Paju, Korea, P10,
which will be used for the production of small- and medium-sized OLED panels. We completed the construction of
our new AP5 fabrication facility located within such complex in February 2024 and have subsequently commenced
mass production of medium-sized OLED panels at such facility. At the same time, we have been strategically reducing
the production level of our TFT-LCD panels, including through the disposal of our equity interest in our Chinese
subsidiaries engaged in the manufacturing of TFT-LCD panels and modules for televisions. See “—A global economic
downturn may result in reduced demand for our products and adversely affect our profitability.” above.
Our early efforts in developing and commercializing OLED technology have been recognized by various
display panel industry groups in recent years. For example, in November 2022, our newly launched large-sized
OLED.Ex television panels received the Technology Award at the HiVi Grand Prix 2022. In January 2023, our newly
developed thin actuator sound solution for automobiles received the CES 2023 Innovation Award. More recently, in
August 2024, our television and gaming OLED panels featuring META Technology 2.0 received the Korea Display of
the Year award at the International Meeting on Information Display, the largest annual display industry conference
held in Korea. While we strive to maintain our early competitive edge in the market for OLED panels, which have
become the dominant type of panels in the smartphone industry and are becoming increasingly adopted for IT
products, the market for OLED panels as a whole remains smaller compared to the market for TFT-LCD panels, and
we expect competition will continue to intensify in the future. In addition, the speed at which we achieve cost
reduction for our OLED technology-based new products or at which significant demand for such products develops
may be slower than our current expectations.
As OLED panels continue to gain market acceptance as an alternative to TFT-LCD panels, if we are unable to
continue to develop and commercialize OLED technology in a commercially viable and timely manner to offset
declining sales of our TFT-LCD panels, or if customers prefer panels developed and manufactured by our competitors
utilizing competing technologies to OLED technology, this would have a material adverse effect on our financial
condition and results of operations. See also “—We operate in a highly competitive environment and we may not be
able to sustain our current market position.” above.
14
We will have significant capital requirements in connection with our business strategy and if capital resources are
not available we may not be able to implement our strategy and future plans.
In connection with our strategy to further enhance the diversity and capacity of our display panel production,
we anticipate that we will continue to incur significant capital expenditures for the construction of new production
facilities and the maintenance and enhancement of existing production facilities, particularly in connection with our
continued investments in OLED technology. Our significant recent and pending capital expenditures include the
following:
•
In August 2021, we announced plans to make investments in an aggregate amount of up to W3.3 trillion
in a new fabrication complex in Paju, Korea, P10, which will be used for the production of small- and
medium-sized OLED panels. We completed the construction of our new AP5 fabrication facility located
within such complex in February 2024 and have subsequently commenced mass production of medium-
sized OLED panels at such facility.
•
In response to and in anticipation of growing demand in the China market, we established a joint venture
with the government of Guangzhou to construct a new fabrication facility to manufacture next generation
large-sized OLED panels, which was established under the name of LG Display High-Tech (China) Co.,
Ltd., in July 2018. We currently hold a 70% ownership interest in the joint venture and the government of
Guangzhou holds the remaining 30% ownership interest. We commenced mass production of large-sized
OLED panels at such fabrication facility in July 2020.
•
In July 2017, we announced plans to make investments in an aggregate amount of up to W7.8 trillion
mainly in new large-sized and plastic OLED production lines in Paju, Korea. In July 2019, we announced
plans to make additional investments of W3.0 trillion in the previously announced new large-sized
OLED production lines. Certain of such investments have already been completed with respect to plastic
OLED panels and we commenced mass production of such panels in July 2019. However, our scheduled
investments in large-sized OLED panels pursuant to the July 2017 and July 2019 announcements have
been extended until the first quarter of 2028 due in part to increased uncertainties in the global economic
environment. We are in the process of developing and assessing the specifics of such planned
investments, including the timing.
We have continued to make investments to construct new production facilities as well as for other purposes in
order to proactively respond to the technological changes in the display industry and maintain a competitive market
position. However, we have reduced our capital expenditure levels in recent periods as part of our efforts to gain
financial stability by focusing on certain essential investments required to operate our business. In 2024, our total cash
outflows for capital expenditure, consisting of cash used in acquisition of property, plant and equipment, amounted to
W2.1 trillion, which represented a 38.8% decrease from W3.5 trillion in 2023. We currently expect that, in 2025, our
total capital expenditures on a cash out basis will be at a similar level to those in 2024 and will be used primarily to
continue to fund our previously announced investments related to our continued and ongoing transition to an OLED-
centric business structure, as well as other essential recurring investments. Such expected capital expenditures are
subject to periodic assessment, and we cannot provide any assurance that such expected capital expenditures may not
change materially after assessment.
These capital expenditures will be made well in advance of any additional sales that will be generated from
these expenditures. However, in the event of adverse market conditions, or if our actual expenditures significantly
exceed our planned expenditures, our external financing activities combined with our internal sources of liquidity may
not be sufficient to carry out our current and future operational plans, and we may decide not to expand the capacity of
certain of our facilities or construct new production facilities as scheduled or at all. Our ability to obtain additional
financing will depend upon a number of factors outside our control, including general economic, financial,
competitive, regulatory and other considerations.
In the past, difficulties affecting the global financial sectors, adverse conditions and volatility in the
worldwide credit and financial markets, fluctuations in oil and commodity prices and the general weakness of the
global economy have increased the uncertainty of global economic prospects in general and have adversely affected
the global and Korean economies. Because we rely on financing both within and outside of Korea from time to time,
difficulties affecting the global and Korean economies, including any increase in market volatility and their lingering
effects (including those in relation to the global COVID-19 pandemic and rapid increases in interest rates globally
from the second half of 2021 until recently to combat inflation, deterioration in economic and trade relations between
15
major economies (particularly between the United States and China), the invasion of Ukraine by Russia and ensuing
sanctions against Russia, the slowdown of economic growth in China and other major emerging market economies,
adverse economic and political conditions in Europe and Latin America and continuing geopolitical and social
instability in North Korea and various parts of the Middle East, including the escalation of hostilities in the Middle
East following the Israel-Hamas war), could adversely affect our ability to obtain sufficient financing on commercially
reasonable terms. The failure to obtain sufficient financing on commercially reasonable terms to complete our
expansion plans could delay or impair our ability to pursue our business strategy, which could materially and adversely
affect our business and results of operations.
Our manufacturing processes are complex and periodic improvements to increase efficiency can expose us to
potential disruptions in operations.
The manufacturing processes for TFT-LCD, OLED and other display products are highly complex, requiring
sophisticated and costly equipment that is periodically modified and upgraded to improve manufacturing yields and
product performance, and reduce unit manufacturing costs. These updates expose us to the risk that from time to time
production difficulties will arise that could cause delivery delays, reduced output or both. We cannot provide assurance
that we will not experience manufacturing problems in achieving acceptable output, product delivery delays or both as
a result of, among other factors, construction delays, difficulties in upgrading or modifying existing production lines or
building new plants, difficulties in modifying existing or adopting new manufacturing line technologies or processes or
delays in equipment deliveries, any of which could constrain our capacity and adversely affect our results of
operations.
We may be unable to successfully execute our growth strategy or manage and sustain our growth on a timely basis,
if at all, and, as a result, our business may be harmed.
We have experienced, and expect to continue to experience, periods of rapid growth in the scope and/or
complexity of our operations due to the building of new fabrication facilities and the expansion and conversion of
existing fabrication facilities to meet the evolving and anticipated demands of our customers. For example, we
established our AP4 fabrication facility to increase our production capacity of plastic OLED panels for mobile and
other products in July 2019, and we completed the construction of our new AP5 fabrication facility (which constitutes
a part of, and is located within, the larger P10 fabrication complex) to increase our production capacity of medium-
sized OLED panels in February 2024. See “Item 4.D. Property, Plants and Equipment—Current Facilities.” With
respect to our overseas facilities in recent years, in response to and in anticipation of growing demand in the China
market, in July 2018, we established and acquired a majority ownership interest in, a joint venture with the
government of Guangzhou to construct our new CO fabrication facility to manufacture next generation large-sized
OLED panels in Guangzhou, China. We commenced mass production of large-sized OLED panels at the CO
fabrication facility in July 2020 See also “—We will have significant capital requirements in connection with our
business strategy and if capital resources are not available we may not be able to implement our strategy and future
plans.” above.
As part of our continued efforts to increase the proportion of higher-value OLED panels with higher degrees
of manufacturing complexity in our product mix, we have also been reducing the production level of TFT-LCD panels
in recent years, including by ceasing production of such panels at, and closing several of, our manufacturing facilities.
See “—Risks Relating to Our Industry—A global economic downturn may result in reduced demand for our products
and adversely affect our profitability.” In addition, we have been implementing a phased exit strategy for our TFT-
LCD television panel manufacturing facility in China in light of TFT-LCD television panels’ higher degree of
sensitivity to market volatility and the current oversupply in the TFT-LCD television display panel market. More
recently, in September 2024, as part of our efforts to accelerate the ongoing shift in our strategic direction to focus on
OLED panels, we entered into an agreement with TCL CSOT to dispose of our entire equity interest in LG Display
(China) Co., Ltd. and LG Display Guangzhou Co., Ltd., which engage in TFT-LCD panel manufacturing and TFT-
LCD module manufacturing for televisions, respectively.
Sustained growth in the scope and complexity of our operations may strain our managerial, financial,
manufacturing and other resources. We may experience manufacturing difficulties in starting new production lines,
upgrading existing facilities or building new plants as a result of cost overruns, construction delays or shortages of, or
quality problems with, materials, labor or equipment, any of which could result in a loss of future revenue. We may
also incur opportunity costs if we misjudge the anticipated demand for certain display panel products and allocate our
limited resources in increasing production capacity for such display panel products at the cost of maintaining existing
16
or increasing production capacity of other display panel products that turn out to be more popular. In addition, we may
incur various costs and/or losses in connection with closing or disposing of certain facilities in connection with
rebalancing our product portfolio. Moreover, failure to keep up with our competitors in future investments in next-
generation panel fabrication facilities or in the upgrading of manufacturing capacity of existing facilities would impair
our ability to effectively compete within the display panel industry. Failure to obtain intended economic benefits from
expansion and other strategic projects could adversely affect our business, financial condition and results of operations.
If we cannot maintain high capacity utilization rates, our profitability will be adversely affected.
The production of display panels entails high fixed costs resulting from considerable expenditures for the
construction of complex fabrication and assembly facilities and the purchase of costly equipment, particularly for
productions involving new technologies, such as OLED. We aim to maintain high capacity utilization rates so that we
can allocate these fixed costs over a greater number of panels produced and realize a higher gross margin. However,
due to any number of reasons, including fluctuating demand for our products, overcapacity in the display industry or a
significant disruption in the supply chain of raw materials, equipment and labor, we may need to reduce or delay the
production of our products, resulting in lower-than-optimal capacity utilization rates. The high degree of uncertainty
regarding global economic prospects resulting from global pandemics, rapid increases in policy interest rates globally
to combat rising inflationary pressures, deterioration in economic and trade relations between major economies
(particularly between the United States and China), the invasion of Ukraine by Russia and ensuing sanctions against
Russia, the slowdown of economic growth in China and other major emerging market economies, adverse economic
and political conditions in Europe and Latin America and continuing geopolitical and social instability in North Korea
and various parts of the Middle East, including the escalation of hostilities in the Middle East following the Israel-
Hamas war, have adversely impacted and may further adversely impact global demand for our products. For example,
in November 2022, we temporarily reduced the production of large-sized OLED television display panels in one of our
manufacturing facilities as part of our efforts to further optimize our inventory levels as well as due to the weakening
demand for our products as a result of economic volatility and uncertainty. Additionally, in 2024, we adjusted the
production capacity of large-sized OLED display panels downward in response to changing market conditions to
improve our profitability. As such, we cannot provide assurance that we will be able to sustain our capacity utilization
rates in the future nor can we provide assurance that we will not reduce our utilization rates in the future as market and
industry conditions change.
Limited availability of raw materials, components and manufacturing equipment could materially and adversely
affect our business, results of operations or financial condition.
Our production operations depend on obtaining adequate supplies of quality raw materials and components on
a timely basis. As a result, it is important for us to control our raw material and component costs and reduce the effects
of fluctuations in price and availability. In general, we source most of our raw materials as well as key components,
such as glass substrates, driver integrated circuits and polarizers used in both our TFT-LCD and OLED products,
backlight units and liquid crystal materials used in our TFT-LCD products and hole transport materials and emission
materials used in our OLED products, from two or more suppliers for each key component. However, we may
establish a working relationship with a single supplier if we believe it is advantageous to do so due to performance,
quality, support, delivery, capacity, price or other considerations. We may experience shortages in the supply of these
key components, as well as other components or raw materials, as a result of, among other things, anticipated capacity
expansion in the display industry, our dependence on a limited number of suppliers or temporary disruptions in the
supply chain thereof due to factors outside of our control (including military conflicts such as the ongoing invasion of
Ukraine by Russia and the escalation of hostilities in the Middle East following the Israel-Hamas war, natural
disasters, health hazards such as the COVID-19 pandemic, civil unrest, work stoppages, strikes or other labor-related
disruptions involving our key suppliers, or trade sanctions or restrictions). Our results of operations would be
adversely affected if we were unable to obtain adequate supplies of high-quality raw materials or components in a
timely manner or make alternative arrangements for such supplies in a timely manner.
Furthermore, we may be limited in our ability to pass on increases in the cost of raw materials and
components to our customers. We do not typically enter into binding long-term contracts with our customers, and even
in those cases where we do enter into long-term agreements with certain of our major end-brand customers, the price
terms are contained in the purchase orders which are generally placed by them several weeks in advance of delivery.
Except under certain special circumstances, the price terms in the purchase orders are not subject to change. Prices for
our products are generally determined through negotiations with our customers, based generally on the complexity of
the product specifications and the labor and technology involved in the design or production processes. However, if we
17
become subject to any significant increase in the cost of raw materials or components that were not anticipated when
negotiating the price terms after the purchase orders have been placed, we may be unable to pass on such cost
increases to our customers.
We have purchased, and expect to purchase, a substantial portion of our equipment from a limited number of
qualified foreign and local suppliers. From time to time, increased demand for new equipment or replacement parts
may cause lead times to extend beyond those normally required by the equipment vendors. The unavailability of
equipment, delays in the delivery of equipment, or the delivery of equipment that does not meet our specifications, in
each case including replacement parts, could delay implementation of our expansion or other capital expenditure plans
and impair our ability to meet customer orders. This could result in a loss of revenue and cause financial stress on our
operations.
Advance purchase orders from our customers vary in volume from period to period, and we operate with a modest
level of inventory, which may make it difficult for us to efficiently allocate capacity on a timely basis in response to
changes in demand.
As part of our ongoing efforts to enhance our overall business structure, including efforts to improve our
profitability and reduce production volatility, we have been actively seeking, and plan to continue, to increase the
proportion of products manufactured under advance supply agreements that leverage our stable production capabilities
and technological leadership in advanced display products, including those utilizing OLED technology. However, we
continue to generate a majority of our sales from transactions pursuant to purchase orders on an ongoing basis from
our global customers. See “Item 4.B. Business Overview—Sales.” Generally, our major customers and their
designated system integrators provide us with advance rolling forecasts of their product requirements. However, in
certain situations, the volume of products under their firm purchase orders ultimately placed may be less than
anticipated based on these prior forecasts. Due to the cyclicality of the display industry, purchase order levels from our
customers have varied from period to period. Although we typically operate with an inventory level estimated for
several weeks, it may be difficult for us to adjust production costs or to allocate production capacity in a timely
manner to compensate for any such volatility in order volumes. Our inability to respond quickly to changes in overall
demand for display products as well as changes in product mix and specifications may result in lost revenue, which
would adversely affect our results of operations.
We may experience losses on inventories.
The lifecycle of products in the consumer electronics industries, which constitute the primary downstream
industries of our business, is continuing to decrease due to rapid technological advancements. Accordingly, frequent
new product introductions in the consumer electronics industries can result in a decline in the average selling prices of
our display panels and the obsolescence of our existing display panel inventory. In addition, from time to time, we
have experienced, and may continue to experience, inventory accumulation of certain of our display panel products as
a result of continued slowdown in demand from downstream industries, which in turn was in part due to longer
replacement cycles for products that utilize our display panels. Such events can result in a decrease in the stated value
of our panel inventory, which we value at the lower of cost or net realizable value.
We manage our inventory based on our customers’ and our own forecasts and typically operate with an
inventory level estimated for several weeks. Although adjustments are regularly made based on market conditions, we
typically deliver our goods to the customers within several weeks after a firm order has been placed. While we
maintain open channels of communication with our major customers to avoid unexpected decreases in firm orders or
subsequent changes to placed orders, and try to minimize our inventory levels, such actions by our customers may
have an adverse effect on our inventory management. An increase in our inventory levels may cause, among other
things, an increase in the cost of managing such inventories and a reduction in the value of inventory over time, which
in turn may negatively affect our results of operations due to higher cost of sales resulting from the recognition of
inventory valuation losses.
18
Unfavorable outcomes in investigations and proceedings against us and other TFT-LCD panel producers for
possible anti-competitive activities may have a direct and indirect material impact on our operations.
Since 2006, we and certain other TFT-LCD panel producers have been subject to an investigation by the U.S.
Department of Justice, various and separate claims brought by direct and indirect purchasers, and a number of legal
proceedings brought by attorneys general of various states in the United States, with respect to possible anti-
competitive activities in the TFT-LCD industry. We have since settled and resolved the investigation and various
subsequent legal proceedings, with the exception of the attorney general of the Commonwealth of Puerto Rico. The
settlements were duly approved by the applicable courts and, in the case of the state attorneys general actions, by their
respective state governments. In October 2022, the United States District Court for the District of Puerto Rico
dismissed the case without prejudice for failure to prosecute.
We have also been subject to investigations outside of the United States, including by the European
Commission, with respect to the same subject matter. We have since settled, resolved, and/or paid fines for such
actual investigations brought by the relevant competition authorities. Following the European Commission’s decision,
various follow-on claims were initiated in the United Kingdom by various claimants alleging damages as a result of
violation of European competition laws. We have since reached settlements with each of the claimants, with the
exception of a follow-on damages claim filed by Granville Technology Group and others (“Granville”) in the U.K. in
December 2016. In February 2024, the court rendered its judgment on such follow-on damages claim against the
defendants, including us. As of April 17, 2025, the amount for which we will be liable remains subject to further
determination by the court.
In addition, in December 2013, a class action complaint was filed by Hatzlacha, a consumer organization, on
behalf of Israeli consumers against LG Display and other defendants in the Central District in Israel. As of April 17,
2025, we have not been served with the complaint from Hatzlacha.
See “Item 8.A. Consolidated Statements and Other Financial Information—Legal Proceedings—Antitrust and
Others” for a more detailed description of these matters as well as other material legal proceedings that we are
involved in.
In each of the foregoing matters that are ongoing, we are continually evaluating the merits of the respective
claims and vigorously defending ourselves. Irrespective of the validity or the successful assertion of the claims
described above, we may incur significant costs with respect to litigating or settling any or all of the asserted claims.
While we continue to vigorously defend the various ongoing proceedings that we are involved in, it is possible that one
or more proceedings may result in cash outflow to settle or resolve these claims, which may have an adverse effect on
our operating results or financial condition.
We need to observe certain financial and other covenants under the terms of our debt obligations, the failure to
comply with which would put us in default under such debt obligations.
We rely on debt financing to satisfy a significant portion of our cash requirements for capital investments. As
of December 31, 2024, we had outstanding short-term borrowings of W970 billion (US$656 million) and long-term
debt (including current portion and prior to deducting discounts on bonds) in the amount of W13,582 billion
(US$9,190 million), consisting of W992 billion of Korean Won denominated bonds, US$100 million of U.S. dollar
denominated bonds, US$2,528 million of U.S. dollar denominated long-term borrowings, CNY20,164 million of CNY
denominated long-term borrowings and W4,669 billion of Korean Won denominated long-term borrowings. We are
subject to financial and other covenants, including maintenance of credit ratings and debt-to-equity ratios, under
certain of our debt obligations. The documentation for such debt also contains negative pledge provisions limiting our
ability to provide liens on our assets as well as cross-default and cross-acceleration clauses, which give related
creditors the right to accelerate the amounts due under such debt if an event of default or acceleration has occurred
with respect to our existing or future indebtedness, or if any material part of our indebtedness or indebtedness of our
subsidiaries is capable of being declared payable before the stated maturity date. In addition, such covenants restrict
our ability to raise future debt financing.
If we breach the financial or other covenants contained in the documentation governing our debt obligations,
our financial condition will be adversely affected to the extent we are not able to cure such breaches, obtain a waiver
from the relevant lenders or debtholders or repay the relevant debt.
19
Our results of operations are subject to exchange rate fluctuations.
There has been considerable volatility in foreign exchange rates between the Korean Won and major foreign
currencies in recent years. To the extent that we incur costs in one currency and make sales in another, our profit
margins may be affected by changes in the exchange rates between the two currencies.
Our sales of display panels are denominated mainly in U.S. dollars, while our purchases of raw materials are
denominated mainly in U.S. dollars and, to a much lesser extent, Chinese Yuan and Japanese Yen. The largest
proportion of our expenditures on capital equipment are denominated in Korean Won and, to a lesser extent, U.S.
dollars, Vietnamese Dong, Japanese Yen and Chinese Yuan. Accordingly, fluctuations in exchange rates, in particular
between the U.S. dollar and the Korean Won, between the Chinese Yuan and the Korean Won as well as between the
Japanese Yen and the Korean Won, affect our pre-tax income, and in recent years, the value of the Won relative to the
U.S. dollar, Chinese Yuan and Japanese Yen has fluctuated widely. Although a depreciation of the Korean Won
against the U.S. dollar increases the Korean Won value of our export sales and enhances the price-competitiveness of
our products in foreign markets in U.S. dollar terms, it also increases the cost of imported raw materials and
components in Korean Won terms and our cost in Korean Won of servicing our U.S. dollar denominated debt. A
depreciation of the Korean Won against the Chinese Yuan or Japanese Yen increases the Korean Won cost of our
Chinese Yuan- or Japanese Yen-denominated purchases of equipment, raw materials or components, as applicable,
and, to the extent we have any debt denominated in Chinese Yuan or Japanese Yen, our cost in Korean Won of
servicing such debt, but has relatively little impact on our sales as most of our sales are denominated in U.S. dollars. In
addition, continued exchange rate volatility may also result in foreign exchange losses for us. Although a depreciation
of the Korean Won against the U.S. dollar, in general, has a net positive impact on our results of operations that more
than offsets the net negative impact caused by a depreciation of the Korean Won against the Chinese Yuan or Japanese
Yen, we cannot provide assurance that the exchange rate of the Korean Won against foreign currencies will not be
subject to significant fluctuations, or that the impact of such fluctuations will not adversely affect the results of our
operations.
Our business relies on our patent rights which may be narrowed in scope or found to be invalid or otherwise
unenforceable.
Our success will depend, to a significant extent, on our ability to obtain and enforce our patent rights both in
Korea and worldwide. The coverage claimed in a patent application can be significantly reduced before a patent is
issued, either in Korea or abroad. Consequently, we cannot provide assurance that any of our pending or future patent
applications will result in the issuance of patents. Patents issued to us may be subjected to further proceedings limiting
their scope and may not provide significant proprietary protection or competitive advantage. Our patents also may be
challenged, circumvented, invalidated or deemed unenforceable. In addition, because patent applications in certain
countries generally are not published until more than 18 months after they are first filed, and because publication of
discoveries in scientific or patent literature often lags behind actual discoveries, we cannot be certain that we were, or
any of our licensors was, the first creator of inventions covered by pending patent applications, that we or any of our
licensors will be entitled to any rights in purported inventions claimed in pending or future patent applications, or that
we were, or any of our licensors was, the first to file patent applications on such inventions.
Furthermore, pending patent applications or patents already issued to us or our licensors may become subject
to dispute, and any dispute could be resolved against us. For example, we may become involved in re-examination,
reissue or interference proceedings and the result of these proceedings could be the invalidation or substantial
narrowing of our patent claims. We also could be subject to court proceedings that could find our patents invalid or
unenforceable or could substantially narrow the scope of our patent claims. In addition, depending on the jurisdiction,
statutory differences in patentable subject matter may limit the protection we can obtain on some of our inventions.
Failure to protect our intellectual property rights could impair our competitiveness and harm our business and
future prospects.
We believe that developing new products and technologies that can be differentiated from those of our
competitors is critical to the success of our business. We take active measures to obtain international protection of our
intellectual property by obtaining patents and undertaking monitoring activities in our major markets. However, we
cannot assure you that the measures we are taking will effectively deter competitors from improper use of our
proprietary technologies. Our competitors may misappropriate our intellectual property, disputes as to ownership of
intellectual property may arise and our intellectual property may otherwise become known or independently developed
by our competitors.
20
Any failure to protect our intellectual property could impair our competitiveness and harm our business and
future prospects.
Our rapid introduction of new technologies and products may increase the likelihood that third parties will assert
claims that our products infringe upon their proprietary rights.
The rapid technological changes that characterize our industry require that we quickly implement new
processes and components with respect to our products. Often with respect to recently developed processes and
components, a degree of uncertainty exists as to who may rightfully claim ownership rights in such processes and
components. Uncertainty of this type increases the risk that claims alleging that such components or processes infringe
upon third party rights may be brought against us. Although we take and will continue to take steps to ensure that our
new products do not infringe upon third party rights, if our products or manufacturing processes are found to infringe
upon third party rights, we may be subject to significant liabilities and be required to change our manufacturing
processes or be prohibited from manufacturing certain products, which could have a material adverse effect on our
operations and financial condition.
We may be required to defend against charges of infringement of patent or other proprietary rights of third
parties. Although patent and other intellectual property disputes in our industry have often been settled through
licensing or similar arrangements, such defense could require us to incur substantial expense and to divert significant
resources of our technical and management personnel, and could result in our loss of rights to develop or make certain
products or require us to pay monetary damages or royalties to license proprietary rights from third parties.
Furthermore, we cannot be certain that the necessary licenses would be available to us on acceptable terms, if at all.
Accordingly, an adverse determination in a judicial or administrative proceeding or failure to obtain necessary licenses
could prevent us from manufacturing and selling certain of our products. Any such litigation, whether successful or
unsuccessful, could result in substantial costs to us and diversions of our resources, either of which could adversely
affect our business.
We rely on technology provided by third parties and our business will suffer if we are unable to renew our licensing
arrangements with them.
From time to time, we have obtained licenses for patent, copyright, trademark and other intellectual property
rights to process and device technologies used in the production of our display panels. We have entered into key
licensing arrangements with third parties, for which we have made, and continue to make, periodic license fee
payments. In addition, we also have cross-license agreements with certain other third parties. These agreements
terminate upon the expiration of the respective terms of the patents. See “Item 5.C. Research and Development,
Patents and Licenses, etc.—Intellectual Property—License Agreements.”
If we are unable to renew our technology licensing arrangements on acceptable terms, we may lose the legal
protection to use certain of the processes we employ to manufacture our products and be prohibited from using those
processes, which may prevent us from manufacturing and selling certain of our products, including our key products.
In addition, we could be at a disadvantage if our competitors obtain licenses for protected technologies on more
favorable terms than we do.
In the future, we may also need to obtain additional patent licenses for new or existing technologies. We
cannot provide assurance that these license agreements can be obtained or renewed on acceptable terms or at all, and if
not, our business and operating results could be adversely affected.
We rely upon trade secrets and other unpatented proprietary know-how to maintain our competitive position in the
display panel industry and any loss of our rights to, or unauthorized disclosure of, our trade secrets or other
unpatented proprietary know-how could negatively affect our business.
We rely upon trade secrets, unpatented proprietary know-how and information, as well as continuing
technological innovation in our business. The information we rely upon includes price forecasts, core technology and
key customer information. We enter into confidentiality agreements with each of our employees and consultants upon
the commencement of an employment or consulting relationship. These agreements generally provide that all
inventions, ideas, discoveries, improvements and copyrightable material made or conceived by the individual arising
out of the employment or consulting relationship and all confidential information developed or made known to the
individual during the term of the relationship is our exclusive property. We cannot provide assurance that these types
21
of agreements will be sufficient to prevent the misappropriation of our intellectual property rights, will be fully
enforceable, or that they will not be breached. We also cannot be certain that we will have adequate remedies for any
such breach. The disclosure of our trade secrets or other know-how as a result of such a breach could adversely affect
our business. In addition, our competitors may come to know about or determine our trade secrets and other
proprietary information through a variety of methods. Disputes may arise concerning the ownership of intellectual
property or the applicability or enforceability of our confidentiality agreements, and there can be no assurance that any
such disputes would be resolved in our favor. Furthermore, others may acquire or independently develop similar
technology, or if patents are not issued with respect to technologies arising from our research, we may not be able to
maintain information pertinent to such research as proprietary technology or trade secrets and that could have an
adverse effect on our competitive position within the display panel industry.
If our cybersecurity is breached, we may incur significant legal and financial exposure, damage to our reputation
and a loss of confidence of our customers.
Our business involves the storage and transmission of confidential information relating to us as well as our
customers and suppliers, and any breach in our cybersecurity could expose us to a risk of loss, the improper use or
disclosure of such information, ensuing potential liability or litigation, any of which could harm our reputation and
adversely affect our business. Although there has been no material instance where an unauthorized party was able to
obtain access to our data or our customers’ data, there can be no assurance that we will not be vulnerable to cyber-
attacks in the future. See “Item 16K. Cybersecurity.”
Our cybersecurity measures may also fail due to employee error, malfeasance or otherwise. Instituting
appropriate access controls and safeguards across our information technology infrastructure is challenging.
Furthermore, outside parties may attempt to fraudulently induce employees to disclose sensitive information in order
to gain access to our data or our customers’ data or accounts or may otherwise obtain access to such data or accounts.
Because the techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change
frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques
or implement adequate preventative measures. If an actual or perceived breach of our cybersecurity occurs or the
market perception of the effectiveness of our cybersecurity measures is adversely affected, we may incur significant
legal and financial exposure, including legal claims and regulatory fines and penalties, damage to our reputation and a
loss of confidence of our customers, which could have an adverse effect on our business, financial condition and
results of operations.
We rely on key researchers and engineers, senior management and production facility operators, and the loss of the
services of any such personnel or the inability to attract and retain them may negatively affect our business.
Our success depends to a significant extent upon the continued service of our research and development and
engineering personnel, and on our ability to continue to attract, retain and motivate qualified researchers and engineers,
especially during periods of rapid growth. In particular, our focus on leading the market in introducing new products
and advanced manufacturing processes has meant that we must continue to recruit research and development personnel
and engineers with expertise in cutting-edge technologies.
We also depend on the services of experienced key senior management, and if we lose their services, it would
be difficult to find and integrate replacement personnel in a timely manner, if at all. We also employ highly skilled line
operators at our various production facilities.
Although as part of our efforts to recruit and retain key personnel, we offer various benefits such as salary
increases, promotions, housing and children’s education expenses, there can be no assurance that such benefits will be
sufficient to attract and retain key personnel. The loss of the services of any of our key research and development and
engineering personnel, senior management or skilled operators without adequate replacement, or the inability to attract
new qualified personnel, would have a material adverse effect on our operations.
The interests of LG Electronics, our largest shareholder, and any directors or officers nominated by it, may differ
from or conflict with those of us or our other shareholders.
When exercising its rights as our largest shareholder, LG Electronics may take into account not only our
interests but also its interests and the interests of its affiliates. LG Electronics’ interests may at times conflict with ours
in a number of areas relating to our business, including potential acquisitions of businesses or properties, incurrence of
22
indebtedness, financial commitments, sales and marketing functions, indemnity arrangements, service arrangements
and the exercise by LG Electronics of significant influence over our management and affairs. See “Item 6.A. Directors
and Senior Management” for a description of the composition of our current board of directors and senior
management.
Labor unrest may disrupt our operations.
As of December 31, 2024, more than half of our employees based in Korea were union members, and
production employees accounted for substantially all of these members. We have a collective bargaining arrangement
with our labor union, which is negotiated once a year. Any deterioration in our relationship with our employees or
labor unrest resulting in a work stoppage or strike may have a material adverse effect on our financial condition and
results of operations.
We are subject to strict safety and environmental regulations and we may be subject to fines or restrictions that
could cause our operations to be interrupted.
Our manufacturing processes involve hazardous materials and generate chemical waste, waste water and
other industrial waste at various stages in the manufacturing process, and we are subject to a variety of laws and
regulations relating to the use, storage, discharge and disposal of such chemical by-products and waste substances. We
have enacted safety measures, engaged in employee education on handling such materials and installed various types
of safety and anti-pollution equipment, consistent with industry standards, for the treatment of chemical waste and
equipment for the recycling of treated waste water at our various facilities. See “Item 4.B. Business Overview—
Environmental Matters” for a description of the anti-pollution equipment that we have installed in our various
facilities. However, we cannot provide assurance that our protocols will always be followed and safety or
environmental related claims will not be brought against us or that the local or national governments will not take steps
toward adopting more stringent safety or environmental standards.
Any failure on our part to comply with any present or future safety and environmental regulations could result
in the assessment of damages or imposition of fines and penalties against us, suspension of production or a cessation of
operations. From January 1, 2022 to December 31, 2024, we and certain of our current and former employees have
received and paid aggregate fines and penalties of approximately W44.6 million in connection with violations of
applicable safety and environmental regulations under Korean law.
Furthermore, safety and environmental regulations could require us to acquire costly equipment or to incur
other significant compliance expenses that may materially and negatively affect our financial condition and results of
operations.
Impositions of anti-dumping duties, safeguard duties, countervailing duties, quotas or tariffs may have an
adverse impact on our export sales.
As a manufacturer with global sales and operations, we export a significant portion of our products
manufactured in Korea, China and Vietnam. We continue to carefully monitor developments with respect to trade
remedy policies, including quotas, tariffs, anti-dumping duties, safeguard duties or countervailing duties, in all major
markets in which we sell our products and seek to mitigate the related risks by adjusting supply and export
arrangements as necessary. However, there can be no assurance that the free trade agreements between Korea and its
major trading partners will not be amended or anti-dumping duties, safeguard duties, countervailing duties, quotas or
tariffs will not be imposed on our sales of products abroad in the future. The occurrence of any such events, including
those described below, may have a material adverse impact on our business, financial condition and results of
operation.
In early 2025, the U.S. government took a number of measures to increase tariffs on imports, which measures
initially targeted specific industries (including steel and automobiles) and a small number of countries (including
China, Mexico and Canada). In April 2025, the U.S. government additionally imposed a universal “reciprocal” tariff
which applies to all imports from all of its trading partners (including those with free trade agreements with the United
States), with a base rate of 10% and higher rates imposed on imports from certain enumerated countries (including
Korea at 25%, as well as China at 125% (on top of the previously applicable tariff of 20%) and Vietnam at 46%) on a
country-by-country basis, subject to certain exceptions. However, the U.S. government subsequently paused the
application of such higher rates for a period of 90 days for all countries, except China. While our direct exports to
23
customers in the United States are relatively small, such tariffs may have a material adverse effect on our downstream
customers that manufacture finished products using our display panels in countries subject to such tariffs and export
those products to the United States. If tariffs on the products manufactured by our downstream customers increase, the
resulting price increases may reduce consumer demand for such products in the United States, which may in turn
adversely affect the demand for our display panels.
Historically, tariffs have led to increased trade and political tensions. In response to the recent tariffs imposed
by the U.S. government, various countries have implemented, or have announced plans to implement, retaliatory tariffs
on goods produced in the United States. Political tensions as a result of trade policies could reduce trade volume,
investment, technological exchange and other economic activities between major international economies, resulting in
a material adverse effect on global economic conditions and the stability of global financial markets. If further tariffs
are imposed on a broader range of goods, or if further retaliatory trade measures are taken by impacted foreign
countries in response to additional tariffs, we may be required to raise our prices or incur additional expenses, which
may have a material adverse impact on our business, financial condition and results of operations.
Risks Relating to our American Depositary Shares, or ADSs, or our Common Stock
Future sales of shares of our common stock or convertible securities in the public market may depress our stock
price and make it difficult for you to recover the full value of your investment in our common stock or our ADSs.
We cannot predict the effect, if any, that market sales of shares of our common stock or other securities that
may be converted into shares of our common stock or the availability of such shares or securities for sale will have on
the market price of our common stock prevailing from time to time.
In March 2024, as part of our ongoing efforts to improve our financial condition and liquidity, we issued
142,184,300 new shares of common stock (including 1,038,078 new shares represented by 2,076,156 ADSs) at a
subscription price of W9,090 per share (and US$3.450019 per ADS) pursuant to a preemptive rights offering to our
existing shareholders, including ADS holders, followed by a public offering in Korea with respect to the fractional
shares from the rights offering. We have used the proceeds of such offering to fund our capital investments, general
corporate purposes (including purchases of raw materials) and the repayment of certain of our outstanding debt.
Immediately following the completion of such offering, the number of issued and outstanding shares of our common
stock increased to 500,000,000. In particular, our largest shareholder, LG Electronics, subscribed for 47,968,206 new
shares of our common stock for a cash consideration of W436 billion under such offering. As a result of its
participation, following the completion of such offering, LG Electronics’ shareholding in us decreased from 37.9% to
36.7%. LG Electronics currently owns 36.7% of our voting stock. There is no assurance that LG Electronics will not
sell all or a part of its ownership interest in us in the future.
We have no current plans for any additional offerings of our common stock, ADSs or securities exchangeable
for or convertible into such securities. However, it is possible that we may decide to offer or sell such securities in the
future. Any future sales by LG Electronics or any future issuance by us of a significant number of shares of our
common stock or other securities that may be converted into shares of our common stock in the public market, or the
perception that any of these events may occur, could cause the market price of our common stock to decrease or to be
lower than it might be in the absence of these events or perceptions.
24
Our public shareholders may have more difficulty protecting their interests than they would as shareholders of a
U.S. corporation.
Our corporate affairs are governed by our articles of incorporation and by the laws governing Korean
corporations. The rights and responsibilities of our shareholders and members of our board of directors under Korean
law may be different from those that apply to shareholders and directors of a U.S. corporation. For example, minority
shareholder rights afforded under Korean law often require the minority shareholder to meet minimum shareholding
requirements in order to exercise certain rights. In the case of public companies, a shareholder must own, individually
or collectively with other shareholders, at least 1% of our common stock, or 0.01% of our common stock for at least
six consecutive months, in order to file a derivative suit on our behalf. While the facts and circumstances of each case
will differ, the duty of care required of a director under Korean law may not be the same as the fiduciary duty of a
director of a U.S. corporation. Therefore, holders of our common stock or our ADSs may have more difficulty
protecting their interests against actions of our management, members of our board of directors or largest shareholders
than they would as shareholders of a U.S. corporation.
You may be limited in your ability to deposit or withdraw the common stock underlying the ADSs, which may
adversely affect the value of your investment.
Under the terms of our deposit agreement, holders of common stock may deposit such common stock with the
depositary’s custodian in Korea and obtain ADSs, and holders of ADSs may surrender ADSs to the depositary and
receive common stock. However, to the extent that a deposit of common stock exceeds the difference between:
•
the aggregate number of shares of common stock we have consented to allow to be deposited for the
issuance of ADSs (including deposits in connection with offerings of ADSs and stock dividends or other
distributions relating to ADSs); and
•
the number of shares of common stock on deposit with the custodian for the benefit of the depositary at
the time of such proposed deposit,
such common stock will not be accepted for deposit unless (1) our consent, subject to governmental authorization,
with respect to such deposit has been obtained or (2) such consent is no longer required under Korean laws and
regulations.
Under the terms of the deposit agreement, no consent is required if the shares of common stock are obtained
through a dividend, free distribution, rights offering or reclassification of such stock. The current limit on the number
of shares that may be deposited into our ADR facility is 68,095,700 as of April 17, 2025. The number of shares issued
or sold in any subsequent offering by us or our major shareholders, subject to government authorization, raises the
limit on the number of shares that may be deposited into the ADR facility, except to the extent such deposit is
prohibited by applicable laws or violates our articles of incorporation, or we decide with the ADR depositary to limit
the number of shares of common stock so offered that would be eligible for deposit under the deposit agreement in
order to maintain liquidity for the shares in Korea as may be requested by the relevant Korean authorities. We might
not consent to the deposit of any additional shares of common stock. As a result, if a holder surrenders ADSs and
withdraws common stock, it may not be able to deposit the common stock again to obtain ADSs.
Holders of ADSs will not have preemptive rights in some circumstances.
The Korean Commercial Code, as amended, and our articles of incorporation require us, with some
exceptions, to offer shareholders the right to subscribe for new shares of our common stock in proportion to their
existing shareholding ratio whenever new shares are issued, except under certain circumstances as provided in our
articles of incorporation. Accordingly, if we issue new shares to non-shareholders based on such exception, a holder of
our ADSs may experience dilution in its holdings. Furthermore, if we offer any right to subscribe for additional shares
of our common stock or any rights of any other nature to existing shareholders subject to their preemptive rights, the
depositary, after consultation with us, may make the rights available to holders of our ADSs or use reasonable efforts
to dispose of the rights on behalf of such holders and make the net proceeds available to such holders. The depositary,
however, is not required to make available to holders any rights to purchase any additional shares of our common
stock unless it deems that doing so is lawful and feasible and
•
a registration statement filed by us under the U.S. Securities Act of 1933, as amended, is in effect with
respect to those shares; or
25
•
the offering and sale of those shares is exempt from or is not subject to the registration requirements of
the Securities Act.
We are under no obligation to file any registration statement with the SEC or to endeavor to cause such a
registration statement to be declared effective. Moreover, we may not be able to establish an exemption from
registration under the Securities Act. Accordingly, a holder of our ADSs may be unable to participate in our rights
offerings and may experience dilution in its holdings. If a registration statement is required for a holder of our ADSs to
exercise preemptive rights but is not filed by us or is not declared effective, the holder will not be able to exercise its
preemptive rights for additional ADSs and it will suffer dilution of its equity interest in us. If the depositary is unable
to sell rights that are not exercised or not distributed or if the sale is not lawful or feasible, it will allow the rights to
lapse, in which case the holder will receive no value for these rights.
Holders of ADSs will not be able to exercise dissent and appraisal rights unless they have withdrawn the underlying
shares of our common stock and become our direct shareholders.
In some limited circumstances, including the transfer of the whole or any significant part of our business and
our merger or consolidation with another company, dissenting shareholders have the right to require us to purchase
their shares under Korean law. However, a holder of our ADSs will not be able to exercise such dissent and appraisal
rights if the depositary refuses to do so on their behalf. Our deposit agreement does not require the depositary to take
any action in respect of exercising dissent and appraisal rights. In such a situation, holders of our ADSs must initiate
the withdrawal of the underlying common stock from the ADS facility (and incur charges relating to that withdrawal)
by the day immediately following the date of public disclosure of our board of directors’ resolution of a merger or
other events triggering appraisal rights and become our direct shareholder prior to the record date of the shareholders’
meeting at which the relevant transaction is to be approved, in order to exercise dissent and appraisal rights.
Dividend payments and the amount you may realize upon a sale of our common stock or ADSs that you hold will be
affected by fluctuations in the exchange rate between the U.S. dollar and the Korean Won.
Cash dividends, if any, in respect of the shares represented by our ADSs will be paid to the depositary in
Korean Won and then converted by the depositary into U.S. dollars, subject to certain conditions. Accordingly,
fluctuations in the exchange rate between the Korean Won and the U.S. dollar will affect, among other things, the
amounts a holder will receive from the depositary in respect of dividends, the U.S. dollar value of the proceeds that a
holder would receive upon sale in Korea of the shares of our common stock obtained upon surrender of ADSs and the
secondary market price of ADSs. Such fluctuations will also affect the U.S. dollar value of dividends and sales
proceeds received by holders of our common stock.
Risks Relating to Korea
If economic conditions in Korea deteriorate, our current business and future growth could be materially and
adversely affected.
We are incorporated in Korea, and a substantial portion of our operations and assets are located in Korea. As a
result, we are subject to political, economic, legal and regulatory risks specific to Korea, and our performance and
successful fulfillment of our operational strategies are dependent in large part on the overall Korean economy.
In addition, future growth of the Korean economy is subject to many factors beyond our control, including
developments in the global economy. In recent years, adverse conditions and volatility in the worldwide financial
markets, fluctuations in oil and commodity prices, supply chain disruptions and the increasing weakness of the global
economy, mainly due to the COVID-19 pandemic, Russia’s invasion of Ukraine and ensuing sanctions against Russia,
difficulties faced by several banks in the United States and Europe and the escalation of hostilities in the Middle East
following the Israel-Hamas war as well as rapid increases in policy interest rates globally, have contributed to the
uncertainty of global economic prospects in general and have adversely affected, and may continue to adversely affect,
the Korean economy.
The value of the Won relative to major foreign currencies, in particular the U.S. dollar, has fluctuated
significantly and, as a result of uncertain global and Korean economic, social and political conditions, there has been
significant volatility and an overall decrease in the stock prices of Korean companies recently. Future declines in the
Korea Composite Stock Price Index (the “KOSPI”), and large amounts of sales of Korean securities by foreign
26
investors and subsequent repatriation of the proceeds of such sales may adversely affect the value of the Won, the
foreign currency reserves held by financial institutions in Korea, and the ability of Korean companies to raise
capital. Any future deterioration of the Korean or global economy could adversely affect our business, financial
condition and results of operations.
Developments that could have an adverse impact on Korea’s economy include:
•
declines in consumer confidence and a slowdown in consumer spending, including as a result of severe
health epidemics and higher levels of market interest rates;
•
political uncertainty or increasing strife among or within political parties in Korea and the ensuing
societal unrest, including as a result of political uncertainty following the removal of President Yoon
from office on April 4, 2025 by the Constitutional Court of Korea, which upheld the National
Assembly’s vote to impeach him following his declaration of martial law in December 2024 (which
declaration had been swiftly rescinded), as a result of which a presidential election to elect his successor
will be held on June 3, 2025;
•
rising inflationary pressures leading to increases in the costs of goods and services and a decrease in
purchasing power;
•
adverse conditions or developments in the economies of countries and regions that are important export
markets for Korea, such as China, the United States, Europe and Japan, or in emerging market economies
in Asia or elsewhere, including as a result of deteriorating economic and trade relations between the
United States and such other countries (including the imposition of significant tariffs by the United States
on its trading partners, which has been followed by retaliatory tariffs in some cases) and increased
uncertainties in the global financial markets and industry;
•
the imposition of significant tariffs on Korea’s exports by any of its major export markets, such as the
imposition of a 25% tariff on Korea’s exports to the United States announced in April 2025, which has
since been paused for a period of 90 days;
•
adverse changes or volatility in foreign currency reserve levels, commodity prices (including oil prices),
exchange rates (including fluctuation of the U.S. dollar, the Euro or the Japanese Yen exchange rates or
revaluation of the Chinese Yuan), interest rates, inflation rates or stock markets;
•
the occurrence of severe health epidemics, such as the COVID-19 pandemic, or other severe health
epidemics in Korea or other parts of the world;
•
deterioration in economic or diplomatic relations between Korea and its trading partners or allies,
including deterioration resulting from territorial or trade disputes or disagreements in foreign policy;
•
increased sovereign default risk in select countries and the resulting adverse effects on the global
financial markets;
•
a deterioration in the financial condition or performance of small- and medium-sized enterprises and
other companies in Korea due to the Korean government’s policies to increase minimum wages and limit
working hours of employees;
•
investigations of large Korean business groups and their senior management for possible misconduct;
•
a continuing rise in the level of household debt and increasing delinquencies and credit defaults by retail
and small- and medium-sized enterprise borrowers in Korea;
•
shortages of imported raw materials, natural resources, rare earth minerals or component parts, including
semiconductors, due to disruptions to the global supply chain;
•
the economic impact of any pending or future free trade agreements or of any changes to existing free
trade agreements;
•
social and labor unrest;
•
substantial changes in the market prices of Korean real estate;
27
•
a substantial decrease in tax revenues and a substantial increase in the Korean government’s expenditures
for fiscal stimulus measures, unemployment compensation and other economic and social programs, in
particular in light of the Korean government’s ongoing efforts to provide emergency relief payments to
households and emergency loans to corporations in need of funding in light of COVID-19 as well as
recent interest rate increases, which, together, would likely lead to a national budget deficit as well as an
increase in the Korean government’s debt;
•
financial problems or lack of progress in the restructuring of Korean business groups, other large troubled
companies, their suppliers or the financial sector;
•
loss of investor confidence arising from corporate accounting irregularities or corporate governance
issues concerning certain Korean companies;
•
increases in social expenditures to support an aging population in Korea or decreases in economic
productivity due to the declining population size in Korea;
•
a continued decrease in the population and birthrates in Korea;
•
geopolitical uncertainty and the risk of further attacks by terrorist groups around the world;
•
hostilities or political or social tensions involving countries in the Middle East (including those resulting
from the escalation of hostilities in the Middle East following the Israel-Hamas war) and Northern Africa
and any material disruption in the global supply of oil or sudden increase in the price of oil;
•
natural or man-made disasters that have a significant adverse economic or other impact on Korea or its
major trading partners;
•
hostilities, political or social tensions involving Russia (including the invasion of Ukraine by Russia and
the ensuing actions that the United States and other countries have taken or may take in the future, such
as the imposition of sanctions against Russia) and the resulting adverse effects on the global supply of oil
and other natural resources and the global financial markets; and
•
an increase in the level of tensions or an outbreak of hostilities between North Korea and Korea or the
United States.
Escalations in tensions with North Korea could have an adverse effect on us and the market value of our common
stock and ADSs.
Relations between Korea and North Korea have been tense throughout Korea’s modern history. The level of
tension between the two Koreas has fluctuated and may increase abruptly as a result of current and future events. In
particular, there have been heightened security concerns in recent years stemming from North Korea’s nuclear weapon,
ballistic missile and satellite programs as well as its hostile military actions against Korea. Some of the significant
incidents in recent years include the following:
•
North Korea renounced its obligations under the Nuclear Non-Proliferation Treaty in January 2003 and
has conducted six rounds of nuclear tests since October 2006, including claimed detonations of hydrogen
bombs and warheads that can be mounted on ballistic missiles. Over the years, North Korea has
continued to conduct a series of missile tests, including missiles launched from submarines and
intercontinental ballistic missiles that it claims can reach the United States mainland. North Korea has
increased the frequency of such activities since the beginning of 2022, firing numerous ballistic missiles,
including intercontinental ballistic missiles, and in November 2023, successfully launched its first spy
satellite. In response, the Korean government has repeatedly condemned the provocations and flagrant
violations of relevant United Nations Security Council resolutions. In February 2016, the Korean
government also closed the inter-Korea Gaeseong Industrial Complex in response to North Korea’s
fourth nuclear test in January 2016. Internationally, the United Nations Security Council has passed a
series of resolutions condemning North Korea’s actions and significantly expanding the scope of
sanctions applicable to North Korea, most recently in December 2017 in response to North Korea’s
intercontinental ballistic missile test in November 2017. Over the years, the United States and the
European Union have also expanded their sanctions applicable to North Korea.
28
•
In March 2010, a Korean naval vessel was destroyed by an underwater explosion, killing many of the
crewmen on board. The Korean government formally accused North Korea of causing the sinking, while
North Korea denied responsibility. Moreover, in November 2010, North Korea fired more than one
hundred artillery shells that hit Korea’s Yeonpyeong Island near the Northern Limit Line, which acts as
the de facto maritime boundary between Korea and North Korea on the west coast of the Korean
peninsula, causing casualties and significant property damage. The Korean government condemned
North Korea for the attack and vowed stern retaliation should there be further provocation.
North Korea’s economy also faces severe challenges, which may further aggravate social and political
pressures within North Korea. Although bilateral summit meetings were held between Korea and North Korea in
April, May and September 2018 and between North Korea and the United States in June 2018, February 2019 and
June 2019, there can be no assurance that the level of tensions affecting the Korean peninsula will not escalate in the
future. Any increase in tensions, which may occur, for example, if North Korea experiences a leadership crisis,
high-level contacts between Korea and North Korea or between the United States and North Korea break down or
further military hostilities occur, could have a material adverse effect on the Korean economy and on our business,
financial condition and results of operations and the market value of our common stock and ADSs.
If the Korean government deems that emergency circumstances are likely to occur, it may restrict holders of our
ADSs and the depositary from converting and remitting dividends and other amounts in U.S. dollars.
Under the Korean Foreign Exchange Transaction Law, if the Korean government deems that certain
emergency circumstances, including sudden fluctuations in interest rates or exchange rates, extreme difficulty in
stabilizing the balance of payments or substantial disturbance in the Korean financial and capital markets, are likely to
occur, it may impose any necessary restrictions as requiring Korean or foreign investors to obtain prior approval from
the Ministry of Economy and Finance for the acquisition of Korean securities or the repatriation of interest, dividends
or sales proceeds arising from disposition of such securities or other transactions involving foreign exchange. See
“Item 10.D. Exchange Controls.”
Item 4. INFORMATION ON THE COMPANY
Item 4.A. History and Development of the Company
We are a leading innovator of TFT-LCD, OLED and other display panel technologies. We manufacture
display panels in a broad range of sizes and specifications primarily for use in IT products (comprising notebook
computers, desktop monitors and tablet computers), televisions and various other applications, including mobile
devices and automotive displays.
The origin of our display business, which first started with TFT-LCD panels, can be traced to the TFT-LCD
research that began in 1987 at the Goldstar R&D Center, which was then part of LG Electronics Inc. TFT-LCD
research continued at the Anyang R&D Center, a research and development center established by LG Electronics in
1990 in Anyang, Korea, which was subsequently moved to our Paju Display Cluster in 2008, and which today
continues to lead our technology innovation efforts. In 1993, the TFT-LCD business division was launched within LG
Electronics, and in September 1995 mass production of TFT-LCD panels began at P1, its first fabrication facility,
producing mainly TFT-LCD panels for notebook computers and other applications. In December 1997, LG Semicon
Inc., a subsidiary of LG Electronics, began mass production at P2, producing mainly TFT-LCD panels for notebook
computers.
We were incorporated in 1985 under the laws of the Republic of Korea under the original name of Goldstar
Software Co., Ltd., a subsidiary of LG Electronics whose main business was the development and marketing of
software, which changed its name to LG Software, Ltd. in January 1995 and subsequently to LG Soft, Ltd. in January
1997. At the end of 1998, LG Electronics and LG Semicon transferred their respective TFT-LCD-related businesses to
LG Soft, which, as part of the business transfer, changed its name to LG LCD Co., Ltd.
In July 1999, LG Electronics entered into a joint venture agreement with Koninklijke Philips Electronics
N.V., pursuant to which Philips Electronics acquired a 50% interest in LG LCD. In connection with this transaction,
LG LCD transferred its existing software-related business to LG Electronics in order to focus solely on the TFT-LCD
business. The joint venture, which was renamed LG.Philips LCD Co., Ltd., was officially launched in August 1999. In
July 2004, we completed our initial public offering and listed shares of our common stock on the Korea Exchange
29
under the identifying code “034220” and our ADSs on the New York Stock Exchange under the symbol “LPL”. Prior
to the listings, LG Electronics and Philips Electronics terminated the joint venture agreement and entered into a
shareholders’ agreement to reflect new arrangements between them as controlling shareholders. The shareholders’
agreement automatically terminated upon Philips Electronics’ sale of all of its remaining ownership interest in us in
March 2009. Effective March 3, 2008, we changed our name from LG.Philips LCD Co., Ltd. to LG Display Co., Ltd.
in order to reflect the expansion of our business scope and shift in business model, fully expressing our commitment to
the future.
We launched our OLED Business Unit in June 2008 in anticipation of future growth of the OLED
business. The origin of our OLED business began with our acquisition of LG Electronics’ active matrix OLED, or
AMOLED, business in January 2008 by way of taking over its inventory, intellectual property rights and employees
related to the AMOLED business. In 2012, partly in recognition of the growing importance of OLED to the future of
our business, especially in connection with large-sized products, we restructured our internal organization relating to
our OLED business, breaking up the OLED Business Unit and transferring our mobile-related business (including
OLED panels for mobile and other products) to the newly created IT/Mobile Business Division and transferring our
OLED television panel business to the Television Business Division. In December 2014, we established a separate
OLED Business Division to strengthen our OLED business and solidify our competitive advantages. In December
2016, partly in an effort to expand our OLED business across our display panel applications (including mobile
products and other applications), we restructured our internal organization by product type, and integrated the
capabilities of our OLED business into the Television Business Division, the IT Business Division and the Mobile
Business Division. In December 2021, as part of our efforts to increase the synergies between our products, we
integrated our Television Business Division into a new Large Display Business Unit and combined our IT Business
Division and the Mobile Business Division into a new Medium-Small Display Business Unit. In order to secure and
maintain competitiveness of our overall business and facilitate our sustainable growth, we are continuing to engage in
various activities to accelerate the transition of the focus of our overall business to OLED and restructure our TFT-
LCD business. In 2022, we reduced our production capacity of TFT-LCD panels for televisions at our manufacturing
facilities in China. In addition, we ceased production at, and closed, our P5 fabrication facility (where we had
produced TFT-LCD panels for notebook computers and mobile and other products) in June 2022, our P7 fabrication
facility (where we had produced TFT-LCD panels for televisions) in December 2022, and our P62 fabrication facility
(where we had produced TFT-LCD panels for notebook computers and desktop monitors) in June 2023, in light of our
continued efforts to increase the proportion of OLED panels in our product mix and the production capacity for such
panels and further reduce our production level of TFT-LCD panels, which we believe to be relatively more sensitive to
market conditions and generally allow for fewer opportunities for product differentiation. Moreover, we have been
implementing a phased exit strategy for our TFT-LCD television panel manufacturing facility in China in light of
TFT-LCD television panels’ higher degree of sensitivity to market volatility and the current oversupply in the TFT-
LCD television display panel market. More recently, in September 2024, as part of our efforts to accelerate the
ongoing shift in our strategic direction to focus on OLED panels, we entered into an agreement with TCL CSOT to
dispose of our entire equity interest in LG Display (China) Co., Ltd. and LG Display Guangzhou Co., Ltd., which
engage in TFT-LCD panel manufacturing and TFT-LCD module manufacturing for televisions, respectively, for
approximately W2.2 trillion. Following the completion of the sale, these entities were excluded from the scope of our
consolidated subsidiaries effective April 1, 2025.
Our principal executive offices are located at LG Twin Towers, 128 Yeoui-daero, Yeongdeungpo-gu, Seoul
07336 and our telephone number is +82-2-3777-0748. Our website address is http://www.lgdisplay.com.
We have continued to develop our manufacturing process technologies and expand our production facilities.
Each successive generation of our fabrication facilities has been designed to process increasingly larger-size glass
substrates, which allows us to cut a larger number of panels, sometimes with larger sizes, from each glass substrate.
The ability to process larger glass substrates allows us to produce a larger variety of display sizes to accommodate
evolving business and consumer demands. In addition, due to the large number of fabrication facilities we operate, we
have the flexibility to make strategic decisions based on market demand to convert existing production lines housed
within a fabrication facility to manufacture display panels based on newer technologies.
As part of our ongoing expansion plans, we have constructed several manufacturing facilities for OLED
panels in Korea in recent years, including our AP4 fabrication facility for plastic OLED panels for mobile and other
products, which commenced mass production in July 2019. Furthermore, in response to and in anticipation of growing
demand in the China market, we established a joint venture with the government of Guangzhou to construct our new
CO fabrication facility to manufacture next generation large-sized OLED panels, which was established under the
30
name of LG Display High-Tech (China) Co., Ltd., in July 2018. We currently hold a 70% ownership interest in the
joint venture and the government of Guangzhou holds the remaining 30% ownership interest, and we commenced
mass production of large-sized OLED panels at the CO fabrication facility in July 2020. In February 2024, we
completed the construction of our new AP5 fabrication facility and have subsequently commenced mass production of
medium-sized OLED panels at such facility. Each of our on-going expansion projects are generally subject to market
conditions and any changes in our investment timetable. See “Item 4.D. Property, Plants and Equipment—Capital
Expenditures.”
With respect to our assembly facilities, from 1995 to early 2003, we assembled all panels in our Gumi
assembly facility adjacent to our P1 facility. Since 2003, in order to better serve the needs of our global customers, we
have commenced operations at various assembly facilities in Korea and several other countries. For more information
on our module assembly facilities, see “Item 4.D. Property, Plants and Equipment—Current Facilities.”
For a description of cash outflows relating to our capital expenditures in the past three fiscal years, see “Item
5.A. Operating Results—Overview—Manufacturing Productivity and Costs.”
The U.S. Securities and Exchange Commission, or the SEC, maintains a website (http://www.sec.gov), which
contains reports, proxy and information statements and other information regarding issuers that file electronically with
the SEC.
Item 4.B. Business Overview
Overview
We manufacture TFT-LCD and OLED technology-based display panels in a broad range of sizes and
specifications primarily for use in IT products (comprising notebook computers, desktop monitors and tablet
computers), televisions, mobile devices, including smartphones, as well as auto products, and we are one of the
world’s leading suppliers of large-sized OLED television panels. We also manufacture display panels for industrial
and other applications, including entertainment systems and medical diagnostic equipment. In 2024, we sold a total of
115.2 million display panels that are nine inches or larger. According to OMDIA, we had a global market share for
display panels of nine inches or larger of approximately 16% and for those smaller than nine inches of approximately
16%, each based on sales revenue in 2024.
We currently operate fabrication facilities, which include separately designated sets of fabrication production
lines housed in certain facilities, located in our Display Clusters in Gumi and Paju, Korea and in Guangzhou, China.
We also operate module assembly facilities in Korea and abroad. For a full description of our current facilities, see
“Item 4.D. Property, Plants and Equipment—Current Facilities.”
We seek to build our market position based on collaborative relationships with our customers and suppliers, a
focus on high-end differentiated specialty display products and manufacturing productivity. Our end-brand customers
include many of the world’s leading manufacturers of IT products and televisions, including LG Electronics, as well as
mobile devices and automobiles. For a description of our sales to LG Electronics, our largest shareholder, see “Item
7.B. Related Party Transactions.”
At the direction of our end-brand customers, we typically ship our display panels to their original equipment
manufacturers, known as “system integrators,” who use our display panels in products they assemble on a contract
basis for our end-brand customers. We engage in direct sales (including through our overseas subsidiaries), as well as
indirect sales through trading companies, including our formerly affiliated trading company, LX International
(formerly known as “LG International Corp.”) and its subsidiaries, to end-brand customers and their system
integrators. Pursuant to the separation of certain companies, including LX International, from the LG Group to form a
separate business group named the LX Group, which separation was approved by the Korea Fair Trade Commission in
June 2022, LX International is no longer our affiliated company.
Our sales were W26,152 billion in 2022, W21,331 billion in 2023 and W26,615 billion (US$18,009 million)
in 2024.
31
Technology Description
TFT-LCD Technology
A TFT-LCD panel consists of two thin glass substrates and polarizer films between which a layer of liquid
crystals is deposited and behind which a light source called a backlight unit is mounted. The frontplane glass substrate
is fitted with a color filter, while the backplane glass substrate, also called a TFT array, has many thin film transistors,
or TFT, formed on its surface. The liquid crystals are normally aligned to allow the polarized light from the backlight
unit to pass through the two glass panels. When voltage is applied to the transistors on the TFT array, the liquid
crystals change their alignment and alter the amount of light that passes through them. Meanwhile, the color filter on
the frontplane glass substrate gives each pixel its own color. The combination of these pixels in different colors and
levels of brightness forms the image on the panel.
The process for manufacturing a TFT-LCD panel consists of four steps:
•
TFT array process – involves fabricating a large number of thin film transistors on the backplane glass
substrate. The number of transistors corresponds to the number of pixels on the screen. The process is
similar to the process for manufacturing semiconductor chips, except that transistors are fabricated on
large glass substrates instead of silicon wafers. Unlike in the semiconductor industry, however, the
number of transistors per glass substrate is not a primary driver of the manufacturing costs for TFT-LCD
panels;
•
Color filter process – involves fabricating a large number of color regions on the frontplane glass
substrate that will overlay the TFT array prior to the cell process. The colored dots of red, green and blue
combine to form various colors. The process is similar to the TFT array process but involves depositing
colored pigments instead of transistors;
•
Cell process – involves joining together the backplane glass substrate that is arrayed with transistors and
the frontplane glass substrate that is patterned with a color filter. The space between the two glass
substrates is filled with liquid crystal materials. The resulting adjoined substrate is called a cell; and
•
Module assembly process – involves connecting additional components, such as driver integrated circuits
and backlight units, to the cell.
The TFT array, color filter and cell processes are capital-intensive and require highly automated production
equipment and are the primary determinants of fixed manufacturing cost. In contrast, the module assembly process
involves semi-automated production equipment and manual labor to assemble the various components. Materials are
the primary drivers of variable manufacturing cost.
IPS Technology
In-Plane Switching, or IPS, is a liquid crystal switching technology that was developed to address commonly
faced problems with TFT-LCD panels that utilized other liquid crystal technologies, namely narrow viewing angles,
inconsistent picture uniformity and slow response times. Unlike other liquid crystal technologies where the liquid
crystals are aligned vertically or at an angle in relation to the glass substrate, with IPS technology, the liquid crystals
are aligned horizontally in parallel to the glass substrate, which allows for wider viewing angles, greater picture
uniformity and faster response times. Our TFT-LCD display panels, including our TFT-LCD television panels, utilize
IPS technology.
Advanced High Performance IPS, or AH-IPS, is an IPS technology that integrates ultra-fine pitch technology
and high transmittance technology, which allows for ultra-high resolution imagery, increased luminance and greater
energy efficiency. AH-IPS is currently utilized in our panels for certain types of IT products, smartphones and other
mobile display products.
OLED Technology
An OLED panel consists of a thin film of organic material encased between anode and cathode electrodes.
When a current is applied, light is emitted directly from the organic material. Because a separate backlight is not
needed, OLED panels can be lighter and thinner compared to TFT-LCD panels, which require a separate backlight. In
addition, images projected on OLED panels have higher contrast ratios and more realistic color reproduction compared
to images projected on TFT-LCD panels.
32
We utilize different types of sub-pixel and backplane technologies in our OLED panels. Under the RGB sub-
pixel structure, a combination of red, green and blue sub-pixels without color filters or white sub-pixels are used to
produce a range of colors. While we, along with most of our competitors, utilize RGB sub-pixel technology for small-
and medium-sized products, there are various technical challenges in scaling RGB sub-pixel technology for large-sized
products, such as television panels. For our OLED television panels, we have overcome these challenges by opting to
utilize our WRGB sub-pixel structure, whereby red, green and blue color filters are placed over white OLED sub-
pixels to produce a range of colors and began production of OLED television panels at our OP1 fabrication facility in
2013. Mass production of our plastic OLED panels for mobile and other products began at our AP3 and AP4
fabrication facilities in August 2017 and July 2019, respectively. In July 2020, we commenced mass production of
large-sized OLED panels at our CO fabrication facility, located in Guangzhou, China. In February 2024, we completed
the construction of our new AP5 fabrication facility and have subsequently commenced mass production of medium-
sized OLED panels at such facility. As for backplane technology, our large-sized OLED products are produced using
oxide TFT backplane technology as compared to our smaller-sized OLED products which utilize low-temperature
polycrystalline silicon (“LTPS”), or low-temperature polycrystalline oxide (“LTPO”), backplane technology, as
described in greater detail below.
Backplane Technology
Oxide TFT
We use oxide TFT technology to produce backplanes for use in our large-sized OLED panels, such as the
panels used in OLED television products. The traditional amorphous silicon-based TFT, or a-Si TFT, backplane
technology has certain limitations that render it unsuitable for producing backplanes for use in large-sized OLED
panels with high resolutions and fast refresh rates. For example, in larger and higher-resolution display panels, a-Si
TFT backplanes consume increased rates of power and experience a decrease in the rate at which each transistor is able
to switch between images, or the rate of mobility.
As an alternative to a-Si TFT backplane technology, we have successfully adopted a metal oxide-based TFT,
or simply oxide TFT, backplane technology. In place of the amorphous silicon-based semiconductors used in a-Si TFT
backplanes, oxide TFT backplanes utilize metal oxide-based semiconductors, which consume less energy, have a
higher rate of mobility and allow for construction of display panels with narrower bezels as compared to display panels
with traditional a-Si TFT backplanes.
We were the first company in the display industry to successfully adopt oxide TFT technology in large-sized
OLED products, which has been a key factor in reducing the costs of manufacturing large-sized OLED panels in large
quantities. Because the manufacturing process of oxide TFT-based OLED panels is similar to the process used to
manufacture TFT-LCD panels, we are able to use our existing TFT-based production lines with relatively little
modification to mass produce large-sized OLED panels.
LTPS and LTPO
LTPS backplanes are suitable for use in the production of high-resolution display panels due to their higher
mobility rates compared to a-Si TFT or oxide TFT backplanes. However, due to a complex manufacturing process,
LTPS backplanes have relatively higher production costs compared to a-Si TFT or oxide TFT backplanes, making it
uneconomical to use in the production of large-sized panels. As a result, we generally utilize LTPS backplanes in the
production of small- and medium-sized TFT-LCD panels and OLED smartphone and other applications.
We also use LTPO backplane technology in our wearable devices and smartphones, which combines elements
of both LTPS and oxide TFT technologies to produce backplanes with greater energy savings than LTPS backplanes.
Products
We manufacture display panels of various specifications that are integrated by our customers into principally
the following products:
•
IT products, which comprise notebook computers (utilizing display panels ranging from 11.6 inches to 18
inches in size), desktop monitors (utilizing display panels ranging from 15.6 inches to 49 inches in size)
and tablet computers (utilizing display panels ranging from 7.85 inches to 13 inches in size);
•
Televisions, which utilize display panels in various sizes ranging from 11.5 inches to 98 inches in size;
33
•
Mobile and other products, which utilize a wide array of display panel sizes, including smartphones and
other types of mobile phones and industrial and other applications, such as entertainment systems and
medical diagnostic equipment; and
•
Auto products, which utilize a variety of display panel sizes ranging from 7 inches to 38.9 inches in size.
Unless otherwise specified, when we refer to panels in this annual report, we mean assembled cells with
added components, such as driver integrated circuits and backlight units.
We design and manufacture our panels to meet the various size and performance specifications of our
customers, including specifications relating to thinness, weight, resolution, color quality, power consumption, response
times and viewing angles. The specifications vary from product to product. For television panels, a premium is placed
on faster response times, wider viewing angles, higher resolution and greater color fidelity. Notebook computer panels
require an emphasis on thinness, light weight and power efficiency, while desktop monitor panels demand a greater
focus on brightness, color brilliance, faster response times and wide viewing angles. For mobile panels, particularly
smartphones, an emphasis is placed on brightness and power efficiency. For automotive display panels, the focus is on
high luminance, longer lifespan, temperature reliability and lower power consumption.
In addition to manufacturing and selling display panels, we also manufacture and sell desktop monitors
through our joint venture companies. See “—Joint Ventures.”
IT Products
Our panels for IT products comprise display panels for notebook computers (ranging from 11.6 inches to 18
inches in size), desktop monitors (ranging from 15.6 inches to 49 inches in size) and tablet computers (display panels
ranging from 7.85 inches to 13 inches in size). Revenue from sales of our IT product panels was W11,198 billion, or
42.5% of our total revenue (prior to deduction of forward exchange hedging loss, which had previously been treated as
accumulated other comprehensive loss but was reclassified to a deduction from revenue in 2022, when the sales from
the hedged forecast transactions were recognized), in 2022, W7,853 billion, or 36.8% of our total revenue in 2023 and
W9,420 billion (US$6,374 million), or 35.4% of our total revenue, in 2024. In 2024, our principal products in terms of
sales revenue in this category included panels of various sizes ranging from 13.5 inches to 16 inches for notebook
computers, 23.5 inches to 27 inches for desktop monitors and 10.86 inches to 13 inches for tablet computers.
The overall demand for IT products generally declined in 2022 and 2023, primarily due to a general decrease
in consumer consumption levels due in part to rising inflation and interest rates and economic volatility and
uncertainty globally. However, in 2024, the IT market experienced a rebound, mainly driven by increased demand for
low-cost IT products and growth in emerging markets, and our revenue from this segment was further boosted by the
commencement of mass production of medium-sized OLED panels at our new AP5 facility. Additionally, there has
been an increase in demand in recent years for products with higher specifications such as desktop monitors with
enhanced color brilliance and faster response times and notebook computers with higher resolution displays.
Televisions
Our television display panels range from 11.5 inches to 98 inches in size. We began mass production of
television display panels in 2001. Our sales of display panels for televisions were W6,975 billion, or 26.4% of our total
revenue (prior to deduction of forward exchange hedging loss, which had previously been treated as accumulated other
comprehensive loss but was reclassified to a deduction from revenue in 2022, when the sales from the hedged forecast
transactions were recognized), in 2022, W4,331 billion, or 20.3% of our total revenue, in 2023 and W5,973 billion
(US$4,042 million), or 22.4% of our total revenue, in 2024. In 2024, our principal products in this category in terms of
sales revenue consisted of display panels of sizes between 55 inches and 77 inches. Our sales of television display
panels, which had historically been our largest product category by revenue in prior years, had generally declined in
recent years, as we had reduced, and recently ceased, most of our production of TFT-LCD television display panels
(which had historically comprised a substantial majority of our television display panels) in light of the weakening
demand for our television products in part due to rising inflation and interest rates and increasing economic volatility
and uncertainty globally, which contributed to downward pricing pressure. In 2022, we reduced our production
capacity of TFT-LCD panels for televisions at our manufacturing facilities in China and ceased production at, and
closed, our P7 facility (where we had produced TFT-LCD panels for televisions) in December 2022, in light of our
continued efforts to increase the proportion of OLED television panels in our product mix and the production capacity
for such panels and further reduce our production level of TFT-LCD panels, which we believe to be relatively more
34
sensitive to market conditions and generally allow for fewer opportunities for product differentiation. Moreover, we
have been implementing a phased exit strategy for our TFT-LCD television panel manufacturing facility in China in
light of TFT-LCD television panels’ higher degree of sensitivity to market volatility and the current oversupply in the
TFT-LCD television display panel market. More recently, in September 2024, as part of our efforts to accelerate the
ongoing shift in our strategic direction to focus on OLED panels, we entered into an agreement with TCL CSOT to
dispose of our entire equity interest in LG Display (China) Co., Ltd. and LG Display Guangzhou Co., Ltd., which
engage in TFT-LCD panel manufacturing and TFT-LCD module manufacturing for televisions, respectively.
Following the completion of the sale, these entities were excluded from the scope of our consolidated subsidiaries
effective April 1, 2025. We have fully exited the TFT-LCD television panel business and are currently focusing on
ultra-large OLED television panels and premium business-to-consumer products. Consumer demand for both TFT-
LCD and OLED televisions decreased in 2022 and 2023 due in part to the tapering of the temporary surge in demand
for such products caused by the COVID-19 pandemic. Additionally, products purchased during the peak of the
pandemic had not yet reached their replacement cycles, and there was a prolonged general decrease in consumer
consumption levels due to rising inflation and interest rates and economic volatility and uncertainty globally. In 2024,
while the overall television market conditions continued to remain weak amid continued economic volatility and
uncertainty in many parts of the world and intensifying competition between OLED and mini-LED technologies, our
revenue from television display panels increased due to our strategic focus on diversifying our product mix and
increasing the proportion of gaming OLED and ultra-large display panels.
Brand manufacturers of televisions and their distribution channels prefer long-term arrangements with a
limited number of display panel suppliers that can offer a full product line, and we believe that we will continue to be
well positioned to meet their requirements with our strengths in technology, manufacturing scale and efficiency as well
as the breadth of our product portfolio.
Mobile and Other Products
Our product portfolio also includes panels for mobile and other products, which utilize a wide array of display
panel sizes, including smartphones and other types of mobile phones and industrial and other applications, including
entertainment systems and medical diagnostic equipment. Display panels that are nine inches and smaller are referred
to as small- and medium-sized panels.
The market for smartphones recorded negative growth in 2023 compared to 2022, and in 2024 compared to
2023, mainly due to a decline in demand for smartphones as a result of geopolitical conflicts, rising inflation and
interest rates and economic volatility and uncertainty globally, as well as the high penetration rate of smartphones,
according to Counterpoint Technology Market Research. Revenue from sales of our display panels for mobile and
other products were W6,326 billion, or 24.0% of our total revenue (prior to deduction of forward exchange hedging
loss, which had previously been treated as accumulated other comprehensive loss but was reclassified to a deduction
from revenue in 2022, when the sales from the hedged forecast transactions were recognized), in 2022, W7,071 billion,
or 33.1% of our total revenue, in 2023 and W8,782 billion (US$5,942 million), or 33.0% of our total revenue, in 2024.
In 2024, sales of panels for smartphones constituted a majority in terms of both sales revenue and sales volume in the
mobile and other products category. In recent years, we have increased the proportion of OLED panels (including
plastic OLED panels) for mobile and other products that command relatively higher prices in our product mix.
Some of the panels we produce for industrial products, such as medical diagnostic equipment, are highly
specialized niche products manufactured and designed to the specifications of our clients, while others, such as
industrial controllers, may be manufactured by slightly modifying a standard product design for our other products,
such as desktop monitors. Display panels for these other products broaden our sales base and product mix. They are
also often a good channel through which we can commercialize a particular technology that we have developed. We
generally determine the production level and specification of our display panels for mobile and other products by
assessing various business opportunities as they arise.
Auto products
We produce a variety of display products based on OLED and TFT-LCD technologies in various sizes and
shapes for auto products. We are further developing innovative new technologies for auto products, including
switchable privacy OLED displays, ultra-large pillar-to-pillar displays and infrared camera under-display panels, as
well as free-form design panels in curved and slidable shapes. Our panels for auto products range from 7 inches to 38.9
inches in size. Our sales of display panels for auto products were W1,820 billion, or 6.9% of our total revenue (prior to
35
deduction of forward exchange hedging loss, which had previously been treated as accumulated other comprehensive
loss but was reclassified to a deduction from revenue in 2022, when the sales from the hedged forecast transactions
were recognized), in 2022, W1,999 billion, or 9.4% of our total revenue, in 2023 and W2,281 billion (US$1,543
million), or 8.6% of our total revenue, in 2024. In 2024, our principal products in this category in terms of sales
revenue consisted of display panels of sizes between 8 inches and 15.4 inches. Our panels for auto products are
designed and manufactured to the specifications of our customers, which mainly consist of leading global automobile
manufacturers. From 2022 to 2024, the demand for automotive panels experienced gradual growth, driven by the
recovery of the automobile market and increasing adoption of display panels, partly due to a recovery in demand for
automobiles following the COVID-19 pandemic. Our revenue also grew during this period, supported by the
increasing share of premium displays based on OLED and LTPS technologies as well as the trend toward larger
display sizes. In recent years, we have been focusing on developing and manufacturing large-sized OLED automotive
display panels in light of the growth of the electric vehicle market and the development of autonomous driving
technology.
Sales and Marketing
Customer Profile
Our display panels are included primarily in IT products, televisions, mobile devices, automobiles and other
products sold by our global end-brand customers, including LG Electronics. LG Electronics is our largest shareholder,
and the terms of our sales to LG Electronics are negotiated based on then-prevailing market prices as adjusted for LG
Electronics’ requirements, including volume and specifications. See “Item 7.B. Related Party Transactions” for further
description of our sales to LG Electronics.
We negotiate directly with our end-brand customers concerning the terms and conditions of the sales, but
typically ship our display panels to designated system integrators at the direction of these end-brand customers. Sales
data to end-brand customers include direct sales to these end-brand customers as well as sales to their designated
system integrators, including through our formerly affiliated trading company, LX International, and its subsidiaries,
as further discussed below under “—Sales.”
A substantial portion of our sales is attributable to a limited number of our end-brand customers. Our top ten
end-brand customers together accounted for a significant majority of our sales in each of 2022, 2023 and 2024. Of our
top ten end-brand customers, two of them each accounted for more than 10% of our sales on an individual basis for
each of the past three years. For example, sales to LG Electronics, including as a system integrator, amounted to
approximately 18%, 16% and 14% of our sales in 2022, 2023 and 2024, respectively.
In addition to our top ten end-brand customers, we sell a portion of our display panels to a variety of other
manufacturers of computers and electronic products.
The following table sets forth for the years indicated the geographic breakdown of our sales based on the
location of our customers. The figures below reflect orders from our end-brand customers and their system integrators
and our formerly affiliated trading company, LX International, and its subsidiaries:
Year ended December 31,
2022(4)
2023
2024
Sales
%
Sales
%
Sales
Sales (3)
%
(in billions of Won and millions of US$, except for percentages)
Korea
₩
678
2.6%
₩
634
3.0%
₩
1,007
US$681
3.8%
China
17,434
66.1
14,704
68.9%
18,150
12,281
68.2%
Asia (excluding China) (1)
2,797
10.6
2,398
11.3%
3,228
2,184
12.1%
Americas (2)
3,079
11.7
2,080
9.7%
2,283
1,545
8.6%
Europe (excluding Poland)
989
3.7
614
2.9%
789
534
3.0%
Poland
1,388
5.3
901
4.2%
1,158
784
4.3%
Total (3)
₩
26,365
100.0%
₩
21,331
100.0%
₩
26,615
US$18,009
100.0%
(1)
Includes Oceania, Africa and the Middle East.
(2)
Includes North and South America.
(3)
For convenience, the Korean Won amounts are expressed in U.S. dollars at the rate of W1,477.86 to US$1.00, the noon buying rate in effect on
December 31, 2024 as certified by the Federal Reserve Bank of New York for customs purposes. This translation should not be construed as a
representation that the Korean Won amounts represent, have been or could be converted to U.S. dollars at that rate or any other rate.
(4)
Prior to deduction of forward exchange hedging loss of W213 billion, which had previously been treated as accumulated other comprehensive loss but
was reclassified to a deduction from revenue in 2022, when the sales from the hedged forecast transactions were recognized.
36
Sales
Our sales and marketing departments seek to maintain and strengthen relationships with our current
customers in existing markets as well as expand our business in new markets and with new customers. We currently
have wholly-owned sales subsidiaries in the United States, Japan, Germany, Taiwan, China and Singapore.
The focus of our sales activities is on strengthening our relationships with large end-brand customers, with
whom we maintain strong collaborative relationships. Customers look to us for a reliable supply of a wide range of
display products. We believe our reliability and scale as a supplier helps support our customers’ product positions. We
view our relationships with our end-brand customers as important to their product development strategies, and we
collaborate with our end-brand customers in the design and development stages of their new products. In addition, our
sales teams coordinate closely with our end-brand customers’ designated system integrators to ensure timely delivery.
For each key customer, we appoint an account manager who is primarily responsible for our relationship with that
specific customer, complemented by a product development team consisting of engineers who participate in meetings
with that customer to understand the customer’s specific needs.
In 2024, and historically, the majority of our sales were generated from transactions pursuant to purchase
orders on an ongoing basis from our global customers. Typically, our end-brand customers or their designated system
integrators place purchase orders with us a few weeks prior to delivery. Generally, the head office of an end-brand
customer provides us with advance rolling forecasts, which, together with our own forecasts, enable us to plan our
production schedule in advance. However, the volume and pricing of our display panel products are generally
influenced by various factors including market conditions, such as competition with other vendors, the complexity of
product specifications and the labor and technology involved in the design and production processes.
As part of our ongoing efforts to enhance our overall business structure, including efforts to improve our
profitability and reduce production volatility, we have been actively seeking, and plan to continue, to increase the
proportion of products manufactured under advance supply agreements that leverage our stable production capabilities
and technological leadership in advanced display products, including those utilizing OLED technology. Through these
supply agreements, we aim to mitigate our exposure to fluctuations in the volume and market pricing of display
products across our business areas, as long as there is no significant decline in demand caused by macroeconomic
uncertainties. While these supply agreements provide an indication of the size and key components of a customer’s
order, neither party is obligated to supply or purchase any products until a firm purchase order is issued.
We primarily engage in direct sales (including through our overseas subsidiaries), and to a lesser extent,
indirect sales through trading companies and its subsidiaries, to end-brand customers and their system integrators. Our
sales subsidiaries procure purchase orders from, and distribute our products to, system integrators and end-brand
customers located in their region. In regions where we do not have a sales subsidiary, or where doing so is consistent
with local market practices, we sell our products to trading companies and its subsidiaries. These subsidiaries of
trading companies process orders from and distribute products to customers located in their region.
We generally provide a limited warranty to our end-brand customers, including the provision of replacement
parts and warranty services for our products. Costs incurred under our warranty liabilities consist primarily of repairs.
We set aside a warranty reserve based on our historical experience and future expectations as to the rate and cost of
claims under our warranties.
Where system integrators located in certain regions are invoiced directly, we have established certain
measures, such as factoring arrangements and accounts receivable insurance programs, to protect us from excessive
exposure to credit risks.
37
Competition
The display panel industry is highly competitive. Due to the capital intensive nature of the display panel
industry and the high production volumes required to achieve economies of scale, the international market for display
devices is characterized by significant barriers to entry, but the competition among the relatively small number of
major producers is intense. In the case of TFT-LCD panel manufacturers, currently almost all of them are located in
Asia, and we compete principally with manufacturers from Korea, Taiwan, China and Japan. We have experienced
pressure on the prices and margins of our major products due largely to additional capacity from panel makers in Asia,
particularly in China. The market share of Chinese manufacturers in the global TFT-LCD display market has
significantly increased in recent years primarily due to their large investments in production facilities and production
of large volumes of lower-priced panels with the support of the Chinese government as part of its efforts to encourage
Chinese consumers to purchase domestically manufactured products. Chinese display panel manufacturers have also
been increasingly making capital investments in OLED technology, especially with respect to small- and mid-sized
OLED display panels. For example, BOE, China’s largest display panel manufacturer, has been making ongoing
efforts to expand its OLED production capabilities, including significant investments in a new OLED production line
in Chengdu, China. Moreover, Samsung Display, one of our primary competitors based in Korea, has been making
significant capital investments in a new OLED manufacturing facility in Asan, Korea. Increased production capacity
resulting from such investments as well as additional investments by our competitors in China and elsewhere may
result in further intensified competition.
The principal elements of competition for customers in the display panel market include:
•
product portfolio range and availability;
•
product specifications and performance;
•
price;
•
capacity allocation and reliability;
•
customer service, including product design support; and
•
logistics support and proximity of regional stocking facilities.
Our principal competitors are:
•
Samsung Display in Korea;
•
Innolux and AU Optronics in Taiwan;
•
Japan Display and Sharp in Japan; and
•
BOE, TCL CSOT and HKC in China.
According to OMDIA, in 2024, Korean display panel manufacturers had a market share of 21% of the 9-inch
or larger display panel market based on revenue, Chinese manufacturers had 58%, Taiwanese manufacturers had 16%
and Japanese manufacturers had 5%. Our market share of the 9-inch or larger panel market based on revenue was
approximately 16%. Also according to the same source, in 2024, Korean display panel manufacturers had a market
share of 47% of the smaller than 9-inch display panel market based on revenue, Chinese manufacturers had 42%,
Taiwanese manufacturers had 6% and Japanese manufacturers had 5%. Our market share of the smaller than 9-inch
display panel market based on revenue was approximately 16%.
Components, Raw Materials and Suppliers
Components and raw materials accounted for approximately 59%, 55% and 57% of our cost of sales in 2022,
2023 and 2024, respectively. The key components and raw materials of our display products include glass substrates,
driver integrated circuits and polarizers used in both our TFT-LCD and OLED products, backlight units and liquid
crystal materials used in our TFT-LCD products, and hole transport materials and emission materials used in our
OLED products. We source these components and raw materials from outside sources, although, unlike many other
display panel manufacturers, we produce a substantial portion of the color filters we use. With respect to glass
substrates, Paju Electric Glass Co., Ltd., a joint venture company in which we own a 40% equity interest, provides us
with a stable supply at competitive prices.
38
We generally negotiate non-binding master supply agreements with our suppliers several times a year, but
pricing terms are negotiated on a quarterly basis, or if necessary, on a monthly basis. Firm purchase orders are issued
generally six weeks prior to the scheduled delivery, except in the case of purchase orders for driver integrated circuits,
which are issued generally several months prior to the scheduled delivery. We purchase our components and raw
materials based on forecasts from our end-brand customers as well as our own assessments of our end-brand
customers’ needs.
In order to reduce our component and raw material costs and our dependence on any one supplier, we
generally develop compatible components and raw materials and purchase our components and raw materials from
more than one source. However, we source certain key components and raw materials from a limited group of
suppliers in order to ensure timely supply and consistent quality. Also, in order to facilitate implementation of our cost
reduction strategies, we continually review for potential cost savings in sourcing our components and raw materials
from suppliers based in Korea and those based abroad, including competitiveness of the prices offered by such
suppliers and any potential for reduction in logistics and transportation costs. We perform periodic evaluations of our
component and raw material suppliers based on a number of factors, including the quality and price of the components,
delivery and response time, the quality of the services and the financial health of the suppliers. We reassess our
supplier pool accordingly.
We maintain a strategic relationship with many of our material suppliers, and from time to time, we make
equity investments in our material suppliers as part of our efforts to secure a stable supply of key components and raw
materials.
In addition to components and raw materials, the manufacturing of our products requires significant quantities
of electricity and water. In order to obtain and maintain reliable electric power and water supplies, we have our own
back-up power generation facilities and water storage tanks as well as easy access to nearby water sources.
Equipment, Suppliers and Third Party Processors
We depend on a limited number of equipment manufacturers for equipment tailored to specific requirements.
Since our manufacturing processes depend on the quality and technological capacity of our equipment, we work
closely with the equipment manufacturers in the design process to ensure that the equipment meets our specifications.
The principal types of equipment we use to manufacture display panels include deposition equipment, steppers,
developers and coaters.
We purchase equipment from a small number of qualified vendors to ensure consistent quality, timely
delivery and performance. We maintain strategic relationships with many equipment manufacturers as part of our
efforts to ensure quality while reducing costs.
Historically, we have relied on a small number of overseas vendors for equipment purchases, but in recent
years, we have diversified and localized our equipment purchases by shifting some of our purchases to Korean
vendors. As a result of such efforts, most of our equipment for our facilities in Korea in 2024 was purchased from
Korean vendors on an invoiced basis.
Our engineers begin discussions with equipment manufacturers far in advance of the planned installation of
equipment in a new fabrication facility, and we typically execute a letter of intent with the vendors in advance of our
planned installation to ensure timely delivery of main equipment with long-term delivery schedules. Engineers from
our vendors typically accompany the new equipment to our fabrication facilities to assist in the installation process to
ensure proper operation. In addition, we outsource certain manufacturing processes to third party processors from time
to time to supplement our processing capacity, and in certain cases, we maintain strategic relationships with such third
party processors.
Quality Control
We believe that our advanced production capabilities and our reputation for high quality and reliable products
have been important factors in attracting and retaining key customers. We have implemented quality inspection and
testing procedures at all of our fabrication facilities and assembly facilities. Our quality control procedures are carried
out at three stages of the manufacturing process:
•
incoming quality control with respect to components and raw materials;
•
in-process quality control, which is conducted at a series of control points in the manufacturing process;
and
39
•
outgoing quality control, which focuses on packaging, delivery and post-delivery services to customers.
With respect to incoming quality control, we perform quality control procedures for the raw materials and
components that we purchase. These procedures include testing samples of large batches, obtaining vendor testing
reports and testing to ensure compatibility with other components and raw materials, as well as vendor qualification
and vendor rating. Our in-process quality control includes various programs designed to detect, as well as prevent,
quality deviations, reduce manufacturing costs, ensure on-time delivery, increase in-process yields and improve field
reliability of our products. We perform outgoing quality control based on burn-in testing and final visual inspection of
our products and accelerated life testing of samples. We inspect and test our completed display panels to ensure that
they meet our high production standards. We also provide post-delivery services to our customers, and maintain
warranty exchange inventories in regional hubs to meet our customers’ needs.
Our quality assurance team works to ensure effective and consistent application of our quality control
procedures, which include six-sigma quality control procedures, and to introduce new methodologies that could further
enhance our quality control procedures. Our quality assurance programs have received accredited ISO/IATF 16949
certifications. The ISO/IATF certification process involves subjecting our manufacturing processes and quality
management systems to reviews and observation for various fixed periods. ISO/IATF certification is required by
certain European countries and the United States in connection with sales of industrial products in those countries, and
provides independent verification to our customers regarding the quality control measures employed in our
manufacturing and assembly processes.
Insurance
We currently have property insurance coverage, including business interruption coverage, for our production
facilities in Gumi and Paju, Korea, for up to W2.3 trillion in the aggregate, and for our panel fabrication facilities
located in Guangzhou, China for up to CNY 12.2 billion in the aggregate. We also have insurance coverage for work-
related injuries to our employees, accidents during overseas business travel, damage during construction, damage to
products and equipment during shipment, damage to equipment during installation at our fabrication facilities,
automobile accidents, bodily injury and property damage from gas accidents, as well as mandatory unemployment
insurance for our workers and director and officer liability insurance. In addition, we maintain general and product
liability, employment practice liability, aviation product liability and world-wide cargo insurance. Our dormitories in
Gumi and Paju, Korea, have fire insurance coverage for up to approximately W0.5 trillion in the aggregate. Our
subsidiaries also have insurance coverage for damage to office fixtures and equipment and life and disability insurance
for their employees. All of our overseas manufacturing subsidiaries also carry property insurance, business interruption
insurance and commercial general liability insurance.
Environmental Matters
Our production processes generate various forms of chemical and other industrial waste, waste water and
greenhouse gas emissions at various stages in the manufacturing process. We have installed various types of anti-
pollution equipment for the treatment and recycling of such waste products and aggressively engage in greenhouse gas
emission reduction and energy conservation efforts.
As a member of the World Display device Industry Cooperation Committee, or WDICC, a display industry
organization focusing on environmental issues, we have voluntarily agreed to reduce emission of greenhouse gases,
such as nitrogen trifluoride, or NF3, sulfur hexafluoride, or SF6, and carbon tetrafluoride, or CF4, gases, by
developing and adopting cost-effective abatement technologies and systems and increasing the number of abatement
systems installed in our facilities. We installed NF3 abatement systems at all of our production lines when the
production facilities were being constructed. In addition, we have installed SF6 and CF4 abatement systems, and
developed and applied processes that utilize substitute gases with lower global warming potential than SF6, in each of
our facilities in Gumi and Paju, Korea. In addition, starting in 2021, we have begun to use electricity generated from
eco-friendly sources such as solar power, wind power and hydropower instead of fossil fuels to satisfy our electricity
needs in part and plan to further expand our reliance on renewable energy in the future.
In order to respond to applicable domestic and overseas environmental regulations, such as the European
Union’s Restriction of Hazardous Substances (RoHS) and Registration, Evaluation, Authorisation and Restriction of
Chemicals (REACH) that restrict the use of certain hazardous substances, we operate a hazardous substance
management program that implements a four-step procedure that manages various stages of our production cycle,
40
beginning with the registration process of our business partners up to the mass production stage. In addition, in order
to preemptively address four types of phthalate substances that became additionally regulated pursuant to the RoHS in
2016 and officially went into effect in July 2019, we replaced the latent risk elements in advance as well as
implemented a more stable management process with respect to such substances. In implementing this process, we
collaborated with external agencies to ascertain regulatory trends and establish our response strategy, and we
formulated and applied effective management measures through the collaborative efforts of our development,
procurement, quality assurance and analysis teams. For the more efficient operation of our waste water treatment
equipment, we have also entered into an agreement with Techcross Environmental Services Inc. for the operation of
our water treatment system.
We also operate a “Hazardous Substance Management System for Products” that effectively manages
hazardous substances by classifying them into four levels: A-I, A-II, B-I, and B-II. In particular, in addition to
substances prohibited by global hazardous substance regulations on products, we have designated substances causing
harm to the human body and the environment as Level B substances, which categories represent substances subject to
voluntary reduction or under observation for future action. By developing alternative technologies and parts and
applying them to our products, we continually strive to achieve a gradual reduction and elimination of non-prohibited
hazardous substances.
Operations at our manufacturing plants are subject to regulation and periodic scheduled and unscheduled on-
site inspections by the Korean Ministry of Environment and local environmental protection authorities. We believe
that we have adopted adequate anti-pollution measures for the effective maintenance of environmental protection
standards consistent with local industry practice, and that we are in compliance in all material respects with the
applicable environmental laws and regulations in Korea, including the Framework Act on Low Carbon, Green Growth,
the Korean government, under which we are required to submit periodic greenhouse gas emission and energy usage
statements, performance reports and greenhouse gas emission and energy usage reduction plans to the Korean
government. Expenditures related to such compliance may be substantial and are generally included in capital
expenditures. As required by Korean law, we employ licensed environmental specialists for each environmental area,
including air quality, water quality, toxic materials and radiation.
As part of our efforts to establish and operate environmental-friendly energy management systems at our
domestic and overseas fabrication facilities and production plants, we have received the International Organization for
Standardization (“ISO”) 14001 (environmental management system) and ISO 50001 (energy management system)
certifications for all of our domestic and overseas production sites. All of our domestic production facilities earned
Gold ZWTL validation, our overseas subsidiary in Nanjing earned Platinum ZWTL validation in 2022, and our Paju
plant earned Platinum validation in June 2024. Also, in 2022, we introduced a resource recirculation recognition
program in accordance with the Korean government’s waste management policy and received circular resource
certification on eight types of our discarded trays and vinyl. In 2023, we obtained quality certification for certain of our
recycled items recognized as circular resources, and we plan to continue our efforts to reinforce our resource
circulation program by minimizing waste and maximizing recycling rates.
In addition, we are continually pursuing ESG management activities based on the spirit of “value creation for
consumers” and “human-first management,” and we plan to obtain further recognitions for our eco-friendly
management and share relevant information with our stakeholders.
In 2021, we received the “Green Technology Certification” from the Korean Ministry of Science and ICT for
our advanced incell touch display technology, an eco-friendly technology, which reduces carbon emissions and the use
of rare metals. Also, since 2021, we have continued to obtain an eco-friendly certification from TUV SUD, a globally
recognized accreditation agency based in Germany, for excellence in resource circulation and non-use of specific
hazardous substances in our OLED television display panels and plastic OLED mobile display products. In 2022, we
became the first company in the industry to receive the SGS Eco Label accreditation from SGS, a global product
testing and certification agency, for our automotive display products utilizing plastic OLED and low-temperature
polycrystalline silicon LCD. This recognition was awarded for reducing the power consumption of such products by
enhancing the luminous efficiency of their organic elements, improving their liquid crystal transmittance rates, and
minimizing hazardous substances. In 2024, this accreditation was updated to the “SGS EEPS accreditation.” We also
obtained the SGS performance accreditation for our IT display products applying antibacterial films. In 2023, we
received the SGS Eco Label accreditation for our high-end LCD display panels for certain IT products (27 inches or
smaller in size) applying recycled materials for the first time and was the first in the industry to receive such
accreditation for our 30-inch and 55-inch transparent display products applying hazardous substance reduction
41
technology. We also received the SGS Performance Mark accreditation for our commercial display products applying
energy consumption reduction technology and for our high-end IT display products (27 inches or smaller in size) for
reducing energy consumption through the implementation of proprietary algorithms and improving panel
transmittance. In addition, we received the Product Carbon Footprint (PCF) certification from TÜV Rheinland, a
global independent testing, inspection and certification agency, for our high-end IT display products (27-inch or
smaller in size) for achieving a reduction in carbon emissions through the application of recycled materials and low
energy consumption technologies. Our OLED panels for auto products also received the same certification for
achieving a reduction in carbon emissions through the application of light-control film integration technology. In 2024,
our 14-inch high-end LCD display panel for notebook computers received the Product Carbon Footprint Reduction
(PCR) certification from TÜV Rheinland through the application of bio-plastics, recycled materials and ultra-precision
micro-processing technology. Additionally, after verification by Underwriters Laboratories (UL), a global inspection
and certification agency, such display panel also received the Environmental Claim Validation (ECV) certification.
Joint Ventures
We consider joint ventures an important part of our business, both operationally and strategically. We have
used joint ventures to enter into new geographic markets, in particular China, to gain new customers and/or strengthen
positions with existing customers and to procure certain components and raw materials. When entering new
geographic markets where we do not have substantial local experience and infrastructure, teaming up with a local
partner can reduce capital investment by leveraging the pre-existing infrastructure of local partners. In addition, local
partners in these markets can provide knowledge and insight into local customs and practices and access to local
suppliers of raw materials and components. All of these advantages can reduce the risk, and thereby enhance the
prospects for the success, of an entry into a new geographic market. If the partner of the joint venture already has an
established customer base, it can also be an effective means to acquire such new customers. Joint venture arrangements
also allow us to access technology we would otherwise have to develop independently, thereby reducing the time and
cost of development. They can also provide the opportunity to create synergies and applications of technology that
would not otherwise be possible.
From time to time, we have pursued a number of joint venture initiatives. For example, in September 2012,
we entered into a joint venture agreement with Guangzhou GET Technologies Development Co., Ltd., or GET Tech,
and Shenzhen SKYWORTH-RGB Electronic Co., Ltd., or Skyworth, to establish LG Display (China) Co., Ltd., which
owned and operated our CA fabrication facility in Guangzhou, China. We initially acquired a 70.0% equity interest in
LG Display (China) and invested a total of approximately US$927 million over a period of two years from the date of
incorporation of LG Display (China). Each of GET Tech and Skyworth initially owned a 20.0% and 10.0% equity
interest in LG Display (China), respectively. However, as part of our strategic shift to focus on OLED panels, we
recently disposed of our equity interest in LG Display (China). In connection with such transaction, we first acquired
Skyworth’s 10% equity interest in the company and subsequently entered into a sale agreement with TCL CSOT in
September 2024 to dispose of our entire 80% equity interest in LG Display (China). Following the completion of the
sale, LG Display (China) was excluded from the scope of our consolidated subsidiaries effective April 1, 2025. See
“—Products—Televisions.” In addition, in July 2018, we established and acquired a 69% ownership interest in a joint
venture with the government of Guangzhou, LG Display High-Tech (China) Co., Ltd., to construct our new CO
fabrication facility to manufacture next generation large-sized OLED panels in Guangzhou, China. We currently own a
70% equity interest in LG Display High-Tech (China), and we commenced mass production of large-sized OLED
panels at the CO fabrication facility in July 2020.
We intend to continue to seek strategic acquisition and joint venture opportunities and conduct feasibility
studies with respect to establishing new manufacturing subsidiaries in strategic locations to deepen our market
penetration, achieve economies of scale, increase our customer base, expand our geographical reach and reduce costs.
42
Subsidiaries
The following table sets forth summary information for our subsidiaries as of December 31, 2024:
Subsidiary
Main Activities
Jurisdiction of
Organization
Date of
Organization
Percentage of
Our
Ownership
Interest
Percentage of
Our Voting
Power
LG Display Taiwan Co., Ltd.
Sales
Taiwan
April 1999
100%
100%
LG Display America, Inc.
Sales
U.S.A.
September 1999
100%
100%
LG Display Japan Co., Ltd.
Sales
Japan
October 1999
100%
100%
LG Display Germany GmbH
Sales
Germany
October 1999
100%
100%
LG Display Nanjing Co., Ltd.
Manufacturing
China
July 2002
100%
100%
LG Display Shanghai Co., Ltd.
Sales
China
January 2003
100%
100%
LG Display Guangzhou Co.,
Ltd.(1)
Manufacturing
China
June 2006
100%
100%
LG Display Shenzhen Co., Ltd.
Sales
China
July 2007
100%
100%
LG Display Singapore Pte. Ltd.
Sales
Singapore
November 2008
100%
100%
LG Display Yantai Co., Ltd.
Manufacturing
China
March 2010
100%
100%
L&T Display Technology
(Fujian) Ltd.
Manufacturing and
sales
China
December 2009
51%
51%
Nanumnuri Co., Ltd.
Workplace services
Korea
March 2012
100%
100%
LG Display (China) Co., Ltd.(1)
Manufacturing
and sales
China
December 2012
80%
80%
Unified Innovative Technology,
LLC
Managing intellectual
property
U.S.A.
March 2014
100%
100%
Global OLED Technology LLC
Managing intellectual
property
U.S.A.
December 2009
100%
100%
LG Display Guangzhou Trading
Co., Ltd.
Sales
China
April 2015
100%
100%
LG Display Vietnam Haiphong
Co., Ltd.
Manufacturing and
sales
Vietnam
May 2016
100%
100%
Suzhou Lehui Display Co., Ltd.
Manufacturing
and sales
China
July 2016
100%
100%
LG Display Fund I LLC
Investing in new
emerging companies
U.S.A.
May 2018
100%
100%
LG Display High-Tech (China)
Co., Ltd
Manufacturing and
sales
China
July 2018
70%
70%
N.B. See Note 1(b) of the notes to our financial statements for changes to our subsidiaries during the year ended December 31, 2024.
(1)
In September 2024, we entered into an agreement with TCL CSOT to dispose of our entire equity interest in LG Display (China) Co., Ltd. and LG
Display Guangzhou Co., Ltd., which engage in TFT-LCD panel manufacturing and TFT-LCD module manufacturing for televisions, respectively.
Following the completion of the sale, these entities were excluded from the scope of our consolidated subsidiaries effective April 1, 2025.
Item 4.C. Organizational Structure
These matters are discussed under Item 4.B. where relevant.
43
Item 4.D. Property, Plants and Equipment
Current Facilities
The following table sets forth the size, location and primary use of our current fabrication facilities.
Fabrication Facility
Generation(1)
Mass
Production
Commencement
Location
Gross Floor
Area
(in square
meters)
Primary Types of
Panels Produced
Korea
P62 (2)
6
April 2009
Gumi, Korea
—
TFT-LCD for IT products
AP3
6
February 2014
Gumi, Korea
288,634
Plastic OLED for mobile and other
products
P8 (3)
8
March 2009
Paju, Korea
506,895
TFT-LCD for television and IT products
OP1 (4)
8
January 2013
Paju, Korea See P8 above
OLED for television
P9 (5)
8
June 2012
Paju, Korea
534,535
TFT-LCD for IT products
AP4 (6)
6
July 2019
Paju, Korea See P9 above
Plastic OLED for mobile and other
products
AP5
6
February 2024(7)
Paju, Korea
915,723
(8)
Glass OLED and plastic OLED for IT
products and other applications
Overseas
CO
8
July 2020
Guangzhou,
China
426,139
OLED for television
(1)
Based on internal reference to evolutions in facility design, material flows and input substrate sizes. There are several definitions of “generations” in the
display industry. There has been no consensus in the display industry on a uniform definition. References to generations made in this annual report are
based on our current definition of generations as indicated in the table below.
Substrate Sizes (in millimeters)
Gen 5
Gen 6
Gen 7
Gen 8
1,000 x 1,200
1,100 x 1,250
1,100 x 1,300
1,200 x 1,300
1,500 x 1,800
1,500 x 1,850
1,870 x 2,200
1,950 x 2,250
2,200 x 2,500
(2)
We ceased production at, and closed, the P62 fabrication facility in June 2023.
(3)
Gross floor area of P8 fabrication facility includes the gross floor area of OP1 fabrication facility, which is located in the same complex.
(4)
The gross floor area of this fabrication facility is included within the P8 fabrication facility.
(5)
Gross floor area of P9 fabrication facility includes the gross floor area of AP4 fabrication facility, which is located in the same complex.
(6)
The gross floor area of this fabrication facility is included within the P9 fabrication facility.
(7)
Based on the construction completion date.
(8)
Represents the gross floor area for the overall P10 fabrication facility (in which AP5 facility is located), which is currently not yet completed.
For input substrate size, initial design capacity and year-end input capacity as a result of ramp-up for each of
our fabrication facilities, please see “Item 5.A. Operating Results—Overview—Manufacturing Productivity and
Costs.”
44
We also operate module assembly facilities in China (Nanjing, Guangzhou and Yantai), Korea (Gumi and
Paju) and Vietnam (Haiphong). In addition, we operate a research and development facility in Paju, Korea, which we
refer to as the R&D Center. We opened the R&D Center in April 2012 to consolidate our research and development
efforts for next-generation display technologies. The following table sets forth the size of our R&D Center and module
assembly facilities.
Facility
Gross Floor Area
(in square meters)
Mass Production
Commencement
R&D Center
69,871
Not applicable (opened in April 2012)
Gumi assembly facility
301,779
January 1995
Nanjing assembly facility
159,448
May 2003
Paju assembly facility
225,093
January 2006
Guangzhou assembly facility
89,517
(1)
December 2007
Yantai assembly facility
45,170
May 2010
Haiphong assembly facility
358,787
July 2017
(1)
The gross floor area for this facility excludes the floor area attributable to the module assembly facility relating to TFT-LCD television panels, which we
disposed of as part of the sale of the related businesses to TCL CSOT.
Capital Expenditures
In July 2017, we announced plans to make investments in an aggregate amount of up to W7.8 trillion mainly
in new large-sized and plastic OLED production lines in Paju, Korea. In July 2019, we announced plans to make
additional investments of W3.0 trillion in the previously announced new large-sized OLED production lines. Certain
of such investments have already been completed with respect to plastic OLED panels and we commenced mass
production of such panels in July 2019. However, our scheduled investments in large-sized OLED panels pursuant to
the July 2017 and July 2019 announcements have been extended until the first quarter of 2028 due in part to increased
uncertainties in the global economic environment. We are in the process of developing and assessing the specifics of
such planned investments, including the timing. In August 2021, we announced plans to make investments in an
aggregate amount of up to W3.3 trillion in a new fabrication complex in Paju, Korea, P10, which will be used for the
production of small- and medium-sized OLED panels. We completed the construction of our new AP5 fabrication
facility located within such complex in February 2024 and have subsequently commenced mass production of
medium-sized OLED panels at such facility.
We currently expect that, in 2025, our total capital expenditures on a cash out basis will be at a similar level
to those in 2024 and will be used primarily to continue to fund our previously announced investments related to our
continued and ongoing transition to an OLED-centric business structure, as well as other essential recurring
investments. Such expected capital expenditures are subject to periodic assessment, and we cannot provide any
assurance that such expected capital expenditures may not change materially after assessment. We may undertake
further expansion projects in the future with respect to our existing facilities as our overall business strategy may
require.
Item 4A. UNRESOLVED STAFF COMMENTS
We do not have any unresolved comments from the SEC staff regarding our periodic reports under the
Exchange Act.
Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
Item 5.A. Operating Results
Overview
Our results of operations are affected principally by overall market conditions, our manufacturing
productivity and costs, and our product mix.
45
Market Conditions
The display industry in which we operate is affected by market conditions that are often outside the control of
individual manufacturers. Our results of operations might fluctuate significantly from period to period due to market
factors, such as seasonal variations in consumer demand, global economic conditions, external factors that impact the
supply chain, surges in production capacity by competitors and changes in technology. Over the past decade, the
display industry has been undergoing a transition from TFT-LCD panels to alternative display panels based on newer
technologies, primarily OLED panels. While TFT-LCD panels are still predominant in the display industry, OLED
technology is widely seen in the display industry as the successor technology to TFT-LCD technology and has gained
wider market acceptance for use in display panels. With respect to the TFT-LCD industry, sales volume decreased
from 2,706 million units in 2012 to 2,426 million units in 2024, and market revenue decreased from US$92 billion to
US$79 billion during the same period according to OMDIA. With respect to the OLED industry, sales volume
significantly increased from 188 million units in 2012 to 1,008 million units in 2024, and market revenue also
significantly increased from US$7 billion to US$54 billion during the same period, also according to OMDIA.
Currently, small-sized panels for use in mobile devices such as smartphones make up the bulk of the OLED
panel market, accounting for approximately 84% of industry revenue from global sales of OLED panels in 2024.
While the OLED market was smaller compared to the TFT-LCD market as of the end of 2024, we believe that the
market is changing rapidly as a growing array of OLED panels for various applications and sizes have been, and
continue to be, introduced to the market and advances in the related technology and manufacturing processes enable
mass production in a cost-efficient manner. We first commenced mass production of OLED panels for televisions in
2013 and plastic OLED panels for mobile and other products in 2017. In July 2019, we commenced mass production
of plastic OLED panels for mobile and other products at our AP4 fabrication facility, and in July 2020, we commenced
mass production of large-sized OLED panels at our CO fabrication facility, located in Guangzhou, China. In August
2021, we announced plans to make investments in an aggregate amount of up to W3.3 trillion in a new fabrication
complex in Paju, Korea, P10, which will be used for the production of small- and medium-sized OLED panels. We
completed the construction of our new AP5 fabrication facility located within such complex in February 2024, and
have subsequently commenced mass production of medium-sized OLED panels at such facility. At the same time, we
have been strategically reducing the production level of our TFT-LCD panels, including through the disposal of our
equity interest in our Chinese subsidiaries engaged in the manufacturing of TFT-LCD panels and modules for
televisions. Following the completion of the sale, these entities were excluded from the scope of our consolidated
subsidiaries effective April 1, 2025. See “Risk Factors — Risks Relating to Our Industry — A global economic
downturn may result in reduced demand for our products and adversely affect our profitability.”
While the display industry has shown periods of rapid growth in the past, it has also experienced business
cycles with significant and rapid price declines from time to time. Historically, display panel manufacturers have
increased display area fabrication capacity rapidly at times. Capacity expansion occurs especially rapidly when several
manufacturers ramp-up new factories at the same time. Recently, Chinese display panel manufacturers have been
increasingly making capital investments in OLED technology, especially with respect to small- and mid-sized OLED
display panels. For example, BOE, China’s largest display panel manufacturer, has been making ongoing efforts to
expand its OLED production capabilities, including significant investments in a new OLED production line in
Chengdu, China. Moreover, Samsung Display, one of our primary competitors based in Korea, has been making
significant capital investments in a new OLED manufacturing facility in Asan, Korea. During periods of surges in the
rate of supply growth, our customers are able to exert downward pricing pressure, leading to sharp declines in average
selling prices and significant fluctuations in our gross margin. In addition, regardless of relative capacity expansion,
we expect average selling prices of our existing products to decline as the cost of manufacturing declines due to
technology advances and component cost reductions. Conversely, constraints in the industry supply chain or increased
demand for new technology products have led to increased prices for display panels in some past periods.
According to OMDIA, the display industry for panels that are nine inches or larger expanded in 2024
compared to 2023, with total market revenue increasing from US$61 billion in 2023 to US$70 billion in 2024. The
average selling price of those panels increased during the same period by approximately 6% from approximately
US$75 in 2023 to US$80 in 2024. Moreover, according to OMDIA, the display industry for panels that are smaller
than nine inches also expanded in 2024 compared to 2023, with total market revenue increasing from US$57 billion in
2023 to US$64 billion in 2024. The average selling price of those panels increased during the same period by
approximately 10% from approximately US$21 in 2023 to US$23 in 2024. We believe that these increases in the
average selling prices of display panels were partly attributable to an increase in the proportion of panels utilizing
OLED technology in the display panel industry’s overall production output.
46
We strive to mitigate the effect of industry cyclicality and the resulting price fluctuations by planning
capacity expansions and capacity allocations, or shifting our product mix, to capture premium prices in specific
emerging, high-end product categories. As part of our strategy, we have been proceeding with the construction of new
fabrication facilities and additional investments to upgrade and convert existing facilities and production lines to
produce differentiated specialty display panels based on OLED technology that command higher premiums. See “Item
4.D. Property, Plants and Equipment—Capital Expenditures.”
In addition, we are vigorously pursuing our strategy to develop differentiated specialty products and
technologies that better address our customers’ needs, thereby delivering greater value to our customers. In many
cases, these efforts go hand-in-hand with our efforts to develop products based on new technologies that allow us to
realize greater premiums. For example, we have allocated significant resources to the development and production of
specialized OLED panels for televisions and commercial displays (such as our next-generation “META” display
panels (which apply advanced technologies to offer brighter and more stable images), transparent OLED display
panels as well as OLED display panels for gaming monitors), display panels utilizing Ultra HD technology, low power
consumption and AH-IPS technology for various IT products and televisions and plastic OLED technology for
smartphones, automotive products and wearable devices. In particular, we have deployed, and are continuing to
deploy, significant resources into plastic OLED panels for mobile and other products and auto products, as well as
medium-sized OLED panels for IT products, to further expand our market presence and maintain our early competitive
edge in such market.
Another key aspect of our strategy is to foster close cooperation with our customers and build on our strategic
relationships with many of our key suppliers. Success of a new product depends on, among other things, working
closely with our customers to gain insights into their product needs and to understand general trends in the market. At
the same time, we often work with our equipment suppliers to design equipment that can enhance the efficiency of our
production processes for such new products.
Uncertainties in the global economy have increased in recent years, with global financial and capital markets
experiencing substantial volatility. In particular, the COVID-19 pandemic that began in late 2019 and rapid increases
in interest rates globally starting in the second half of 2021 to combat inflation have materially and adversely affected
the global economy and financial markets. Such uncertainties have been, and continue to be, exacerbated by, among
other things, deterioration in economic and trade relations between major economies (particularly between the United
States and China), Russia’s invasion of Ukraine and ensuing sanctions against Russia, the slowdown of economic
growth in China and other major emerging market economies, adverse economic and political conditions in Europe
and Latin America and continuing geopolitical and social instability in North Korea and various parts of the Middle
East, including the escalation of hostilities in the Middle East following the Israel-Hamas war and, more recently. See
“Item 3.D. Risk Factors—Risks Relating to Our Industry—A global economic downturn may result in reduced
demand for our products and adversely affect our profitability” and “Item 3.D. Risk Factors—Risks Relating to Our
Company—Earthquakes, tsunamis, floods, severe health epidemics (including the global COVID-19 pandemic and
any possible recurrence of other types of widespread infectious diseases) and other natural calamities could materially
adversely affect our business, results of operations or financial condition.” We cannot provide any assurance that
demand for our products can increase or be sustained at current levels in future periods, or that the demand for our
products will not decrease in the future due to such economic downturns, which may adversely affect our profitability.
47
Manufacturing Productivity and Costs
We seek to continually enhance our manufacturing productivity and thereby reduce the cost of producing
each panel. We have significantly expanded our production capacity by investing in fabrication facilities that can
process increasingly larger-size glass substrates. The following table shows the input substrate size, initial design
capacity and year-end input capacity as a result of ramp-up for each of our fabrication facilities as of the dates
indicated:
Primary Input
Substrates Size
Year-end Input Capacity (1)
Facility
(in millimeters)
2022
2023
2024
(in thousands of input substrates per month)
AP3
1,500 x 1,850
29
29
37
AP4
1,500 x 1,850
28
45
47
AP5
1,500 x 1,850
N/A
(5)
N/A
(5)
17
OP1
2,200 x 2,500
70
39
58
P5(2)
1,100 x 1,250
N/A
(5)
N/A
(5)
N/A
(5)
P62(3)
1,500 x 1,850
40
N/A
(5)
N/A
(5)
P7(4)
1,950 x 2,250
155
(6)
N/A
(5)
N/A
(5)
P8
2,200 x 2,500
126
102
103
P9
2,200 x 2,500
71
70
70
CA(7)
2,200 x 2,500
199
114
190
CO
2,200 x 2,500
90
65
75
(1)
Year-end input capacity is the total input substrates for the month that had the highest monthly input substrates during the fiscal year.
(2)
We ceased production at, and closed, the P5 fabrication facility in June 2022.
(3)
We ceased production at, and closed, the P62 fabrication facility in June 2023.
(4)
We ceased production at, and closed, the P7 fabrication facility in December 2022.
(5)
N/A means not applicable.
(6)
Includes input capacity prior to the closure of the P7 fabrication facility in December 2022.
(7)
In September 2024, we entered into an agreement with TCL CSOT to dispose of our entire equity interest in LG Display (China) Co., Ltd., the
company that owned and operated our CA fabrication facility. Following the completion of the sale, these entities were excluded from the
scope of our consolidated subsidiaries effective April 1, 2025.
Our cash outflows for capital expenditures amounted to W5,079 billion in 2022, W3,483 billion in 2023
and W2,130 billion (US$1,441 million) in 2024. Such capital expenditures related mainly to our continued
investments in production facilities for medium-sized and plastic OLED panels in 2024 and 2023. Capital
expenditures were also incurred for the acquisition of new equipment during the same period. Our depreciation
expense as a percentage of revenue increased from 15.2% in 2022 to 17.0% in 2023 but decreased to 16.2% in
2024. Such decrease in 2024 compared to 2023 was a result of a relatively larger increase in our revenue compared
to the increase in our depreciation expense. We currently expect that, in 2025, our total capital expenditures on a
cash out basis will be at a similar level to those in 2024 and will be used primarily to continue to fund our
previously announced investments related to our continued and ongoing transition to an OLED-centric business
structure, as well as other essential recurring investments. Such expected capital expenditures are subject to
periodic assessment, and we cannot provide any assurance that such expected capital expenditures may not change
materially after assessment.
Since our inception, we have designed our fabrication facilities in-house and co-developed most equipment
sets with our suppliers. These efforts have enabled us to gain valuable experience in designing and operating next-
generation fabrication facilities capable of processing increasingly larger-size glass substrates. We have been able to
leverage this experience to achieve and maintain high production output and yields at our fabrication facilities, thereby
lowering costs. In addition, in recent years, we have substituted a portion of our equipment purchased from overseas
vendors with purchases from local vendors to diversify our supply source and reduce costs.
We also continue to make various process improvements at our fabrication facilities, including enhancing the
performance of process equipment, efficiency of material flows and quality of process and product designs. For
example, we have reduced the number of mask steps in the TFT process from four to three with respect to certain
models, thereby enabling us to process a higher number of substrates in a given period of time. Such process
improvements result in increased unit output of our fabrication facilities without significant capital investment, thus
enabling us to reduce fixed costs on a per panel basis. In addition, in commencing mass production of large-sized
48
OLED products, we have made modifications to certain of our existing TFT-LCD production lines to convert them
into OLED panel production lines. Because our large-sized OLED panels employ oxide TFT backplane technology,
which can be produced using manufacturing processes similar to the processes used to manufacture TFT-LCD panels,
relatively little modification has been necessary, thereby reducing the costs of additional investments needed for the
conversion of our production lines. The size of our OLED manufacturing operations has also expanded considerably in
recent years, enabling us to benefit from economies of scale.
Raw materials comprise the largest component of our costs. We monitor the prices at which we can procure
raw materials from suppliers and to the extent overseas suppliers are able to provide raw materials at competitive
prices, we have diversified our supplier base by procuring raw materials from such overseas suppliers. We have also
been able to leverage our scale and leading industry position to obtain competitive prices from our suppliers.
Our cost reduction efforts in recent years also include our decision to substantially reduce the production of
TFT-LCD panels in Korea and China in light of the continued overcapacity in the global TFT-LCD market and further
capital investments by other suppliers, particularly from China. In 2022, we reduced our production capacity of TFT-
LCD panels for televisions at our manufacturing facilities in China. In addition, we ceased production at, and closed,
our P5 fabrication facility (where we had produced TFT-LCD panels for notebook computers and mobile and other
products) in June 2022, our P7 fabrication facility (where we had produced TFT-LCD panels for televisions) in
December 2022, and our P62 fabrication facility (where we had produced TFT-LCD panels for notebook computers
and desktop monitors) in June 2023, in light of our continued efforts to increase the proportion of OLED panels in our
product mix and the production capacity for such panels and further reduce our production level of TFT-LCD panels,
which we believe to be relatively more sensitive to market conditions and generally allow for fewer opportunities for
product differentiation. More recently, in September 2024, as part of our efforts to accelerate the ongoing shift in our
strategic direction to focus on OLED panels, we entered into an agreement with TCL CSOT to dispose of our entire
equity interest in LG Display (China) Co., Ltd. and LG Display Guangzhou Co., Ltd., which engage in TFT-LCD
panel manufacturing and TFT-LCD module manufacturing for televisions, respectively, for approximately W2.2
trillion. Following the completion of the sale, these entities were excluded from the scope of our consolidated
subsidiaries effective April 1, 2025. Assets and liabilities relating to such subsidiaries are accounted for as assets and
liabilities held for sale in our consolidated statements of financial position as of December 31, 2024. See Note 29 of
the notes to our financial statements for further discussion. In addition, we launched a voluntary retirement program in
late 2023 for our manufacturing personnel in Korea and in late 2024 for our non-manufacturing personnel to optimize
the size of our workforce, partly in connection with the reduced production of TFT-LCD panels as mentioned above.
The above factors play significant roles in our efforts to reduce our cost of sales per square meter of net
display area, which is derived by dividing total costs of sales by total square meters of net display area shipped. Our
cost of sales per square meter of net display area decreased by 10.5% in 2024 compared to 2023, mainly due to the
increased production efficiency of our manufacturing processes and our implementation of various cost reduction
measures, which were partially offset by the continued overall depreciation of the Korean won against the U.S. dollar,
in which a significant portion of our purchases of raw materials and components are denominated, during 2024.
However, our cost of sales per square meter of net display area increased by 36.8% in 2023 compared to 2022 mainly
due to an increase in our product mix of the proportion of OLED panels, which require more expensive raw materials
and are generally more costly to manufacture than TFT-LCD panels, as we continued our ongoing transition to an
OLED-centered business structure, as well as the continued overall depreciation of the Korean Won against the U.S.
dollar, in which a significant portion of our purchases of raw materials and components are denominated, during 2023.
Product Mix
Our product mix reflects our strategic capacity allocation among various product markets, and is continually
reviewed and adjusted based on the demand for, and our assessment of the profitability of, display panels in different
markets and size categories. In recent years, we believe market demand has been shaped by a shift toward
differentiated specialty products based on newer technologies, including OLED technology, especially in the display
panel markets for Ultra HD televisions as well as various types of IT products and mobile and other products. In
response to such market trends, we have increased our production capacity and sales of OLED panels, which
accounted for 55% of our revenue in 2024, and have also developed and commercialized differentiated specialty
products for a variety of applications. For example, with respect to our television display panel product portfolio, the
proportion of sales of our television panels equipped with OLED technology increased between 2022 and 2024, and
we have introduced various new products utilizing our differentiated technologies and features, such as Ultra HD and
our next-generation “META” technologies, in recent years. In addition, with respect to our IT products, we have
49
expanded our product portfolio to offer desktop panels with Full HD resolution in a variety of screen aspect ratios and
additional features such as borderless bezels and curved displays, and display panels for gaming OLED monitors with
high resolutions, rapid response times and fast refresh rates. In recent years, we have also introduced and expanded our
product offerings of panels for IT products utilizing OLED technology as well as AH-IPS technology with
increasingly higher resolution and other features, and panels for smartphones, automotive products and wearable
devices utilizing plastic OLED technology.
As part of our continued efforts to increase the proportion of OLED panels in our product mix, we have been
reducing the production level of less profitable types of TFT-LCD panels in recent years, including by disposing of our
entire equity interest in our Chinese subsidiaries engaged in the manufacturing of TFT-LCD panels and modules for
televisions. Following the completion of the sale, these entities were excluded from the scope of our consolidated
subsidiaries effective April 1, 2025. Additionally, we have been closing some of our fabrication facilities in Korea,
where we had previously produced TFT-LCD panels, as described above.
The following table sets forth our revenue by product category for the years indicated and revenue in each
product category as a percentage of our total revenue:
Year ended December 31,
2022 (1)
2023
2024
Sales
%
Sales
%
Sales
Sales (2)
%
Panels for:
(in billions of Won and millions of US$, except for percentages)
Televisions
₩
6,975
26.4%
₩
4,331
20.3%
₩
5,973
US$
4,042
22.4%
IT Products(3)
11,198
42.5
7,853
36.8
9,420
6,374
35.4
Mobile and other
products(4)
6,326
24.0
7,071
33.1
8,782
5,942
33.0
Auto Products(5)
1,820
6.9
1,999
9.4
2,281
1,543
8.6
Sales of goods
₩
26,319
99.8%
₩
21,254
99.6%
₩
26,456
US$
17,901
99.4%
Royalties and others
46
0.2
77
0.4
159
108
0.6
Revenue
₩
26,365
100.0%
₩
21,331
100.0%
₩
26,615
US$
18,009
100.0%
(1)
Prior to deduction of forward exchange hedging loss of W213 billion, which had previously been treated as accumulated other comprehensive loss but
was reclassified to a deduction from revenue in 2022, when the sales from the hedged forecast transactions were recognized.
(2)
For convenience, the Korean Won amounts are expressed in U.S. dollars at the rate of W1,477.86 to US$1.00, the noon buying rate in effect on
December 31, 2024 as certified by the Federal Reserve Bank of New York for customs purposes. This translation should not be construed as a
representation that the Korean Won amounts represent, have been or could be converted to U.S. dollars at that rate or any other rate.
(3)
Comprises notebook computers, desktop monitors and tablet computers.
(4)
Includes, among others, panels for mobile devices, including smartphones and other types of mobile phones, and industrial and other applications,
including entertainment systems and medical diagnostic equipment.
(5)
Includes display panels for auto products.
The following table sets forth our sales volume by product category for the years indicated and as a
percentage of our total panels sold:
Year ended December 31,
2022
2023
2024
Panels for
Number of
Panels
%
Number of
Panels
%
Number of
Panels
%
(in thousands, except for percentages)
Televisions
29,305
13.3%
13,932
7.2%
20,512
9.1%
IT Products(1)
87,376
39.8
78,176
40.2
81,554
36.1
Mobile and other products(2)
87,808
39.9
84,855
43.6
103,803
46.0
Auto Products(3)
15,307
7.0
17,414
9.0
19,745
8.8
Total
219,796
100.0%
194,377
100.0%
225,614
100.0%
(1)
Comprises notebook computers, desktop monitors and tablet computers.
(2)
Includes, among others, panels for mobile devices, including smartphones and other types of mobile phones, and industrial and other applications,
including entertainment systems and medical diagnostic equipment.
(3)
Includes display panels for auto products.
Average Selling Prices
Our product mix has an impact on our average selling prices. In addition to business cycles, industry-wide
supply and demand balances and other market- or industry-wide variables, our product cost and price vary with the
50
product display area, as well as the technology and specification of such product. Therefore, the average selling price
of our products can vary over time as a result of business cycles and the choices we make in capacity allocation for
specific products. The overall average selling price of our display panels can fluctuate significantly. Our average
selling price per panel, which is derived by dividing total sales of goods by the total number of panels sold, decreased
by 9.2% from W120 thousand in 2022 to W109 thousand in 2023, but increased by 7.3% to W117 thousand (US$79)
in 2024.
In 2023 compared to 2022, our average selling price decreased primarily due to an increase in the proportion
of panels for mobile and other products (which are typically smaller in size, and are generally sold at a lower price per
panel, compared to panels for other types of downstream products) in our product mix, as well as a decrease in the
average selling price for IT products, which in turn was mainly attributable to downward pricing pressure for display
panels resulting from a general decrease in consumer consumption levels due to rising inflation and interest rates and
the continued economic volatility and uncertainty globally. The impact of such change was partially offset by a
significant increase in the average selling price for television products and, to a lesser extent, an increase in the average
selling price for mobile and other products, which in turn was mainly attributable to an increase in the proportion of
OLED television panels and plastic OLED panels for mobile and other products, which generally have higher selling
prices, in our product mix.
In 2024 compared to 2023, our average selling price increased mainly due to increases in the average selling
price for certain IT products applying our tandem OLED technology, which allows for higher resolutions with lower
power consumption and longer lifespan, and to a lesser extent, mobile and other products. Such increases were
primarily attributable to our continued strategic focus to increase the proportion of high-end and differentiated
products in our product mix as well as the overall depreciation of the Korean won against the U.S. dollar during 2024,
in which substantially all of our sales are denominated. The impact of such increases was partially offset by a decrease
in the average selling price for television products, which in turn was mainly due to continued weak demand in the
overall television market, amid continued economic volatility and uncertainty globally.
The following table sets forth our average selling price per panel by markets for the years indicated:
Average Selling Price (1)
Year ended December 31,
2022
2023
2024 (2)
(in thousands, except for US$)
Televisions
₩
238
₩
311
₩
291
US$
197
IT Products(3)
128
100
116
78
Mobile and other products (4)
72
83
85
58
Auto Products(5)
119
115
116
78
All panels
120
109
117
79
(1)
Average selling price for each market represents revenue per market divided by unit sales per market.
(2)
For convenience, the Korean Won amounts are expressed in U.S. dollars at the rate of W1,477.86 to US$1.00, the noon buying rate in effect on
December 31, 2024 as certified by the Federal Reserve Bank of New York for customs purposes. This translation should not be construed as a
representation that the Korean Won amounts represent, have been or could be converted to U.S. dollars at that rate or any other rate.
(3)
Comprises notebook computers, desktop monitors and tablet computers.
(4)
Includes, among others, panels for mobile devices, including smartphones and other types of mobile phones, and industrial and other applications,
including entertainment systems and medical diagnostic equipment.
(5)
Includes display panels for auto products.
Our average revenue per square meter of net display area, which is derived by dividing our total revenue by
total square meters of net display area shipped, increased by 33.1% from W829 thousand in 2022 to W1,103 thousand
in 2023. In 2024, our average revenue per square meter of net display area shipped decreased by 2.5% to W1,076
thousand (US$728).
51
Recent Accounting Changes
For a discussion of new standards, interpretations and amendments to existing standards that have been
published, see Note 3(a) of the notes to our financial statements.
Operating Results
The following presents our consolidated results of operation information and as a percentage of our revenue
for the years indicated:
Year ended December 31,
2022
%
2023
%
2024
2024 (1)
%
(in billions of Won and in millions of US$, except for percentages)
Revenue
₩
26,365
(2)
100.0%
₩
21,331
100.0%
₩
26,615
US$
18,009
100.0%
Cost of sales
(25,028)
94.9
(20,986)
98.4
(24,040)
(16,267)
90.3
Gross profit
1,124
4.3
345
1.6
2,575
1,742
9.7
Selling expenses
(896)
3.4
(576)
2.7
(585)
(396)
2.2
Administrative expenses
(931)
3.5
(900)
4.2
(1,104)
(747)
4.1
Research and development expenses
(1,382)
5.2
(1,380)
6.5
(1,448)
(980)
5.4
Other income
3,186
12.1
1,472
6.9
2,100
1,421
7.9
Other expenses
(4,446)
16.9
(1,786)
8.4
(2,798)
(1,893)
10.5
Finance income
873
3.3
1,122
5.3
883
597
3.3
Finance costs
(966)
3.7
(1,635)
7.7
(1,822)
(1,233)
6.8
Equity in income (loss) of equity
accounted investees, net
5
0.0
(3)
0.0
5
3
0.0
Loss before income tax
(3,433)
(13.0)
(3,339)
(15.7)
(2,192)
(1,483)
(8.2)
Income tax benefit (expense)
238
0.9
763
3.6
(218)
(148)
0.8
Loss for the year
(3,195)
(12.1)
(2,577)
(12.1)
(2,409)
(1,630)
(9.1)
(1)
For convenience, the Korean Won amounts are expressed in U.S. dollars at the rate of W1,477.86 to US$1.00, the noon buying rate in effect on
December 31, 2024 as certified by the Federal Reserve Bank of New York for customs purposes. This translation should not be construed as a
representation that the Korean Won amounts represent, have been or could be converted to U.S. dollars at that rate or any other rate.
(2)
Prior to deduction of forward exchange hedging loss of W213 billion, which had previously been treated as accumulated other comprehensive loss but
was reclassified to a deduction from revenue in 2022, when the sales from the hedged forecast transactions were recognized.
Comparison of 2024 to 2023
Revenue
Our revenue increased by 24.8% from W21,331 billion in 2023 to W26,615 billion (US$18,009 million) in
2024. The increase in revenue resulted from increases in revenue derived from sales of panels for mobile and other
devices, televisions, IT products and auto products, which were in turn mainly due to an increase in the number of
panels sold in each of these categories and increases in the average selling price of panels for IT products, mobile and
other products and auto products.
Revenue attributable to sales of panels for mobile and other products increased by 24.2% from W7,071
billion in 2023 to W8,782 billion (US$5,942 million) in 2024, resulting primarily from an increase in the number of
units sold of panels in this category in 2024 compared to 2023, accompanied by an increase in the average selling price
of panels in this category in 2024 compared to 2023. The total unit sales of panels for mobile and other products
increased by 22.3% from 84.9 million in 2023 to 103.8 million in 2024, and the average selling price of panels in this
category increased by 2.4% from W83 thousand in 2023 to W85 thousand (US$58) in 2024. The increase in the sales
volume of panels for mobile and other products was primarily attributable to our timely development of new panels
and our achievement of increased stability in the mass production of our panels in this category, which together
strengthened our collaboration with our end-brand customers. The increase in the average selling price of panels in this
category was mainly due to the depreciation of the Korean Won against the U.S. dollar during 2024, which was
partially offset by increased price competition among suppliers in the market for smartphone display panels.
Revenue attributable to sales of panels for televisions increased by 37.9% from W4,331 billion in 2023 to
W5,973 billion (US$4,042 million) in 2024, resulting from a significant increase in the number of units sold of panels
in this category in 2024 compared to 2023, which was partially offset by a decrease in the average selling price of
panels in this category in 2024 compared to 2023. The total unit sales of panels for televisions increased by 47.5%
from 13.9 million panels in 2023 to 20.5 million panels in 2024, whereas the average selling price of panels in this
category decreased by 6.4% from W311 thousand in 2023 to W291 thousand (US$197) in 2024. The increase in the
sales volume of panels for televisions was mainly attributable to an increase in the sales volume of our large-sized
OLED panels in the premium television market, primarily reflecting our continued strategic focus to increase the
proportion of high-end OLED television panels while decreasing the proportion of TFT-LCD television panels in our
52
product mix. The decrease in the average selling price of television panels was mainly attributable to the continued
weak demand in the overall television market, due in part to the continued economic volatility and uncertainty
globally, which more than offset the positive effects of the depreciation of the Korean Won against the U.S. dollar on
average selling price during 2024.
Revenue attributable to sales of panels for IT products increased by 20.0% from W7,853 billion in 2023 to
W9,420 billion (US$6,374 million) in 2024, resulting primarily from an increase in the average selling price of panels
in this category in 2024 compared to 2023, accompanied by an increase in the number of units sold of panels in this
category in 2024 compared to 2023. The average selling price of panels in this category increased by 16.0% from
W100 thousand in 2023 to W116 thousand (US$78) in 2024, and the total unit sales of panels for IT products
increased by 4.4% from 78.2 million panels in 2023 to 81.6 million panels in 2024. The increase in the average selling
price of our panels for IT products was mainly attributable to the depreciation of the Korean Won against the U.S.
dollar during 2024, as discussed above, and the commencement of mass production of display panels applying tandem
OLED technology, which generally command higher selling prices. The increase in the sales volume of panels for IT
products was mainly attributable to the commencement of mass production of display panels applying tandem OLED
technology.
Revenue attributable to sales of panels for auto products increased by 14.1% from W1,999 billion in 2023 to
W2,281 billion (US$1,543 million) in 2024, resulting primarily from an increase in the number of units sold of panels
in this category in 2024 compared to 2023, accompanied by a slight increase in the average selling price of panels in
this category in 2024 compared to 2023. The total unit sales of panels for auto products increased by 13.2% from 17.4
million panels in 2023 to 19.7 million panels in 2024, and the average selling price of panels in this category increased
slightly by 0.9% from W115 thousand in 2023 to W116 thousand (US$78) in 2024. The increase in the sales volume of
panels for auto products was attributable to our timely development of new panels and our achievement of increased
stability in the mass production of our panels in this category, which together strengthened our collaboration with our
end-brand customers. The slight increase in the average selling price of our panels for auto products was mainly due to
our introduction and maintenance of a diverse product portfolio with differentiated specialty features and newer
technologies, as well as the depreciation of the Korean Won against the U.S. dollar during 2024, as discussed above,
which were largely offset by sluggish market demand for new automobiles due in part to the continued economic
volatility and uncertainty globally.
In addition, our revenue attributable to royalty and others increased by 106.5% from W77 billion in 2023 to
W159 billion (US$108 million) in 2024. The increase was due to a 281.3% increase in royalty from W16 billion in
2023 to W61 billion (US$41 million) in 2024, primarily relating to our newly developed display equipment
technology, and a 65.0% increase in other revenue, consisting primarily of sales of sample products and certain raw
materials and components, from W60 billion in 2023 to W99 billion (US$67 million) in 2024.
Cost of Sales
Cost of sales increased by 14.6% from W20,986 billion in 2023 to W24,040 billion (US$16,267 million) in
2024. The increase in our cost of sales in 2024 compared to 2023 was attributable primarily to an increase in raw
materials and component costs mainly relating to an increase in the number of panels sold in 2024 compared to 2023,
as well as the increase in the proportion of products with differentiated specialty features and newer technologies that
require higher-cost raw materials and components in our product mix. In addition, an increase in overhead costs as
well as an increase in depreciation costs resulting mainly from recognition of depreciation costs in respect of newly
purchased machinery and equipment, contributed to the increase in cost of sales in 2024 compared to 2023.
As a percentage of our total cost of sales, raw materials and component costs, labor costs, overhead costs,
depreciation and amortization costs and change in inventory costs constituted 55.1%, 12.0%, 13.8%, 16.2% and 2.9%,
respectively, in 2023 and 56.7%, 10.8%, 13.7%, 17.2% and 1.7%, respectively, in 2024.
As a percentage of revenue, cost of sales decreased from 98.4% in 2023 to 90.3% in 2024. The decrease in
our cost of sales as a percentage of revenue in 2024 compared to 2023 was attributable mainly to our continued cost
reduction efforts and activities seeking to optimize our cost structure, as well as increasing the proportion of higher
value-added products with higher margins in our product mix.
Cost of sales per square meter of net display area, which is derived by dividing total cost of sales by total
square meters of net display area shipped, decreased by 10.5% from W1,086 thousand in 2023 to W972 thousand
53
(US$658) in 2024. Such decrease was due mainly to the higher capacity utilization rates at our production facilities in
2024 compared to 2023. Cost of sales per panel sold, which is derived by dividing total cost of sales by total number of
panels sold, decreased by 1.3% from W108 thousand in 2023 to W107 thousand (US$72) in 2024. Such decrease was
due mainly to an increase in the proportion of our display panels for mobile and other products, which generally have
lower cost of sales per panel relative to our larger panels in other product categories, sold in our product mix during
the same period.
Gross Profit and Gross Margin
Mainly as a result of our continued cost reduction efforts and activities seeking to optimize our cost structure,
which outpaced the effect of the increase in our revenue, our gross profit increased significantly from W345 billion in
2023 to W2,575 billion (US$1,742 million) in 2024. Our gross margin increased from 1.6% to 9.7% over the same
period primarily as a result of such cost reduction efforts and cost structure optimization activities as well as the higher
capacity utilization rates at our production facilities in 2024 compared to 2023 and an increase in the average selling
price of our panels in 2024 compared to 2023. High capacity utilization rates allow us to allocate fixed costs over a
greater number of panels produced and thereby increase our gross margin.
Selling and Administrative Expenses
Selling and administrative expenses increased by 14.4% from W1,476 billion in 2023 to W1,688 billion
(US$1,142 million) in 2024. As a percentage of revenue, our selling and administrative expenses decreased from 6.9%
in 2023 to 6.3% in 2024. The increase in selling and administrative expenses in 2024 compared to 2023 was
attributable primarily to an increase in salaries, resulting mainly from a one-time retirement allowance incurred in
connection with our voluntary retirement program implemented in 2024 in order to optimize our workforce and, to a
much lesser extent, an increase in shipping costs, resulting mainly from an increase in our overall shipment volume
(especially the volume of large-sized television product shipments) in 2024 compared to 2023.
The following are the major components of our selling and administrative expenses for each of the years in
the two-year period ended December 31, 2024:
Year ended December 31,
2023
2024(1)
(in billions of Won and millions of US$)
Salaries
₩
373
₩
580
US$
392
Expenses related to defined benefit plans
25
23
16
Other employee benefits
87
84
57
Shipping
92
119
81
Fees and commissions
253
246
166
Depreciation
265
266
180
Taxes and dues
66
63
43
Advertising
76
67
45
Warranty
102
114
77
Insurance
14
14
9
Travel
18
13
9
Training
10
9
6
Others
95
90
61
Total
₩
1,476
₩
1,688
US$
1,142
(1)
For convenience, the Korean Won amounts are expressed in U.S. dollars at the rate of W1,477.86 to US$1.00, the noon buying rate in effect on
December 31, 2024 as certified by the Federal Reserve Bank of New York for customs purposes. This translation should not be construed as a
representation that the Korean Won amounts represent, have been or could be converted to U.S. dollars at that rate or any other rate.
Research and Development Expenses
Research and development expenses increased by 4.9% from W1,380 billion in 2023 to W1,448 billion
(US$980 million) in 2024. As a percentage of revenue, our research and development expenses decreased from 6.5%
in 2023 to 5.4% in 2024. The research and development expenses in 2024 were incurred mainly in relation to research
and development activities related to OLED and next generation technologies and products.
54
Other Income (Expense), Net
Other income includes primarily foreign currency gain and gain on disposal of property, plant and equipment,
and other expenses include primarily foreign currency loss, impairment loss on property, plant and equipment, loss on
disposal of property, plant and equipment, and impairment loss on intangible assets. Our total net other expense
increased by 122.2% from W314 billion in 2023 to W698 billion (US$472 million) in 2024. Such increase was
primarily due to an increase in net foreign currency loss from W118 billion in 2023 to W507 billion (US$343 million)
in 2024, reflecting higher exchange rate volatility in 2024 compared to 2023. Such increase was enhanced by an
increase in net impairment loss on property, plant and equipment from W60 billion in 2023 to W94 billion (US$64
million) in 2024, primarily due to an increase in impairment loss associated with our machinery and equipment, as
well as an increase in net impairment loss on intangible assets from W55 billion in 2023 to W72 billion (US$49
million) in 2024, primarily due to an increase in impairment loss associated with our development costs. Such
increases were partially offset by a decrease in net loss on disposal of property, plant and equipment from W67 billion
in 2023 to W25 billion (US$17 million) in 2024, which primarily reflected a lower volume of manufacturing
equipment disposed of in 2024 compared to 2023.
Finance Income (Costs), Net
Our total net finance costs increased by 83.3% from W512 billion in 2023 to W939 billion (US$635 million)
in 2024. Such increase was mainly attributable to a net foreign currency loss of W486 billion (US$329 million) in
2024 compared to a net foreign currency gain of W48 billion in 2023, primarily due to higher exchange rate volatility
in 2024 compared to 2023, and a 25.9% increase in interest expense from W723 billion in 2023 to W910 billion
(US$616 million) in 2024, which was mainly due to a decrease in capitalized interest in 2024 compared to 2023. Such
increases were offset in part by net gain on valuation of derivatives of W139 billion (US$94 million) in 2024
compared to net loss on valuation of derivatives of W76 billion in 2023, which change was primarily attributable to the
general appreciation of the U.S. dollar against the Korean Won in 2024 and higher exchange rate volatility in 2024
compared to 2023. Against such fluctuations, we also recognized net gains on transaction of derivatives of W179
billion in 2023 and W274 billion (US$186 million) in 2024.
Income Tax Benefit (Expense)
We recognized income tax expense of W218 billion (US$148 million) in 2024 compared to income tax
benefit of W763 billion in 2023, primarily due to a significant increase in unrecognized deferred tax assets, which
related to tax loss carryforwards and tax credit carryforwards that are deemed to be not realizable based on our
estimates of future taxable profit. We recognized an increase in unrecognized deferred tax assets of W704 billion
(US$476 million) in 2024 compared to an increase of W157 billion in 2023. The effect of such increase in 2024 was
further enhanced by a 33.3% decrease in our income tax benefit using the statutory tax rate of each country in which
we pay income tax from W790 billion in 2023 to W527 billion (US$357 million) in 2024, as our loss before income
tax decreased from W3,339 billion in 2023 to W2,192 billion (US$1,483 million) in 2024, and a significant decrease in
tax credits from W208 billion in 2023 to W23 billion in 2024 (US$16 million), which mainly reflected a decrease in
our capital expenditure level. Our effective tax rates were not calculated in 2023 and 2024 due to the loss before
income tax we recorded in such years. See Notes 22 and 23 of the notes to our financial statements.
Loss for the Year
As a result of the cumulative effect of the reasons explained above, our loss for the year decreased by 6.5%
from W2,577 billion in 2023 to W2,409 billion (US$1,630 million) in 2024. Our loss for the year as a percentage of
revenue was (12.1)% in 2023 and (9.1)% in 2024.
Comparison of 2023 to 2022
Revenue
Our revenue decreased by 19.1% from W26,365 billion in 2022 to W21,331 billion in 2023. The decrease in
revenue resulted from decreases in revenue derived from sales of panels for IT products and televisions, which were in
turn mainly due to decreases in both the average selling price and the numbers of panels sold for IT products and
panels sold for televisions, offset in part by an increase in revenue derived from sales of panels for mobile and other
products and auto products.
55
Revenue attributable to sales of panels for IT products decreased by 29.9% from W11,198 billion in 2022 to
W7,853 billion in 2023, resulting from a decrease in the average selling price of panels in this category in 2023
compared to 2022, accompanied by a decrease in the number of units sold of panels in this category in 2023 compared
to 2022. The average selling price of panels in this category decreased by 21.9% from W128 thousand in 2022 to
W100 thousand in 2023, and the total unit sales of panels for IT products decreased by 10.5% from 87.4 million panels
in 2022 to 78.2 million panels in 2023. The decrease in the average selling price of our panels for IT products was
mainly attributable to downward pricing pressure resulting from a prolonged general decrease in consumer
consumption levels due in part to rising inflation and interest rates and the continued economic volatility and
uncertainty globally, which more than offset the positive effects of the overall depreciation of the Korean won against
the U.S. dollar on the average selling price of such products during 2023. The decrease in the sales volume of panels
for IT products primarily reflected the tapering of the temporary surge in demand for such products caused by the
COVID-19 pandemic, while at the same time such products purchased during the peak of the pandemic had not
reached their replacement cycles, as well as a continued decrease in market demand for IT products due in part to a
general decrease in consumer consumption levels as described above.
Revenue attributable to sales of panels for televisions decreased by 37.9% from W6,975 billion in 2022 to
W4,331 billion in 2023, resulting from a significant decrease in the number of units sold of panels in this category in
2023 compared to 2022, which was partially offset by a significant increase in the average selling price of panels in
this category in 2023 compared to 2022. The total unit sales of panels for televisions decreased by 52.6% from 29.3
million panels in 2022 to 13.9 million panels in 2023, whereas the average selling price of panels in this category
increased by 30.7% from W238 thousand in 2022 to W311 thousand in 2023. The decrease in the sales volume of
panels for televisions was mainly attributable to a decrease in the sales volume of our TFT-LCD television panels,
primarily reflecting our continued strategic focus to increase the proportion of higher-value OLED television panels
while decreasing the proportion of TFT-LCD television panels in our product mix, as well as a continued decrease in
market demand for televisions due in part to a prolonged general decrease in consumer consumption levels due in part
to rising inflation and interest rates and the continued economic volatility and uncertainty globally, especially in
Europe. The increase in the average selling price of television panels was mainly due to an increase in the proportion
of OLED television panels, which generally command higher selling prices than TFT-LCD television panels, in our
product mix, as well as the depreciation of the Korean Won against the U.S. dollar during 2023.
Revenue attributable to sales of panels for mobile and other products increased by 11.8% from W6,326
billion in 2022 to W7,071 billion in 2023, resulting from an increase in the average selling price of panels in this
category in 2023 compared to 2022, partially offset by a decrease in the number of units sold of panels in this category
in 2023 compared to 2022. The average selling price of panels in this category increased by 15.3% from W72
thousand in 2022 to W83 thousand in 2023, whereas the total unit sales of panels for mobile and other products
decreased by 3.3% from 87.8 million in 2022 to 84.9 million in 2023. The increase in the average selling price of
panels in this category was mainly due to the depreciation of the Korean Won against the U.S. dollar during 2023 and
the further increase in the proportion of panels with differentiated specialty features and larger panels, as well as an
increase in the proportion of higher-value OLED panels for high-end smartphones, in our product mix for panels in
this category. The decrease in the sales volume of panels for mobile and other products was attributable to a decrease
in market demand for other products due in part to a general decrease in consumer consumption levels due to rising
inflation and interest rates and the continued economic volatility and uncertainty globally, as well as our continued
strategic focus to increase the proportion of higher-end OLED products and reduce the production output of lower-end
TFT-LCD products.
Revenue attributable to sales of panels for auto products increased by 9.8% from W1,820 billion in 2022 to
W1,999 billion in 2023, resulting from an increase in the number of units sold of panels in this category in 2023
compared to 2022, partially offset by a decrease in the average selling price of panels in this category in 2023
compared to 2022. The total unit sales of panels for auto products increased by 13.7% from 15.3 million in 2022 to
17.4 million in 2023, whereas the average selling price of panels in this category decreased by 3.4% from W119
thousand in 2022 to W115 thousand in 2023. The increase in the sales volume of panels for auto products was
attributable to our timely development of new panels and our achievement of increased stability in the mass production
of our panels in this category, which together led to the strengthening of our collaboration with our end-brand
customers. The decrease in the average selling price of panels in this category was mainly attributable to sluggish
demand conditions in the automobiles industry, which more than offset the positive effects of the overall depreciation
of the Korean won against the U.S. dollar on the average selling price of such products during 2023.
56
In addition, our revenue attributable to royalty and others increased by 67.4% from W46 billion in 2022 to
W77 billion in 2023. The increase was due to a 76.5% increase in other revenue, consisting primarily of sales of
sample products and certain raw materials and components, from W34 billion in 2022 to W60 billion in 2023 and a
33.3% increase in royalty from W12 billion in 2022 to W16 billion in 2023.
Cost of Sales
Cost of sales decreased by 16.1% from W25,028 billion in 2022 to W20,986 billion in 2023. The decrease in
our cost of sales in 2023 compared to 2022 was attributable primarily to a decrease in raw materials and component
costs mainly related to selling fewer panel units overall in 2023 compared to 2022, partially offset by an increase in the
proportion of products with differentiated specialty features and newer technologies that require higher-cost raw
materials and components in our product mix. In addition, a decrease in overhead costs, resulting mainly from the
termination of our production of TFT-LCD panels at certain of our manufacturing facilities in Korea, as well as a
decrease in depreciation costs, resulting mainly from the one-time effect of the impairment losses we incurred in 2022
on our property, plant and equipment and intangible assets relating to our large-sized OLED display panel business,
which we newly distinguished as a separate cash-generating unit (“CGU”) from our existing Display CGU in 2022,
contributed to the decrease in cost of sales in 2023 compared to 2022. Such decreases were offset in part by an
increase in the value of our inventories due in part to the strengthening of the U.S. dollar, in which 89.6% of our raw
materials and component part purchases were denominated in 2023, against the Korean Won in 2023 as a whole,
compared to 2022 as a whole.
As a percentage of our total cost of sales, raw materials and component costs, labor costs, overhead costs,
depreciation and amortization costs and change in inventory costs constituted 59.0%, 11.1%, 13.5%, 15.2% and 1.2%,
respectively, in 2022 and 55.1%, 12.0%, 13.8%, 16.2% and 2.9%, respectively, in 2023.
As a percentage of revenue, cost of sales increased from 94.9% in 2022 to 98.4% in 2023. The increase in our
cost of sales as a percentage of revenue in 2023 compared to 2022 was attributable mainly to an increased share of
high-end products in our product mix during the same period as well as the continued increase in downward pricing
pressure in the global display panel industry and weaker overall market demand for display panels.
Cost of sales per square meter of net display area, which is derived by dividing total cost of sales by total
square meters of net display area shipped, increased by 36.8% from W794 thousand in 2022 to W1,086 thousand in
2023. Cost of sales per panel sold, which is derived by dividing total cost of sales by total number of panels sold,
decreased by 5.2% from W114 thousand in 2022 to W108 thousand in 2023. Such changes were due mainly to
decreases in the proportion of our large-sized television and IT panels, which generally have higher cost of sales per
panel, but lower cost of sales per square meter of net display area, relative to our small- and medium-sized panels
primarily in the mobile and others product category, sold in our product mix during the same period.
Gross Profit and Gross Margin
As a result of the cumulative effect of the reasons explained above, our gross profit decreased by 69.3% from
W1,124 billion in 2022 to W345 billion in 2023, and our gross margin decreased from 4.3% in 2022 to 1.6% in 2023.
Such decrease was primarily due to the overall decrease in the average selling prices of our panels mainly reflecting
increased downward pricing pressure affecting the global display panel industry due in part to a general decrease in
consumer consumption levels as described above, which outpaced the decrease in the cost of sales per panel sold in
2023 compared to 2022.
Selling and Administrative Expenses
Selling and administrative expenses decreased by 19.2% from W1,827 billion in 2022 to W1,476 billion in
2023. As a percentage of revenue, our selling and administrative expenses remained stable at 6.9% in each of 2022 and
2023. The decrease in selling and administrative expenses in 2023 compared to 2022 was attributable primarily to a
decrease in warranty expenses, resulting primarily from a reduction in defects in our products equipped with newer
technologies (including OLED) during such period and a general decrease in our overall sales volume in 2023
compared to 2022, and a decrease in shipping costs, resulting mainly from a decrease in our overall shipment volume
(especially the volume of large-sized product shipments) in 2023 compared to 2022 as well as a decrease in
international freight rates following the easing of the COVID-19 pandemic.
57
The following are the major components of our selling and administrative expenses for each of the years in
the two-year period ended December 31, 2023:
Year ended December 31,
2022
2023
(in billions of Won)
Salaries
₩
355
₩
373
Expenses related to defined benefit plan
27
25
Other employee benefits
91
87
Shipping
214
92
Fees and commissions
272
253
Depreciation
264
265
Taxes and dues
70
66
Advertising
108
76
Warranty
251
102
Insurance
15
14
Travel
18
18
Training
15
10
Others
127
95
Total
₩
1,827
₩
1,476
Research and Development Expenses
Research and development expenses decreased slightly by 0.1% from W1,382 billion in 2022 to W1,380
billion in 2023. As a percentage of revenue, our research and development expenses increased from 5.2% in 2022 to
6.5% in 2023. The research and development expenses in 2023 were incurred mainly in relation to research and
development activities related to OLED and next generation technologies and products.
Other Income (Expense), Net
Other income includes primarily foreign currency gain, and other expenses include primarily foreign currency
loss, impairment loss on property, plant and equipment and impairment loss on intangible assets. Our total net other
expense decreased significantly from W1,260 billion in 2022 to W314 billion in 2023. Such decrease was primarily
due to a significant decrease in net impairment loss on property, plant and equipment from W1,257 billion in 2022 to
W60 billion in 2023, as well as a decrease in net impairment loss on intangible assets from W134 billion in 2022 to
W55 billion in 2023. Such significant decreases in impairment losses on property, plant and equipment and on
intangible assets in 2023 were primarily attributable to the one-time effect of the impairment losses we incurred in
2022 on our property, plant and equipment and intangible assets relating to our large-sized OLED display panel
business, which we newly distinguished as a separate CGU from our existing Display CGU in 2022 following our
decision to terminate our TFT-LCD television display panel manufacturing operations in Korea and the resulting
reorganization of the related businesses. See Note 10(d) of the notes to our financial statements for a further discussion
of our assessment of impairment with respect to our large-sized OLED display panel business. Such decreases were
partially offset by a net foreign currency loss of W118 billion in 2023 compared to a net foreign currency gain of
W142 billion in 2022, reflecting higher exchange rate volatility in 2023 compared to 2022.
58
Finance Income (Costs), Net
Our total net finance costs increased significantly from W93 billion in 2022 to W512 billion in 2023. Such
increase was mainly attributable to a 74.2% increase in interest expense from W415 billion in 2022 to W723 billion in
2023, which was mainly due to increases in market interest rates as well as the average amount of our long-term
borrowings outstanding in 2023 compared to 2022, as well as net loss on valuation of derivatives of W76 billion in
2023 compared to net gain in valuation of derivatives of W128 billion in 2022, as a result of an overall depreciation of
the Korean Won against the U.S. dollar and higher exchange rate volatility in 2023 compared to 2022. Against such
fluctuations, we recognized net foreign currency gain of W48 billion in 2023 compared to net foreign currency loss of
W132 billion in 2022, as well as net gain on transaction of derivatives of W49 billion in 2022 and W179 billion in
2023.
Income Tax Benefit (Expense)
Our income tax benefit increased significantly from W238 billion in 2022 to W763 billion in 2023, resulting
from a significant increase in deferred tax benefit, which was partially offset by an increase in current tax expense in
2023 compared to 2022. Our deferred tax benefit increased by 148.1% from W385 billion in 2022 to W955 billion in
2023, whereas our current tax expense increased by 31.3% from W147 billion in 2022 to W193 billion in 2023, as we
recorded loss before income tax of W3,339 billion in 2023 compared to loss before income tax of W3,433 billion in
2022. Furthermore, we recognized a change in unrecognized deferred tax assets of W458 billion in 2022, due mainly
to applicable amendments to Korean tax laws and changes in our estimates of future taxable income, and W157 billion
in 2023, primarily reflecting changes in our estimates of future taxable income. The impact of changes in our estimates
of future taxable income on changes in unrecognized deferred tax assets was mainly related to tax credit carry
forwards in both 2022 and 2023. Our effective tax rates were not calculated in 2022 and 2023 due to the loss before
income tax we recorded in such years. See Notes 23 and 24 of the notes to our financial statements.
Loss for the Year
As a result of the cumulative effect of the reasons explained above, we recorded a loss for the year of W3,195
billion in 2022 and a loss of W2,577 billion in 2023. Our loss for the year as a percentage of revenue was (12.1)% in
2022 and loss for the year as a percentage of revenue was (12.1)% in 2023.
Item 5.B.Liquidity and Capital Resources
Our principal sources of liquidity have been net cash flows generated from our operating activities and debt
financing activities. We had cash and cash equivalents of W1,825 billion, W2,258 billion and W2,022 billion
(US$1,368 million) as of December 31, 2022, 2023 and 2024, respectively.
Our cash and cash equivalents was held in the following currencies as at December 31, 2024:
(in billions of Won)
Korean Won
₩
143
Chinese Yuan
41
U.S. Dollar
1,818
Other currencies
20
Total
₩
2,022
We also had short-term deposits in banks of W1,723 billion, W906 billion and W0.6 billion (US$0.4 million),
respectively, as of December 31, 2022, 2023 and 2024. The significant decreases in short-term deposits in 2024
compared to 2023, and 2023 compared to 2022, were mainly due to decreases in restricted cash deposits in connection
with secured borrowings from our subsidiaries. Our primary use of cash has been to fund capital expenditures related
to the expansion and improvement of our production capacity with respect to existing and newly developed products,
including the construction and ramping-up of new, or in certain cases, expansion or conversion of existing, fabrication
facilities and production lines and the acquisition of new equipment. We also use cash flows from operations for our
working capital requirements and servicing our debt payments. We expect our cash requirements for 2025 to be
primarily for repayment of maturing debt, working capital requirements and, to a lesser extent, capital expenditures.
59
As of December 31, 2022, we had current assets of W9,444 billion and current liabilities of W13,962 billion,
resulting in a working capital deficit of W4,518 billion. As of December 31, 2023, we had current assets of W9,503
billion and current liabilities of W13,885 billion, resulting in a working capital deficit of W4,382 billion. As of
December 31, 2024, we had current assets of W10,123 billion (US$6,850 million) and current liabilities of W15,859
billion (US$10,731 million), resulting in a working capital deficit of W5,736 billion (US$3,881 million). The decrease
in working capital deficit as of December 31, 2023, compared to the working capital deficit as of December 31, 2022,
was primarily attributable to a W859 billion increase in net trade accounts and notes receivable, which was mainly
caused by a decrease in the amount of trade accounts and notes receivable sold to financial institutions as well as the
depreciation of the Korean Won against the U.S. dollar as of the end of 2023 compared to the end of 2022, a W433
billion increase in our cash and cash equivalents, reflecting the combined effect of changes in our cash flows as
described below, and a W324 billion decrease in our other accounts payable, which was primarily attributable to a
decrease in the level of our ongoing capital investments. The effects of such changes were partially offset by a W817
billion decrease in deposits in banks, which mainly reflected a decrease in our restricted deposits as of the end of 2023
compared to the end of 2022 as described above, and a W561 billion increase in our advances received, which was
primarily attributable to advances received pursuant to long-term supply agreements in 2023, compared to no such
advances received in 2022. The increase in working capital deficit as of December 31, 2024, compared to the working
capital deficit as of December 31, 2023, was primarily attributable to our recognition of liabilities held for sale of
W1,657 billion in 2024, resulting from our agreement with TCL CSOT to dispose of our entire equity interest in LG
Display (China) Co., Ltd. and LG Display Guangzhou Co., Ltd. as discussed above, a W1,265 billion increase in
current financial liabilities, which mainly reflected an increase in our current portion of long-term borrowings payable
as of the end of 2024 compared to the end of 2023, and a W905 billion decrease in deposits in banks, which was
primarily attributable to a decrease in restricted cash deposits in connection with secured borrowings from our
subsidiaries. The effects of such changes were partially offset by a W1,198 billion decrease in other accounts payable,
which mainly reflected a decrease in our capital expenditures in 2024 compared to 2023, and a W983 billion increase
in assets held for sale, which was attributable to our agreement with TCL CSOT as discussed above.
Our management constantly monitors our working capital, and we have historically been able to satisfy our
cash requirements from cash flows from operations and debt financing. We believe that we have sufficient sources of
working capital, including in the form of debt financing, for at least the next 12 months following the date of this
annual report. In 2024, we entered into a number of short-term and long-term facility loan agreements, from which we
have drawn down the full aggregate principal amount of W270 billion (US$183 million), US$320 million and CNY
381 million in short-term loans, and W650 billion (US$440 million) and CNY 4,270 million in long-term loans, in
each case as of December 31, 2024, primarily to fund our capital expenditures and refinance our existing borrowings
maturing in 2024. In addition, on December 22, 2023, we entered into a syndicated loan agreement with The Korea
Development Bank and certain other banks in Korea in the amount of W650 billion (US$440 million), from which we
have drawn down the full aggregate principal amount of W200 billion (US$135 million) in December 2023, W100
billion (US$68 million) in February 2024, W220 billion (US$149 million) in April 2024 and W130 billion (US$88
million) in July 2024.
Our ability to satisfy our cash requirements from cash flows from operations and financing activities will be
affected by our ability to maintain and improve our margins and, in the case of external financing, market conditions,
which in turn may be affected by various factors outside of our control. Therefore, we re-evaluate our capital
requirements regularly in light of our cash flows from operations, the progress of our expansion plans and market
conditions. To the extent that we do not generate sufficient cash flows from our operations to meet our capital
requirements, we may rely on other financing activities, such as external borrowings and securities offerings, including
the issuance of equity, equity-linked and other debt securities. In March 2024, as part of our ongoing efforts to
improve our financial condition and liquidity, we issued 142,184,300 new shares of common stock (including
1,038,078 new shares represented by 2,076,156 ADSs) at a subscription price of W9,090 per share (and US$3.450019
per ADS) pursuant to a preemptive rights offering to our existing shareholders, including ADS holders, followed by a
public offering in Korea. We have used the proceeds of such offering to fund our capital investments, general
corporate purposes (including purchases of raw materials) and the repayment of certain of our outstanding debt.
Immediately following the completion of such offering, the number of issued and outstanding shares of our common
stock increased to 500,000,000.
Our net cash provided by operating activities amounted to W3,011 billion in 2022, W1,683 billion in 2023
and W2,412 billion (US$1,632 million) in 2024. The decrease in net cash provided by operating activities in 2023
compared to 2022 was mainly due to a decrease in cash collected from our customers primarily as a result of a
60
decrease in our sales revenue, as well as an increase in trade accounts and notes receivable of W1,014 billion in 2023
compared to a decrease of W1,833 billion in 2022, primarily resulting from a decrease in the amount of trade accounts
and notes receivable sold to financial institutions without recourse towards the end of 2023 compared to the end of
2022. The decrease in net cash provided by operating activities in 2023 compared to 2022 was offset in part by an
increase in long-term advances received of W1,580 billion in 2023 pursuant to long-term supply agreements compared
to no such long-term advances received in 2022. The increase in net cash provided by operating activities in 2024
compared to 2023 was mainly due to an increase in cash collected from our customers primarily as a result of an
increase in our sales revenue, as well as a decrease in cash outflow from trade accounts and notes receivable from
W1,014 billion in 2023 to W396 billion (US$268 million) in 2024. The increase in net cash provided by operating
activities in 2024 compared to 2023 was offset in part by the long-term advances received in 2023 discussed above
compared to no such advances received in 2024.
The cyclical market conditions that are characteristic of our industry, as well as the regular ramp-up of our
new fabrication facilities and production lines and our cost reduction measures, contribute to the fluctuations in our
inventory levels from period to period. As of December 31, 2023, our inventory levels decreased by 12.0% compared
to December 31, 2022. As of December 31, 2024, our inventory levels increased by 5.7% compared to December 31,
2023.
Inventories consisted of the following for the dates indicated:
As of December 31,
2022
2023
2024(1)
2024
(in billions of Won and millions of US$)
Finished goods
₩
822
₩
751
₩
945
US$
639
Work-in-process
1,235
1,146
1,102
746
Raw materials
652
457
460
311
Supplies
164
174
164
111
Total
₩
2,873
₩
2,528
₩
2,671
US$
1,807
(1)
For convenience, the Korean Won amounts are expressed in U.S. dollars at the rate of W1,477.86 to US$1.00, the noon buying rate in effect on
December 31, 2024, as certified by the Federal Reserve Bank of New York for customs purposes. This translation should not be construed as a
representation that the Korean Won amounts represent, have been or could be converted to U.S. dollars at that rate or any other rate.
Our net cash used in investing activities amounted to W6,700 billion in 2022, W2,589 billion in 2023 and
W1,363 billion (US$922 million) in 2024. Net cash used in investing activities primarily reflected the substantial
capital expenditures we have made in connection with the expansion and improvement of our OLED-focused
production capacity in recent years, mainly relating to construction of our new, or in certain cases, expansion or
conversion of existing, fabrication and module assembly facilities and acquisition of new equipment. These cash
outflows from capital expenditures amounted to W5,079 billion, W3,483 billion and W2,130 billion (US$1,441
million) in 2022, 2023 and 2024, respectively. We intend to fund our capital requirements associated with our
expansion and construction projects with cash flows from operations and financing activities, including external long-
term borrowings and bond issuances.
We currently expect that, in 2025, our total capital expenditures on a cash out basis will be at a similar level
to those in 2024 and will be used primarily to continue to fund our previously announced investments related to our
continued and ongoing transition to an OLED-centric business structure, as well as other essential recurring
investments. However, our overall expenditure levels and our allocation among projects are subject to many
uncertainties. We review the amount of our capital expenditures and may make adjustments from time to time based
on cash flows from operations, the progress of our expansion plans and market conditions. As of December 31, 2024,
our commitments in relation to future acquisitions of property, plant and equipment and intangible assets amounted to
W465 billion (US$315 million).
Our net cash provided by financing activities amounted to W1,946 billion in 2022 and W1,351 billion in
2023, and our net cash used in financing activities amounted to W1,334 billion (US$903 million) in 2024. The
decrease in net cash provided by financing activities in 2023 primarily reflects net repayment of short-term borrowings
in 2023 compared to net proceeds from short-term borrowings in 2022, partially offset by increases in net proceeds
from long-term borrowings and bonds in 2023 compared to 2022. The net cash used in financing activities in 2024
compared to net cash provided by financing activities in 2023 primarily reflects decreases in net proceeds from
issuance of long-term borrowings and short-term borrowings in 2024 compared to 2023 as well as an increase in our
61
repayment of current portion of long-term borrowings in 2024 compared to 2023, partially offset by our capital
increase through a preemptive rights offering in March 2024.
At our annual general meeting of shareholders that was held on March 23, 2022, we declared a cash dividend
of W650 per share of common stock, amounting to a total cash dividend of W232.6 billion to our shareholders of
record as of December 31, 2021. At each of our annual general meeting of shareholders that was held on March 21,
2023, March 22, 2024 and March 20, 2025, we did not declare any cash dividend to our shareholders.
We had a total of W2,579 billion, W1,876 billion and W970 billion (US$656million) of short-term
borrowings outstanding as of December 31, 2022, 2023 and 2024, respectively. Approximately 3% of our outstanding
short-term borrowings as of December 31, 2024 were subject to floating interest rates. For further information
regarding our short-term borrowings, including their interest rate and currency structure, please see Note 12 of the
notes to our financial statements.
As of December 31, 2024, we maintained accounts receivable sales negotiating facilities with several banks
for up to an aggregate amount of US$1,000 million at the parent company level in connection with our export sales
transaction with our subsidiaries. In addition, we and our subsidiaries have also entered into various other accounts
receivable sales negotiating facilities for up to an aggregate amount of US$4,484million. For further information
regarding these facilities, please see Note 15 of the notes to our financial statements.
As of December 31, 2024, we had outstanding long-term debt including current portion in the amount of
W13,582 billion (US$9,190 million) and prior to deducting discounts on bonds, consisting of W992 billion of Korean
Won denominated bonds, US$100 million of U.S. dollar denominated bonds, US$2,528 million of U.S. dollar
denominated long-term borrowings, CNY20,164 million of CNY denominated long-term borrowings and W4,669
billion of Korean Won denominated long-term borrowings. As of December 31, 2024, 28% of our outstanding long-
term debt were subject to fixed interest rates.
The terms of some of our long-term debt contain provisions that would trigger a requirement for early
repayment. The principal and interest under these obligations may be accelerated if there is a default, including
defaults triggered by failure to comply with financial covenants and cross defaults triggered under our other debt
obligations. We believe we were in compliance with the covenants under our debt obligations at December 31, 2024.
For further information about our short- and long-term debt obligations as of December 31, 2024, including their
interest rate and currency structure, see Note 12 of the notes to our financial statements.
As of December 31, 2024, we have entered into five agreements to guarantee the payment obligations in the
aggregate amount of US$1,261 million of our subsidiary LG Display Vietnam Haiphong Co., Ltd. under credit
facilities and payables facilities with various financial institutions, including Sumitomo Mitsui Banking Corporation,
Standard Chartered Bank, Citibank, Export-Import Bank of Korea and Bank of Australia and New Zealand, among
other lenders.
We also utilize cross-currency swap contracts and forward exchange contracts to hedge our foreign currency
risk. See “Item 11. Quantitative and Qualitative Disclosures about Market Risk – Foreign Currency Risk.”
62
The following table summarizes our material short- and long-term cash requirements as of December 31,
2024:
Payments Due by Period
(in billions of Won)
Total
Less than
6 months
6 months-1
year
1-2 years
2-5 years
More than
5 years
Unsecured bank borrowings
₩
3,210
694
992
839
685
—
Secured bank borrowings
11,244
3,037
1,618
3,102
3,462
25
Unsecured bond issues
1,186
631
12
417
126
—
Trade accounts and notes payable
4,156
3,885
271
—
—
—
Other accounts payable(1)
1,724
1,405
319
—
—
—
Long-term other accounts payable
323
—
—
69
192
62
Securities deposits received
189
—
—
7
182
—
Lease liabilities
61
24
13
14
9
1
Derivatives
11
1
4
4
2
—
Total contractual cash obligations
₩
22,104
9,677
3,229
4,452
4,658
88
(1)
Includes the amount of utility expenses and other expenses paid using the enterprise procurement cards. For further information, please see Note 25 of
the notes to our financial statements.
We intend to fund our cash commitments with cash flows generated from our operations as well as debt
financing activities. In addition, we also have continuing obligations to make cash royalty payments under our
technology license agreements, the amount of which are generally determined based on a percentage of sales of our
display products.
Expenses relating to our license fees and royalty payments under existing license agreements were W152
billion in 2022, W146 billion in 2023 and W145 billion (US$98 million) in 2024, representing 6.3%, 6.1% and 6.5%
of our research and development related expenditures in 2022, 2023 and 2024, respectively. We expect to make
additional license fee payments as we enter into new technology license agreements from time to time with third
parties.
Taxation
In 2024, the statutory corporate income tax rate applicable to us was 9.9% (including local income surtax) for
the first W200 million of our taxable income, 20.9% (including local income surtax) for our taxable income between
W200 million and W20 billion, 23.1% (including local income surtax) for our taxable income between W20 billion
and W300 billion, and 26.4% (including local income surtax) for our taxable income in excess of W300 billion.
In recent years, the Organization for Economic Cooperation and Development has introduced and
implemented the Base Erosion and Profit Shifting 2.0 framework (“BEPS 2.0”), which imposes a minimum tax for
multinational enterprise groups with total consolidated group revenue of €750 million or more in at least two of the
four most recent fiscal years (the “global minimum tax requirement”). Under the model rules of BEPS 2.0, a
multinational enterprise group meeting the above-described criteria are required to pay a top-up tax on excess profits
realized by a consolidated entity in any jurisdiction in which the effective tax rate for the jurisdiction is below a 15%
minimum rate. The top-up tax must be paid to the tax authority of the country in which the responsible entity (either
the controlling company or the local entity, depending on the jurisdiction) is located and meets certain requirements. In
2023, the Korean government enacted a new tax legislation, which is effective for fiscal years that begin on or after
January 1, 2024, that reflects the global minimum tax requirement. Based on our assessment, we had no current tax
expenses related to the global minimum tax requirement for the year ended December 31, 2024.
Tax Credits
We are entitled to a number of tax credits relating to certain investments in tangible assets for business use
(excluding certain assets for which tax credits are not permitted under Korean tax laws) and facilities used for research
and development and human resources development. For example, in 2024, under the Restriction of Special Taxation
Act, we were entitled to a tax credit of 15% of our qualifying capital investments in certain national strategic
technology facilities in 2024. Under the same law, we are also entitled to a tax credit on a percentage of our research
and development expenses incurred for procuring certain national strategic technologies, which include OLED display
63
technology. The applicable amount of such tax credit is calculated by multiplying the applicable research and
development expenses by the sum of (x) 30% and (y) three times the proportion of such research and development
expenses as a percentage of revenue.
Tax credits may be utilized for an amount up to the tax payable using the minimum tax rate for a given fiscal
year. Tax credits not utilized in the fiscal year during which the relevant investment was made may be carried forward
over the next ten years. As of December 31, 2024, we had recognized deferred tax assets related to these credits of
W145 billion (US$98 million), which may be utilized against future income tax liabilities through 2034. See Note
23(b) of the notes to our financial statements.
Item 5.C. Research and Development, Patents and Licenses, etc.
Research and Development
The display panel industry is subject to rapid technological changes. We believe that effective research and
development is essential to maintaining our position as one of the industry’s leading technology innovators.
To meet the demands of the future trends, we have formulated a long-term research and development strategy
aimed at improving the process, performance and design of the existing products and diversifying the use of display
panels as new opportunities arise with the development of communication systems and information technology. The
following are examples of products and technologies that have been developed through our research and development
activities in recent years:
•
In 2022, we produced the world’s first 97-inch OLED television display product as well as the world’s
first large-sized (55-inch, 65-inch and 77-inch) television display products applying META OLED
technology. In addition, we produced our first notebook display panel with a borderless design, which
applies variable refresh rate technology with low power consumption, and we also produced the world’s
first 27.6-inch multi-tasking monitor display product with a 16:18 screen ratio as well as the world’s first
34-inch 1900R IPS Black monitor product. For gaming display products, we developed the world’s first
24.5-inch 480Hz FHD gaming monitor display that applies high-performance oxide-TFT, and we
produced the world’s first 27-inch and 45-inch gaming display panel applying META OLED technology.
For automotive display products, we produced the world’s first 12.3-inch automotive co-driver display
panel that applies double LGP (Light Guide Panel) control technology as well as the world’s first 12.3-
inch automotive cluster display panel that applies glassless 3D technology.
•
In 2023, we developed the world’s first medium-sized transparent WOLED display product (30-inch HD)
with a transparency rate of 45% and luminance of 600/200 nit. In addition, we produced the world’s first
17-inch foldable pen touch notebook display panel applying tandem OLED technology. For gaming
display products, we developed the world’s first 34-inch and 39-inch ultra-wide, full-size 240Hz gaming
monitor display product that applies high-speed, fast response time, high-luminance and curved OLED
technology.
•
In 2024, we developed our first notebook panel based on the ATO (Advanced Thin OLED) structure, a
13.4-inch model that incorporates Touch on Encap technology. We also introduced Micro LED display
products, including a 22.3-inch module for 136-inch 4K business-to-consumer products and a 22.3-inch
module for infinitely expandable business-to-business applications. Additionally, we produced large
WOLED desktop monitors applying the first-ever “4Stack” technology in various sizes ranging from 48-
inches to 83-inches, offering superior brightness, color accuracy and fast response times, while also
achieving greater cost efficiency. For gaming display products, we launched the world’s first Gaming
OLED QHD 480Hz monitor product (27-inch), along with the world’s first gaming DFR (Dynamic
Frequency & Resolution) product, which allows the implementation of both high resolution (UHD
240Hz) and high refresh rate (FHD 480Hz) on a single display panel while providing maximized sound
effects. Additionally, we developed our first dual-resolution gaming LCD monitor product (27-inch),
which supports both fast-paced (FHD 330Hz) and high-resolution (UHD 165Hz) gaming on a single
screen.
In line with our overall business strategy to focus on the development and production of OLED and other
high-end differentiated specialty display products, we plan to continue to concentrate on the research and development
of OLED and other newer display technologies, while also exploring new growth opportunities in the application of
64
display panels, such as automotive displays and life displays. Life displays include gaming displays and transparent
displays, among others.
In order to maintain our position as one of the industry’s technology leaders, we believe it is important not
only to increase direct spending on research and development, but also to manage our research and development
capability effectively in order to successfully implement our long-term strategy. In connection with our efforts to
enhance our research and development capability with respect to next-generation display technologies, we opened the
R&D Center in Paju, Korea in April 2012. In addition, we have further expanded our research and development
resources by allocating some of our research and development personnel to the newly-opened LG Science Park, which
is located in western Seoul and commenced its operations in December 2017. LG Science Park accommodates
researchers from various LG Group-affiliated companies with expertise in a broad range of disciplines, including
electronics, chemistry, nanotechnology, display, fabrication, life sciences and new materials, to focus on developing
and testing innovative new technologies.
We complement our in-house research and development capability through collaborations with universities
and other third parties. For example, we provide project-based funding to both domestic and overseas universities as a
means to recruit promising engineering students and to research and develop new technologies. As part of our such
efforts, we operate cooperation centers within various universities, including Korea University and Korea Advanced
Institute of Science and Technology, in order to promote the research and development of various technologies for use
in future display panels. In 2021 and 2022, we entered into agreements with Yonsei University, Hanyang University
and Sungkyunkwan University to establish a “Display Convergence Engineering Department” at each of these
universities that offers specialized classes in technical fields such as electronics, electricity, physics, chemistry and
materials with the aim to cultivate next-generation talents. We also enter into joint research and development
agreements from time to time with third parties for the development of technologies in next-generation display fields.
In addition, we belong to several display industry consortia, and we receive annual government funding to support our
research and development efforts.
While we primarily rely on our own capacity for the development of new technologies in the display panel
design and manufacturing process, we rely on third parties for certain key technologies to enhance our technology
leadership, as further described in “—Intellectual Property” below.
Intellectual Property
Overview
Our business has benefited from our patent portfolio, which includes patents for display technologies,
manufacturing processes, products and applications related to the production of TFT-LCD and OLED panels. We hold
a large number of patents in Korea and in other countries, including in the United States, China, Japan, Germany,
France, Great Britain, Taiwan, India and Vietnam. These patents will expire at various dates upon the expiration of
their respective terms ranging from 2025 to 2044. In March 2014, we formed Unified Innovative Technology, LLC in
the United States, a limited liability company solely owned by us for the purpose of patent portfolio management.
As part of our ongoing efforts to prevent infringements on our intellectual property rights and to keep abreast
of critical technology developments by our competitors, we closely monitor patent applications in Korea and various
other countries in which we sold our products. We intend to continue to file patent applications, where appropriate, to
protect our proprietary technologies. We also enter into confidentiality agreements with each of our employees and
consultants upon the commencement of an employment or consulting relationship. These agreements generally
provide that all inventions, ideas, discoveries, improvements and copyrightable material made or conceived by the
individual arising out of the employment or consulting relationship and all confidential information developed or made
known to the individual during the term of the relationship are our exclusive property. In addition, we have increased
our efforts to safeguard our propriety information by engaging in in-house information protection awareness activities
with our employees.
License Agreements
We enter into license or cross-license agreements from time to time with third parties with respect to various
device and process technologies to complement our in-house research and development. We engage in regular
discussions with third parties to identify potential areas for additional licensing of key technologies.
65
Expenses relating to our license fees and royalty payments under existing license agreements were W152
billion in 2022, W146 billion in 2023 and W145 billion (US$98 million) in 2024, representing 6.3%, 6.1% and 6.5%
of our research and development related expenditures in 2022, 2023 and 2024, respectively. We recognized royalty
income in the amount of W12 billion in 2022, W16 billion in 2023 and W61 billion (US$41 million) in 2024. The
following are examples of license agreements we have entered into:
•
We have a license agreement with each of Columbia University, Penn State University, Honeywell
International, Honeywell Intellectual Properties, Plasma Physics Corporation and Fergason Patent
Properties. Each license agreement provides for a non-exclusive license under certain patents relating to
TFT-LCD technologies.
•
We have a license agreement with Universal Display Corporation for a non-exclusive license under
certain patents relating to OLED technologies.
•
We have a license agreement with Semiconductor Energy Laboratory for a non-exclusive license under
certain patents relating to TFT-LCD and OLED technologies.
•
We have a cross-license agreement with each of Hitachi, HannStar and Hydis for a non-exclusive license
under certain patents relating to display technologies.
•
We have separate cross-license agreements with each of NEC and AU Optronics in connection with the
settlement of certain patent infringement lawsuits. Under the agreements, each party grants the other
party a license under certain patents relating to TFT-LCD technologies.
•
We are licensed to use certain patents for our TFT-LCD products pursuant to a cross-license agreement
between Philips Electronics and Toshiba Corporation.
In addition to the above, we have also entered into license or cross-license agreements with other third parties in the
course of our business operations in connection with certain patents, which such third parties own or control.
As well as licensing key technologies from third parties, we aim to benefit from our own patents and other
intellectual property rights by granting licenses to third parties from time to time in return for royalty payments. We
have also entered into certain patent purchase and license agreements with third parties, where we receive a portion of
the license payments.
Item 5.D.Trend Information
These matters are discussed under Item 5.A. and Item 5.B. above where relevant.
Item 5.E. Critical Accounting Estimates
Our financial statements are prepared in accordance with IFRS Accounting Standards as issued by the
IASB. See Note 2(d) of the notes to our financial statements for a discussion on the accounting policies critical to an
understanding of our consolidated financial statements.
Item 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
Item 6.A. Directors and Senior Management
Board of Directors
Our board of directors has the ultimate responsibility for the management of our business affairs. Our articles
of incorporation provide for a board consisting of between five and seven directors, more than half of whom must be
outside directors. Our shareholders elect all directors at a general meeting of shareholders. Under the Korean
Commercial Code, a representative director of a company established in Korea is authorized to represent and act on
behalf of such company and has the power to bind such company. Cheoldong Jeong is currently our sole representative
director.
66
The term of office for our directors shall not exceed the closing of the annual general meeting of shareholders
convened in respect of the last fiscal year within three years after they take office. Our board must meet at least once
every quarter, and may meet as often as the chairman of the board of directors or the person designated by the
regulation of the board of directors deem necessary or advisable.
The tables below set forth information regarding our current directors and executive officers. The business
address of all of the directors and executive officers is LG Twin Towers, 128 Yeoui-daero, Yeongdeungpo-gu, Seoul
07336, Korea.
Our Outside Directors
Our current outside directors are set out in the table below. Each of our outside directors meets the applicable
independence standards set forth under the rules of the Korean Commercial Code and also meets the applicable
independence criteria set forth under Rule 10A-3 of the Exchange Act.
Name
Date of Birth
Position
First Elected/
Appointed
Term Expires
Principal Occupation
Outside of LG Display
Doo Cheol Moon
November 5, 1967
Director
March 2021(1)
March 2027
Professor, School of Business,
Yonsei University
Chung Hae Kang
May 20, 1964
Director
March 2022(2)
March 2028
Professor, University of Seoul
Law School
Jung Suk Oh
September 30, 1970
Director
March 2023(3)
March 2026
Professor, Operations
Management, Seoul
National University
Sang Hee Park
December 2, 1965
Director
March 2023
March 2026
Professor, Materials Science and
Engineering, Korea Advanced
Institute of Science and Technology
(1)
Mr. Moon was re-elected as an outside director at our annual general meeting of shareholders in March 2024.
(2)
Ms. Kang was re-elected as an outside director at our annual general meeting of shareholders in March 2025.
(3)
Prior to his election to our board of directors at our annual general meeting of shareholders in March 2023, Mr. Oh previously served as a
court-appointed temporary outside director and member of the Audit Committee since April 2022.
Our Non-Outside Directors
Our current non-outside directors are set out in the table below:
Name
Date of Birth
Position
First Elected/
Appointed
Term Expires
Principal
Occupation
Outside of
LG Display
Cheoldong Jeong
May 11, 1961
President, Chief Executive
Officer, Representative Director
March 2024
March 2027
—
Sunghyun Kim
December 12, 1967
Executive Vice President, Chief
Financial Officer, Director
March 2022(1)
March 2028
—
Sangwoo Lee
November 8, 1970
Director
March 2025
March 2028
—
(1)
Mr. Kim was re-elected as a non-outside director at our annual general meeting of shareholders in March 2025.
67
Our Non-Director Executive Officers
Our current non-director executive officers are set out in the table below:
Name
Position
Responsibility and Division
Age
Myoung Kyu Kim
President
Chief Cost Innovation Officer
62
Yong Min Ha
Executive Vice President
Head of Quality Management Center
58
Soo Young Yoon
Executive Vice President
Chief Technology Officer
58
Hyun Chul Choi
Executive Vice President
Head of SC Business Unit
57
Sang Ho Song
Executive Vice President
Chief Human Resource Officer
56
Byeong Koo Kim
Senior Vice President
Head of Medium Display Business Unit
57
Young Seok Choi
Senior Vice President
Head of Production Technology Center
57
Jeong Ki Park
Senior Vice President
Head of Medium Display Development Group
56
Hyeon Woo Lee
Senior Vice President
Head of Large Display Business Unit
57
Jin Hyo Lee
Senior Vice President
Head of Legal Group
53
Woo Sup Shin
Senior Vice President
Head of Large Display Development Group
55
Seong Hee Kim
Senior Vice President
Chief Safety Environment Officer
56
Yoo Seok Park
Senior Vice President
Head of Medium/Large Display Manufacture Center
54
Jin Nam Park
Senior Vice President
Head of Purchasing Group
53
Myung Su Suk
Senior Vice President
Head of Medium-Small Display Module Center
54
Heung Soo Kim
Senior Vice President
Head of SC Panel Center
54
Han Koo Lee
Vice President
Head of Business Support Group
57
Keuk Sang Kwon
Vice President
Head of Auto Business Group
54
Sang Yoon Park
Vice President
Head of SC Development Group
56
Eun Kuk Kyung
Vice President
Head of Accounting Division
55
Jeong Min Kim
Vice President
Head of Jeong-do Management Division
53
Hoon Jeong
Vice President
Head of Medium Display Panel/Advanced Development Division
52
Seung Ho Kwon
Vice President
Head of Medium/Large Display Factory 1
53
Tae Rim Lee
Vice President
Head of Large Display Product Development Division 1
50
In Hyuk Song
Vice President
Head of Auto Product Development Division 1
47
Joon Young Yang
Vice President
Head of Advanced Technology Laboratory
54
Tae Hyung Lim
Vice President
Head of Medium Display Sales Division 2
55
Kyung Joon Kwon
Vice President
Head of SC Development Division 2
49
Sung Joon Bae
Vice President
Head of Large Display Panel Development Division
54
Won Gyun Youn
Vice President
Head of Medium Display Product Development Division 3
53
Ki Young Kim
Vice President
Head of Quality Innovation Division
53
Ji Ho Back
Vice President
Head of OC Research/Development Division
53
Seung Do Kim
Vice President
Head of Module Technology Division
53
In Kwan Choi
Vice President
Head of Vietnam Subsidiary
54
Jong Suk Jeon
Vice President
Head of SC Sales/Marketing Group
50
Sang Hyun Ahn
Vice President
Head of Auto Sales Division
54
Won Seok Kang
Vice President
Head of Large Display Product Planning Division
53
Whan Woo Park
Vice President
Head of SC Sales Division
52
Byung Seung Lee
Vice President
Head of DX Group
48
Hyung Jung Lee
Vice President
Head of Large Display LCD Supply Chain Management
56
Jae Hyeob Seo
Vice President
Head of Gumi Complex Division
54
Hu Kag Lee
Vice President
Head of LGDCO Subsidiary
54
Jong Uk Bae
Vice President
Head of Device Process Research Division
54
Jae Jun Ahn
Vice President
Leader of Yield TDR
52
Han Yong Nam
Vice President
Head of Purchasing Division 2
56
Juhn Suk Yoo
Chief Research Fellow
Leader of SC Advanced Technology Task
53
Tae Wook Kang
Vice President
Head of Medium Display Sales/Marketing Group
48
Kyu Dong Kim
Vice President
Head of Finance & Risk Management Division
47
Gwang Tae Kim
Vice President
Head of Medium Display Product Development Division 2
53
Joon Hyeok Jang
Vice President
Head of Japan Office
52
Ki Hwan Son
Vice President
Head of Auto Marketing Product Planning Division
47
Seong Gon Kim
Vice President
Head of Medium Display Sales Division 3
47
Jong Duck Kim
Vice President
Head of Large Display Planning & Management Division
54
Sang Hoon Jung
Vice President
Head of Panel Advanced Research Division
48
Ui Jin Chung
Vice President
Leader of EXO Task
53
Dong Hee Kim
Vice President
Leader of SC Cost Innovation TDR
54
Ki Sang Lee
Vice President
Head of Labor Management Division
54
Pyung Hun Kim
Vice President
Head of Auto Product Development Division 2
51
Jae Won Jang
Vice President
Head of Medium Display Product Planning Division
50
Heung Lyul Cho
Vice President
Head of Product Technology Division
52
Nak Jin Seong
Vice President
Head of Large Display Development Division 2
47
Yun Seon Kang
Vice President
Head of Equipment Technology Division
55
Sang Goon Whang
Vice President
Head of Large Display Sales Division 1
50
Jun Tak Oh
Vice President
Head of AI/Big Data Research Division
48
Suk Hyun Lee
Vice President
Head of Paju Complex Division
52
Woong Gi Jun
Vice President
Head of R&D Strategy/Planning Division
48
Min Hyoung Lee
Vice President
Head of Strategy/Marketing Division
54
Kyuong Hyung Lee
Vice President
Head of Medium/Large Display Factory 2
50
Nack Bong Choi
Vice President
Head of SC Development Division 1
51
Yeoun Woo Sung
Vice President
Head of SC Customer Support Division
46
Seung Hyun Cho
Vice President
Head of Business Control & Management Division
48
Tae Hyoung Kwak
Vice President
Head of Material Research Division
50
Hyoung Kun Lee
Vice President
Head of Public Relations Division
52
Hong Soo Kim
Vice President
Head of SC Development Division 5
50
Hak Soo Park
Vice President
Head of Development/Manufacture DX Division
47
Hyun Seung Lee
Vice President
Head of Module O/S Division
50
Jin Sung Kim
Vice President
Head of Circuit Algorithm Research Division
49
Seung Ho Kim
Vice President
Head of Production Technology Division
51
Dong Ik Lee
Vice President
Head of Purchasing Division 1
48
Ik Soo Ahn
Vice President
Head of SC SCM Division
51
68
Item 6.B. Compensation
The aggregate remuneration and benefits-in-kind we paid in 2024 to our directors was W2.5 billion (US$1.7
million). This included W351 million (US$0.2 million) in salary paid to Ho Young Jeong, our former chief executive
officer, and W1.2 billion (US$1.0 million) in salary paid to Cheoldong Jeong, our chief executive officer, and W545
million (US$0.4 million) in salary paid to Sunghyun Kim, our chief financial officer, in each case for the period during
which each such person served on our board of directors in 2024.
The aggregate remuneration and benefits-in-kind we paid in 2024 to our non-director executive officers was
W32.2 billion (US$21.8 million).
The compensation of the five individuals who received the highest compensation among those who received
total annual compensation exceeding W500 million in 2024 was as follows:
Composition of Total Compensation
Name
Position
Salary
Bonus(1)
Retirement
Benefits
Total
Compensation
(in millions of Won)
Ho Young Jeong(2)
President
₩
351
—
₩
1,170
₩
1,521
Kang Yeol Oh(2)
Advisory Officer
₩
241
—
₩
1,240
₩
1,481
Cheoldong Jeong
President
₩
1,424
—
₩
—
₩
1,424
Han Seop Kim(2)
Advisory Officer
₩
250
—
₩
1,034
₩
1,284
Hee Yeon Kim(2)
Advisory Officer
₩
243
—
₩
939
₩
1,182
(1)
Based on our performance in 2024.
(2)
Former officer who retired from his position as of March 31, 2024.
Our articles of incorporation provide for a stock option plan to aid retention of executives and key staff and to
provide an incentive to meet strategic objectives. All of the stock options we have previously granted have expired and
none are currently outstanding. In addition, remuneration for our directors is determined by shareholder resolution, and
severance payments to our directors are made in accordance with our regulations on severance payments adopted by
our shareholders. We also maintain a cash-based incentive plan for our executive officers and other key managerial
employees adopted by our board of directors. Incentive payments are determined based on various long-term
performance criteria and paid annually, subject to our cash resources and performance in such year. In addition, our
executive officers and other key managerial employees are also eligible for bonuses payable under our employee profit
sharing plan if certain performance criteria are met.
We carry liability insurance for the benefit of our directors and officers against certain liabilities incurred by
them in their official capacities. This insurance covers our directors and officers, as well as those of our subsidiaries,
against certain claims, damages, judgments and settlements, including related legal costs, arising from a covered
individual’s actual or alleged breaches of duty, neglect or other errors, arising in connection with such individual’s
performance of his or her official duties. The insurance protection also extends to claims, damages, judgments and
settlements, including related legal costs, arising out of shareholders’ derivative actions or otherwise relating to our
securities. Policy exclusions include, but are not limited to, claims relating to fraud, willful misconduct or criminal
acts, as well as the payment of punitive damages. In 2024, we paid a premium of approximately US$1.2 million in
respect of this insurance policy.
Item 6.C. Board Practices
See “Item 6.A. Directors and Senior Management” above for information concerning the terms of office and
contractual employment arrangements with our directors and executive officers.
Committees of the Board of Directors
We currently have five committees that serve under our board of directors:
•
Audit Committee;
•
Outside Director Nomination Committee;
69
•
Management Committee;
•
Related Party Transaction Committee; and
•
ESG Committee;
Under our articles of incorporation, our board of directors may establish other committees if they deem them
necessary. Our board of directors appoint each member of these committees except that candidates for the Audit
Committee will first be elected by our shareholders at the general meeting of shareholders.
Audit Committee
Under Korean law and our articles of incorporation, we are required to have an Audit Committee. Our Audit
Committee is currently comprised of four outside directors: Doo Cheol Moon, Chung Hae Kang, Jung Suk Oh and
Sang Hee Park. The chairman is Doo Cheol Moon. Members of the Audit Committee are elected by our shareholders
at the annual general meeting of shareholders and all members must meet the applicable independence criteria set forth
under the rules and regulations of the Sarbanes-Oxley Act of 2002 and the Korean Commercial Code. The committee
reviews all audit and compliance-related matters and makes recommendations to our board of directors. The Audit
Committee’s primary responsibilities include the following:
•
engaging or dismissing independent auditors;
•
approving independent audit fees;
•
approving audit and non-audit services;
•
reviewing annual and interim financial statements;
•
reviewing audit results and reports, including management comments and recommendations;
•
reviewing our system of controls and policies, including those covering conflicts of interest and business
ethics;
•
assessing compliance with disclosure and filing obligations;
•
considering significant changes in accounting practices; and
•
examining improprieties or suspected improprieties.
In addition, in connection with general meetings of shareholders, the committee examines the agenda for, and
financial statements and other reports to be submitted by, the board of directors at each general meeting of
shareholders. Our external auditor reports directly to the Audit Committee. Our external auditor is invited to attend
meetings of this committee when needed or when matters pertaining to the audit are discussed.
The committee holds regular meetings at least once each quarter, and more frequently as needed.
Outside Director Nomination Committee
Under Korean law and our articles of incorporation, we are required to have an Outside Director Nomination
Committee for the nomination of outside directors. Our Outside Director Nomination Committee is currently
comprised of two outside directors, Doo Cheol Moon and Chung Hae Kang, and one non-outside director, Sangwoo
Lee. The chairman is Chung Hae Kang. The Outside Director Nomination Committee reviews the qualifications of
potential candidates for outside directors and proposes nominees to serve on our board of directors.
The committee holds meetings as necessary for the nomination of outside directors.
Management Committee
The Management Committee is comprised of two non-outside directors, Cheoldong Jeong and Sunghyun
Kim. The chairman is Cheoldong Jeong. The committee’s primary responsibilities include making recommendations
regarding matters relating to our operation and other matters delegated to the committee by our board of directors.
The committee holds meetings from time to time as needed.
70
Related Party Transaction Committee
The Related Party Transaction Committee is comprised of three outside directors, Chung Hae Kang, Jung Suk
Oh and Sang Hee Park, and our chief financial officer and non-outside director, Sunghyun Kim. The chairman is
Chung Hae Kang. The committee reviews related party and other internal transactions to ensure compliance with the
Monopoly Regulation and Fair Trade Act and makes recommendations to our board of directors.
The committee holds regular meetings at least once each half-year, and more frequently as needed.
ESG Committee
The ESG Committee is comprised of four outside directors, Doo Cheol Moon, Chung Hae Kang, Jung Suk
Oh and Sang Hee Park, and our chief executive officer and non-outside director, Cheoldong Jeong. The chairman is
Doo Cheol Moon. The committee is responsible for reviewing and establishing policies and strategies relating to the
environment and safety, social responsibility, customer value, shareholder value and corporate governance, and
making recommendations to our board of directors.
The committee holds regular meetings at least once each half-year, and more frequently as needed.
Item 6.D. Employees
As of December 31, 2024, we had 60,792 employees, including 35,646 employees in our overseas
subsidiaries. The following table provides a breakdown of our employees by function as of December 31, 2022, 2023
and 2024:
As of December 31,
Employees(1)
2022
2023
2024
Production
58,050
55,469
50,814
Technical(2)
8,612
8,098
7,393
Sales & Marketing
1,700
1,603
1,432
Management & Administration
1,294
1,248
1,153
Total
69,656
66,418
60,792
(1)
Includes employees of our subsidiaries.
(2)
Includes research and development and engineering personnel.
To recruit promising engineering students at leading Korean universities, we work with these universities on
research projects where these students can gain exposure to our research and development efforts. We also provide on-
the-job training for our new employees and develop training programs to identify and promote new leaders.
As of December 31, 2024, more than half of our employees based in Korea were union members, and
production employees accounted for substantially all of these members. We have a collective bargaining arrangement
with our labor union, which is negotiated once a year. We consider our relationship with our employees to be good.
The salaries of our employees are reviewed annually. Salaries are adjusted based on individual and team
performance, industry standards and inflation. As an incentive, discretionary bonuses may be paid based on the
performance of individuals, and a portion of our profits may be paid to our employees under our profit sharing plan if
certain performance criteria are achieved. We also provide a wide range of benefits to our employees including
medical insurance, employment insurance, workers compensation, free medical examinations, child tuition and
education fee reimbursements and low-cost housing for certain employees.
Under the Guarantee of Workers’ Retirement Benefits Act, employees with one year or more of service are
entitled to receive, upon termination of their employment, a lump-sum severance payment based on the length of their
service and their average wage during the last three months of employment. As of December 31, 2024, the present
value of our defined benefit obligations amounted to W1,444 billion (US$977 million), while the fair value of our
benefit plan assets amounted to W1,604 billion (US$1,085 million), including amounts relating to employees of our
foreign subsidiaries. See Note 13 of the notes to our financial statements for a discussion on the method of calculating
our recognized liabilities for defined benefit obligations.
71
As of December 31, 2024, our employee stock ownership association owned approximately 5.4% of our
common stock. In March 2024, we offered 28,436,860 of the 142,184,300 new shares of common stock to members of
the employee stock ownership association as part of our capital increase, and all such shares were subscribed by
members of our employee stock ownership association.
Item 6.E. Share Ownership
Common Stock
The persons who are currently our executive officers held, as a group, 106,630 shares of our common stock as
of April 17, 2025, the most recent date for which this information is available. Our executive officers acquired our
shares of common stock through our employee stock ownership association and pursuant to open market purchases on
the Korea Exchange. Due to Korean law restrictions, our registered executive officers, including our chief executive
officer and chief financial officer do not participate in the employee stock ownership association. Each of our directors
and executive officers beneficially owns less than one percent of our common stock on an individual basis.
In addition, our articles of incorporation provide for a stock option plan to aid retention of executives and key
staff and to provide an incentive to meet strategic objectives. All of the stock options we have previously granted have
expired and none are currently outstanding.
Item 6.F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation
Not applicable.
Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
Item 7.A. Major Shareholders
The following table sets forth information regarding beneficial ownership of our common stock by each
person or entity known to us as of March 31, 2025 to own beneficially more than 5% of our outstanding shares:
Beneficial Owner
Number of Shares
of Common Stock
Percentage
LG Electronics(1)
183,593,206
36.7%
National Pension Service
25,941,904
5.2%
Employee Stock Ownership Association
25,900,063
5.2%
(1)
In March 2024, as part of our ongoing efforts to improve our financial condition and liquidity, we issued 142,184,300 new shares of common stock
(including 1,038,078 new shares represented by 2,076,156 ADSs) at a subscription price of W9,090 per share (and US$3.450019 per ADS) pursuant to a
preemptive rights offering to our existing shareholders, including ADS holders, followed by a public offering in Korea with respect to the fractional
shares from the rights offering. Immediately following the completion of such offering, the number of issued and outstanding shares of our common
stock increased to 500,000,000. LG Electronics subscribed for 47,968,206 new shares of our common stock for a cash consideration of W436 billion
under such offering. As a result of its participation, following the completion of such offering, LG Electronics’ shareholding in us decreased from 37.9%
to 36.7%.
Other than as set forth above, no other person or entity known by us to be acting in concert, directly or
indirectly, jointly or severally, owned more than 5% or more of our outstanding common stock or exercised control or
could exercise control over us as of March 31, 2025. None of our major shareholders identified above has voting rights
different from those of our other shareholders.
Item 7.B. Related Party Transactions
We engage from time to time in a variety of transactions with related parties, including the sale of our
products to, and the purchase of raw materials and components from, such related parties. See Notes 8 and 29 of the
notes to our financial statements. In March 2023, we entered into a long-term borrowings agreement with LG
Electronics, our largest shareholder. See “— Long-Term Borrowings Agreement with LG Electronics.” In March
2024, LG Electronics subscribed for additional shares of our common stock in our capital increase pursuant to a
preemptive rights offering to existing shareholders. See “— Subscription to Our Common Stock by LG Electronics.”
We have conducted our transactions with related parties based on arm’s length negotiations taking into account such
considerations as we would in comparable transactions with a non-related party.
72
From time to time, we provide payment guarantees for the benefit of certain of our subsidiaries. For a
discussion of such payment guarantee obligations, please see “Item 5.B. Liquidity and Capital Resources.”
Transactions with Companies in the LG Group
Sales to LG Electronics
We sell display panels, primarily large-sized panels for televisions, notebook computers and desktop monitors
and small- and medium-sized panels for automotive screens and other applications, to LG Electronics and its
subsidiaries on a regular basis, as both an end-brand customer and as a system integrator for use in products they
assemble on a contract basis for other end-brand customers. Pricing and other principal terms of the sales to LG
Electronics are negotiated based on then-prevailing market terms and prices as adjusted for LG Electronics’
requirements such as volume and product specifications and our internal projections regarding market trends, which
are the same considerations that we take into account when negotiating pricing and principal terms of sales to our non-
affiliated end-brand customers.
Sales to LG Electronics and its subsidiaries, which include sales to LG Electronics as an end-brand customer
and system integrator, amounted to W3,767 billion (US$2,549 million), or 14.2% of our sales, in 2024.
Purchases from LG Electronics
We purchase equipment, photo masks, components and certain services, such as transportation, warehousing
and other related logistics services, from LG Electronics and its subsidiaries. Our purchases from LG Electronics and
its subsidiaries amounted to W500 billion (US$338 million), or 3.8% of our total purchases, in 2024.
Other Purchases
Under a master purchase agreement, we procure, on an “as-needed” basis, certain of the raw materials,
components and other materials necessary for our production process from other companies in the LG Group. Our
purchases of raw materials, such as polarizers, from LG Chem, an affiliate of LG Corp., amounted to W567 billion
(US$384 million), or 4.3% of our total purchases, in 2024.
Our total purchases, including purchases of materials, supplies and services, from companies in the LG
Group, excluding LG Electronics and LG Chem and their respective subsidiaries, amounted to W427 billion (US$289
million), or 3.3% of our total purchases, in 2024.
Intellectual Property Related Agreements with LG Corp. and LG Electronics
We have entered into successive trademark license agreements with LG Corp., the holding company of the
LG Group, for use of the “LG” name. Under the terms of the current agreement, we are required to make monthly
payments to LG Corp. in the aggregate amount per year of 0.2% of our sales after deducting advertising expenses. As
of April 17, 2025, we have made all monthly payments required to be made to LG Corp. in accordance with the terms
of the current agreement.
In addition, we benefit from certain licenses extended to us from license or cross-license agreements between
LG Electronics and third parties. Under the terms of the joint venture agreement establishing LG.Philips LCD Co.,
Ltd., LG Electronics had assigned most of its patents relating to the development, manufacture and sale of TFT-LCD
products to us and we had agreed to maintain joint ownership of those patents that were not assigned to us.
Long-Term Borrowings Agreement with LG Electronics
In March 2023, we entered into an agreement to obtain a long-term borrowing from LG Electronics, our
largest shareholder, in the aggregate amount of W1 trillion with an interest rate of 6.06% per year. We received W0.65
trillion of the principal amount of such borrowing on March 30, 2023 and the remaining W0.35 trillion on April 20,
2023. We are responsible only for interest payments during the first two years of the borrowing term, while the
principal amount is subject to repayment on a quarterly basis during the final year, until its maturity on March 30,
2026. We obtained such borrowing in order to strengthen the competitiveness of our OLED business as well as for
general corporate purposes.
73
Subscription to Our Common Stock by LG Electronics
In March 2024, LG Electronics subscribed for 47,968,206 new shares of our common stock for a cash
consideration of W436 billion in our capital increase pursuant to a preemptive rights offering to existing shareholders,
including ADS holders, followed by a public offering in Korea with respect to the fractional shares from the rights
offering. As a result of its participation, following the completion of such offering, LG Electronics’ shareholding in us
decreased from 37.9% to 36.7%. LG Electronics currently owns 36.7% of our voting stock. See “Item 7.A. Major
Shareholders.”
Transactions with Directors and Officers
Certain of our directors and executive officers also serve as executive officers of companies with which we do
business. None of our directors or executive officers has or had any interest in any of our business transactions that are
or were unusual in their nature or conditions or significant to our business.
Item 7.C. Interests of Experts and Counsel
Not applicable.
Item 8. FINANCIAL INFORMATION
Item 8.A. Consolidated Statements and Other Financial Information
See “Item 18. Financial Statements” and pages F-1 through F-95.
Legal Proceedings
We are involved from time to time in certain routine legal actions incidental to our business. However, except
for the ongoing proceedings described below, we are not currently involved in any material litigation or other
proceedings the outcome of which we believe might, individually or taken as a whole, have a material adverse effect
on our results of operations or financial condition. In addition, except as described below, we are not aware of any
other material pending or threatened litigation against us.
Antitrust and Others
In December 2006, LG Display received notices of investigation by the U.S. Department of Justice, the
European Commission, the Korea Fair Trade Commission and the Japan Fair Trade Commission with respect to
possible anti-competitive activities in the TFT-LCD industry. Subsequently, the Competition Bureau of Canada, the
Secretariat of Economic Law of Brazil, the Taiwan Fair Trade Commission, and the Federal Competition Commission
of Mexico announced investigations regarding the same. Between November 2008 and June 2014, each of such
investigations and subsequent legal proceedings brought by the relevant competition authorities was settled or
resolved, and we have paid fines of US$400 million pursuant to our November 2008 settlement agreement with the
U.S. Department of Justice, €210 million pursuant to a December 2010 decision by the European Commission and
R$33.9 million pursuant to an August 2014 settlement agreement with the Secretariat of Economic Law of Brazil.
After the commencement of the U.S. Department of Justice investigation, various class action complaints and
separate claims by direct and indirect purchasers of our products were filed against us and other TFT-LCD panel
manufacturers in the United States and Canada, alleging violations of respective antitrust and related laws. In addition,
from 2010 to 2012, the attorneys general of Arkansas, California, Florida, Illinois, Michigan, Mississippi, Missouri,
New York, Oklahoma, Oregon, South Carolina, Washington, West Virginia and Wisconsin filed complaints against us,
alleging similar antitrust violations. In June 2018, the attorney general of the Commonwealth of Puerto Rico filed a
complaint against us and other TFT-LCD panel manufacturers alleging unjust enrichment in connection with the
aforementioned U.S. Department of Justice investigation. Since then, we have reached settlements with each of the
plaintiff classes and separate plaintiffs, as well as with the aforementioned state attorneys general, with the exception
of the attorney general of the Commonwealth of Puerto Rico, which settlements were duly approved by the applicable
courts and, in the case of the state attorneys general actions, by their respective state governments. In October 2022,
the United States District Court for the District of Puerto Rico dismissed the case without prejudice for failure to
prosecute.
74
A number of claims alleging damages were filed against LG Display and other entities in the United Kingdom
as follow-on claims from the above-described European Commission’s decision in December 2010. We have since
reached settlements with each of the claimants, with the exception of a follow-on damages claim filed by Granville in
December 2016. In February 2024, the court rendered its judgment on such follow-on damages claim against the
defendants, including us. As of April 17, 2025, the amount for which we will be liable remains subject to further
determination by the court.
In December 2013, a class action complaint was filed by Hatzlacha, a consumer organization, on behalf of
Israeli consumers against LG Display and other defendants in the Central District in Israel. As of April 17, 2025, we
have not been served with the complaint from Hatzlacha.
In each of the foregoing matters that are ongoing, we are continually evaluating the merits of the respective
claims and vigorously defending ourselves. Irrespective of the validity or the successful assertion of the claims
described above, we may incur significant costs with respect to litigating or settling any or all of the asserted claims.
While we continue to vigorously defend the various ongoing proceedings that we are involved in, it is possible that one
or more proceedings may result in cash outflow to settle or resolve these claims, which may have an adverse effect on
our operating results or financial condition.
Dividends
Annual dividends must be approved by the shareholders at the annual general meeting of shareholders and
interim dividends must be approved by the board of directors. Cash dividends may be paid out of retained earnings that
have not been appropriated to statutory reserves.
At our annual general meeting of shareholders that was held on March 23, 2022, we declared a cash dividend
of W650 per share of common stock, amounting to a total cash dividend of W232.6 billion to our shareholders of
record as of December 31, 2021. At each of our annual general meeting of shareholders that was held on March 21,
2023, March 22, 2024, and March 20, 2025, we did not declare any cash dividend to our shareholders.
Item 8.B. Significant Changes
Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since
the date of our audited consolidated financial statements included in this annual report.
Item 9. THE OFFER AND LISTING
Item 9.A. Offer and Listing Details.
Principal Trading Market
The principal trading market for our common stock is the Korea Exchange. Our common stock, which is in
registered form and has a par value of W5,000 per share of common stock, has been listed on the Korea Exchange
since July 23, 2004 under the identifying code 034220. As of December 31, 2024, 500,000,000 shares of common
stock were outstanding. Our common stock is also listed on the New York Stock Exchange in the form of ADSs. The
ADSs have been issued by Citibank as ADS depositary and have been listed on the New York Stock Exchange under
the ticker symbol “LPL” since July 22, 2004. One ADS represents one-half of one share of common stock. As of
December 31, 2024, 20,944,314 ADSs were outstanding.
In March 2024, as part of our ongoing efforts to improve our financial condition and liquidity, we issued
142,184,300 new shares of common stock (including 1,038,078 new shares represented by 2,076,156 ADSs) at a
subscription price of W9,090 per share (and US$3.450019 per ADS) pursuant to a preemptive rights offering to our
existing shareholders, including ADS holders, followed by a public offering in Korea with respect to the fractional
shares from the rights offering.
Item 9.B. Plan of Distribution
Not applicable.
75
Item 9.C. Markets
See “Item 9.A. Offering and Listing Details.”
Item 9.D. Selling Shareholders
Not applicable.
Item 9.E. Dilution
Not applicable.
Item 9.F. Expenses of the Issue
Not applicable.
Item 10. ADDITIONAL INFORMATION
Item 10.A. Share Capital
Not applicable.
Item 10.B. Memorandum and Articles of Association
Description of Capital Stock
This section provides information relating to our capital stock, including brief summaries of material
provisions of our current articles of incorporation, the Financial Investment Services and Capital Markets Act and the
Korean Commercial Code. The following summaries are subject to, and are qualified in their entirety by reference to,
our articles of incorporation and the applicable provisions of the Financial Investment Services and Capital Markets
Act and the Korean Commercial Code.
General
Under our articles of incorporation, which was last amended in March 2025, the total number of shares
authorized to be issued by us is 1,000,000,000 shares, which consists of shares of common stock and non-voting
preferred stock, both with par value of W5,000 per share. We are authorized to issue preferred stock of up to one-
fourth of the total number of outstanding shares. As of December 31, 2024, 500,000,000 shares of common stock were
issued. All of the issued and outstanding shares are fully-paid and non-assessable and are in registered form.
In March 2024, as part of our ongoing efforts to improve our financial condition and liquidity, we issued
142,184,300 new shares of common stock (including 1,038,078 new shares represented by 2,076,156 ADSs) at a
subscription price of W9,090 per share (and US$3.450019 per ADS) pursuant to a preemptive rights offering to our
existing shareholders, including ADS holders, followed by a public offering in Korea with respect to the fractional
shares from the rights offering. Immediately following the completion of such offering, the number of outstanding
shares of our common stock and ADSs increased to 500,000,000 and 15,741,012 (representing 7,870,506 shares of our
common stock), respectively.
Our articles of incorporation reflect the adoption of the electronic securities system that launched in
September 2019, pursuant to the Act on Electronic Registration of Stocks, Bonds, Etc. (the “Electronic Registration
Act”). Accordingly, following the launch of such system, in lieu of issuing share certificates or certificates of
preemptive rights, we electronically register the shares that would otherwise be indicated on certificates of preemptive
rights on an electronic registry of an electronic registration institution.
Dividends
We distribute dividends to our shareholders in proportion to the number of shares owned by each shareholder.
The shares represented by the ADSs have the same dividend rights as other outstanding shares.
Holders of preferred shares are entitled to receive dividends in priority to the holders of common stock. The
amount of dividends for preferred shares is determined by our board of directors within a range of 1% to 10% of par
76
value at the time the shares are issued, provided that if the dividend amount on the shares of common stock exceeds
that on the preferred shares, holders of preferred shares will also participate in the distribution of the excess dividend
amount in the same proportion as holders of common stock. If the amount available for dividends is less than the
aggregate amount of such minimum dividend, the holders of preferred shares will be entitled to receive the
accumulated unpaid dividends in priority to the holders of common stock from the dividends payable in respect of the
next fiscal year.
We declare dividends annually at the annual general meeting of shareholders which is held within three
months after the end of the fiscal year. We pay the annual dividend shortly after the annual general meeting to the
shareholders of record as of the date determined and publicly notified two weeks in advance by the board of directors.
We may distribute the annual dividend in cash or in shares. However, a dividend of shares must be distributed at par
value. If the market price of the shares is less than their par value, dividends in shares may not exceed one-half of the
annual dividend. We have no obligation to pay any annual dividend unclaimed for five years from the payment date.
Under the Korean Commercial Code, we may pay an annual dividend only out of the excess of our net assets,
on a non-consolidated basis, over the sum of (1) our stated capital and (2) the total amount of our capital surplus
reserve and legal reserve accumulated up to the end of the relevant dividend period. We may not pay an annual
dividend unless we have set aside a legal reserve in an amount equal to at least 10% of the cash portion of the annual
dividend or unless we have accumulated a legal reserve of not less than one-half of our stated capital. We may not use
legal reserves to pay cash dividends but may transfer amounts from legal reserves to capital stock or use legal reserves
to reduce an accumulated deficit.
Also, we may pay an interim dividend in accordance with a resolution of the board of directors to our
shareholders of record as of the date determined and publicly notified two weeks in advance by the board of directors.
Distribution of Free Shares
In addition to paying dividends in shares out of our retained or current earnings, we may also distribute to our
shareholders an amount transferred from our capital surplus or legal reserve to our stated capital in the form of free
shares. Free shares are shares newly issued to existing shareholders without consideration, much like stock dividends,
except that in the case of free shares a portion of the reserves, as opposed to earnings, is transferred to capital. We must
distribute such free shares to all of our shareholders in proportion to their existing shareholdings. We may distribute
free shares when we determine that our capital surplus or legal reserves are too large relative to our paid-in capital.
Preemptive Rights and Issuance of Additional Shares
We may issue authorized but unissued shares at the times and, unless otherwise provided in the Korean
Commercial Code, on the terms our board of directors may determine. All of our shareholders are generally entitled to
subscribe for any newly issued shares in proportion to their existing shareholdings. We must offer new shares on
uniform terms to all shareholders who have preemptive rights and are listed on our shareholders’ register as of the
relevant record date. However, under the Korean Commercial Code, we may vary the specific terms of these
preemptive rights for different classes of shares without shareholder approval. To the extent that such different terms
result in placing any particular class of shareholders at a disadvantage relative to other classes, a special resolution by
that disadvantaged class of shareholders is necessary.
We must give public notice of the preemptive rights regarding new shares and their transferability at least two
weeks before the relevant record date. Our board of directors may determine how to distribute shares for which
preemptive rights have not been exercised or where fractions of shares occur.
Under our articles of incorporation, we may issue new shares pursuant to a board resolution to persons other
than existing shareholders, who however will not have preemptive rights, if the new shares are, among others:
•
publicly offered pursuant to the Financial Investment Services and Capital Markets Act;
•
issued to members of our employee stock ownership association;
•
represented by depositary receipts;
•
issued upon exercise of stock options granted to our officers and employees;
•
issued to corporations, institutional investors or domestic or overseas financial institutions to achieve our
operational objectives; or
77
•
issued for the purpose of drawing foreign investment when we deem it necessary for our business needs;
provided that the aggregate number of shares so issued (i) to corporations, institutional investors or domestic
or overseas financial institutions to achieve our operational objectives or (ii) for the purpose of drawing foreign
investment when we deem it necessary for our business needs do not exceed 30% of the total number of issued and
outstanding shares.
In addition, we may issue convertible bonds or bonds with warrants, respectively, up to an aggregate face
amount of W2.5 trillion to persons other than existing shareholders. The classes of shares to be issued upon conversion
of bonds or exercise of warrants shall be common stock. In addition, since September 2019, pursuant to the Electronic
Registration Act, in lieu of issuing bond or warrant certificates, we electronically register the bonds and warrant rights
that would otherwise be indicated on warrant certificates on an electronic registry of an electronic registration
institution.
Members of our employee stock ownership association, whether or not they are our shareholders, generally
have a preemptive right to subscribe for up to 20% of the shares publicly offered pursuant to the Financial Investment
Services and Capital Markets Act. As of December 31, 2024, approximately 5.4% of our common stock was held by
our employee stock ownership association. In March 2024, we offered 28,436,860 of the 142,184,300 new shares of
common stock to members of the employee stock ownership association as part of our capital increase, and all such
shares were subscribed by members of our employee stock ownership association.
General Meeting of Shareholders
We hold the annual general meeting of shareholders within three months after the end of each fiscal year.
Subject to a board resolution or court approval, we may hold an extraordinary general meeting of shareholders:
•
as necessary;
•
at the request of holders of an aggregate of 3% or more of our outstanding shares;
•
at the request of shareholders holding an aggregate of 1.5% or more of our outstanding shares for at least
six consecutive months; or
•
at the request of our audit committee.
Holders of preferred shares may request a general meeting of shareholders only after the preferred shares
become entitled to vote or are enfranchised, as described under “—Voting Rights” below.
We must give shareholders written notice setting out the date, place and agenda of the meeting at least two
weeks before the date of the general meeting of shareholders. However, for holders of less than 1% of the total number
of issued and outstanding voting shares, we may provide such notice by public notice, either to be made at least twice
in Maeil Business Newspaper and The Chosun Ilbo, both daily newspapers of general circulation published in Seoul,
or through the electronic disclosure system operated by the Financial Supervisory Service of Korea or the Korea
Exchange.
Shareholders not on the shareholders’ register as of the record date are not entitled to receive notice of the
general meeting of shareholders, attend or vote at the meeting. Holders of non-voting preferred shares, unless
enfranchised, are not entitled to receive notice of general meetings of shareholders.
The place of our general meetings of shareholders is decided by our board of directors, which can be held in
our head office, our Paju Display Cluster or any other place as designated by our board of directors.
Directors
Under the Korean Commercial Code and our articles of incorporation, any director wishing to enter into a
transaction with us in his or her capacity is required to obtain prior approval from the board of directors, and any
director with an interest in the transaction may not vote at the meeting of the board of directors to approve the
transaction.
Voting Rights
78
Holders of our common stock are entitled to one vote for each share of common stock, except that voting
rights may not be exercised with respect to shares of common stock held by us or by a corporate shareholder in which
we own, directly or indirectly, more than 10% of its voting stock. The Korean Commercial Code permits cumulative
voting, under which voting method each shareholder would have multiple voting rights corresponding to the number
of directors to be appointed in the voting and may exercise all voting rights cumulatively to elect one director.
However, our articles of incorporation prohibit cumulative voting.
According to our current articles of incorporation, our shareholders may adopt resolutions at a general
meeting by an affirmative majority vote of the voting shares present or represented at the meeting, where the
affirmative votes also represent at least one-fourth of our total voting shares then issued and outstanding. However,
under the Korean Commercial Code and our articles of incorporation, the following matters, among others, require
approval by the holders of at least two-thirds of the shares present or represented at a meeting, where the affirmative
votes also represent at least one-third of our total voting shares then issued and outstanding:
•
amending our articles of incorporation;
•
removing a director;
•
effecting any dissolution, merger or consolidation of us;
•
transferring the whole or any significant part of our business;
•
effecting our acquisition of all of the business of any other company;
•
effecting our acquisition of a part of the business of any other company that has a material effect on our
business; or
•
issuing any new shares at a price lower than their par value.
In general, holders of preferred shares are not entitled to vote on any resolution or receive notice of any
general meeting of shareholders. However, in the case of amendments to our articles of incorporation, any merger or
consolidation involving us, capital reductions or in certain other cases in which the rights or interests of the preferred
shares are affected, approval of the holders of preferred shares is required. We may obtain such approval by a
resolution of holders of at least two-thirds of the preferred shares present or represented at a class meeting of the
holders of preferred shares, where the affirmative votes also represent at least one-third of our total issued and
outstanding preferred shares. In addition, if we are unable to pay dividends on preferred shares as provided in our
articles of incorporation, the holders of preferred shares will become enfranchised and will be entitled to exercise
voting rights until those dividends are paid. The holders of enfranchised preferred shares have the same rights as
holders of common stock to request, receive notice of, attend and vote at a general meeting of shareholders.
Shareholders may exercise their voting rights by proxy.
Holders of ADRs exercise their voting rights through the ADR depositary, an agent of which is the record
holder of the underlying shares. Subject to the provisions of the deposit agreement, ADR holders are entitled to
instruct the ADR depositary how to vote the shares underlying their ADSs.
Rights of Dissenting Shareholders
In some limited circumstances, including the transfer of all or any significant part of our business and our
merger or consolidation with another company, dissenting shareholders have the right to require us to purchase their
shares. To exercise this right, shareholders must submit to us a written notice of their intention to dissent before the
general meeting of shareholders. Within 20 days after the relevant resolution is passed at such meeting, the dissenting
shareholders must make a request to us in writing to purchase their shares. We are obligated to purchase the shares of
dissenting shareholders no later than one month after the end of such 20-day period. The purchase price for the shares
is required to be determined through negotiation between the dissenting shareholders and us. If we cannot agree on a
price through negotiation, the purchase price will be the average of (1) the weighted average of the daily closing prices
of shares on the Korea Exchange for the two-month period before the date of the adoption of the relevant board
resolution, (2) the weighted average of the daily closing price of shares on the Korea Exchange for the one-month
period before the date of the adoption of the relevant board resolution and (3) the weighted average of the daily closing
price of shares on the Korea Exchange for the one-week period before the date of the adoption of the relevant board
resolution. If we or the dissenting shareholders that had requested the purchase of their shares do not accept the
purchase price, we or the dissenting shareholders may request a court to determine the purchase price. Holders of
79
ADSs will not be able to exercise dissenter’s rights unless they have withdrawn the underlying common stock and
become our direct shareholders.
Register of Shareholders and Record Dates
Our transfer agent, Korea Securities Depository, maintains the register of our shareholders at its office in
Seoul, Korea. It will register transfers of shares on the register of shareholders on presentation of the share certificates.
For the purpose of determining the shareholders entitled to annual dividends and to certain other rights
pertaining to the shares, we may, on at least two weeks’ public notice, set a record date.
Business Report
At least one week before the annual general meeting of shareholders, we must make our business report and
audited consolidated Korean IFRS financial statements available for inspection at our principal office and at all of our
branch offices. In addition, copies of business reports, the audited consolidated Korean IFRS financial statements and
any resolutions adopted at the general meeting of shareholders will be available to our shareholders.
Under the Financial Investment Services and Capital Markets Act, we must file with the Financial Services
Commission and the Korea Exchange (1) a yearly report (including audited non-consolidated financial statements and
audited consolidated financial statements) within 90 days after the end of our fiscal year and (2) interim reports with
respect to the three-month period, six-month period and nine-month period from the beginning of each fiscal year
within 45 calendar days following the end of each such period. Copies of these reports will be available for public
inspection at the Financial Services Commission and the Korea Exchange.
Transfer of Shares
Under the Korean Commercial Code, the transfer of shares is effected by delivery of share certificates.
However, to assert shareholders’ rights against us, the transferee must have his name and address registered on our
register of shareholders. For this purpose, a shareholder is required to file his name, address and seal with us. A non-
Korean shareholder may file a specimen signature in place of a seal, unless he is a citizen of a country with a sealing
system similar to that of Korea. In addition, a non-resident shareholder must appoint an agent authorized to receive
notices on his behalf in Korea and file a mailing address in Korea. The above requirements do not apply to the holders
of ADSs.
However, the Electronic Registration Act requires listed securities to be automatically converted into
electronic securities as of the business day immediately preceding the effective date of the Electronic Registration
Act. The Electronic Registration Act also provides that, with respect to the transfer of electronically registered shares,
the effect of transfer will occur upon the completion of the electronic registration of such transfer, and therefore, no
entry of change will be required.
Under current Korean regulations, the Korea Securities Depository, foreign exchange banks (including
domestic branches of foreign banks), financial investment companies with a dealing, brokerage or collective
investment license and internationally recognized custodians may act as agents and provide related services for foreign
shareholders. Certain foreign exchange controls and securities regulations apply to the transfer of shares by non-
residents or non-Koreans. See “Item 10.D. Exchange Controls.”
Acquisition of Shares by Us
Under the Korean Commercial Code, we may acquire our own shares pursuant to a resolution adopted at a
general meeting of shareholders through either (i) purchases on a stock exchange or (ii) with respect to shares other
than any redeemable shares as set forth in Article 345, Paragraph (1) of the Korean Commercial Code, purchases from
each shareholder in proportion to such shareholder’s existing shareholding ratio through the methods set forth in the
Presidential Decree, provided that the aggregate purchase price does not exceed the amount of our profit that may be
distributed as dividends in respect of the immediately preceding fiscal year.
In addition, pursuant to the Financial Investment Services and Capital Markets Act, we may acquire shares
through purchases on the Korea Exchange or through a tender offer. We may also acquire interests in our own shares
through agreements with trust companies or retrieve our own shares from a trust company upon termination of the trust
80
agreement. The aggregate purchase price for shares purchased through such means may not exceed the total amount
available for distribution of dividends at the end of the preceding fiscal year, subject to certain procedural
requirements.
Liquidation Rights
In the event of our liquidation, after payment of all debts, liquidation expenses and taxes, our remaining assets
will be distributed among shareholders in proportion to their shareholdings. Holders of preferred shares have no
preference in liquidation.
Item 10.C. Material Contracts
We have not entered into any material contracts during the two years immediately preceding the date of this
annual report, other than in the ordinary course of our business. For information regarding our agreements and
transactions with certain related parties, see “Item 7.B. Related Party Transactions.” For descriptions of certain
agreements related to our capital commitments and obligations and certain agreements related to our joint ventures,
which we believe were not material to our results of operations and financial condition in the periods in which such
agreements were entered, see “Item 5.B. Liquidity and Capital Resources” and “Item 4.B. Business Overview—Joint
Ventures”, respectively.
Item 10.D. Exchange Controls
The Foreign Exchange Transaction Act of Korea and the Presidential Decree and regulations under that Act
and Decree, which we refer to collectively as the Foreign Exchange Transaction Laws, regulate investments in Korean
securities by non-residents and issuances of securities outside Korea by Korean companies. Non-residents may invest
in Korean securities pursuant to the Foreign Exchange Transaction Laws. The Financial Services Commission has also
adopted, pursuant to its authority under the Financial Investment Services and Capital Markets Act, regulations that
restrict investments by foreigners in Korean securities and regulate issuances of securities outside Korea by Korean
companies.
Subject to certain limitations, the Ministry of Economy and Finance has the authority to take the following
actions under the Foreign Exchange Transaction Laws:
•
if the Korean government deems it necessary on account of war, armed conflict, natural disaster or grave
and sudden and significant changes in domestic or foreign economic circumstances or similar events or
circumstances, the Ministry of Economy and Finance may temporarily suspend performance under any or
all foreign exchange transactions, in whole or in part, to which the Foreign Exchange Transaction Laws
apply (including suspension of payment and receipt of foreign exchange), impose an obligation to
deposit, safe-keep or sell any means of payment to The Bank of Korea or certain other governmental
agencies, foreign exchange equalization funds or financial institutions, or require resident creditors to
collect and recover debts owed by non-resident debtors and to send such amounts to the creditors’
accounts in Korea; and
•
if the Korean government concludes that the international balance of payments and international financial
markets are experiencing or are likely to experience significant disruption or that the movement of capital
between Korea and other countries is likely to adversely affect the Korean Won, exchange rates or other
macroeconomic policies, the Ministry of Economy and Finance may take action to require any person
who intends to effect a capital transaction to obtain permission or to require any person who effects a
capital transaction to deposit a portion of the means of payment acquired in such transactions with The
Bank of Korea, foreign exchange equalization funds or financial institutions.
Government Review of Issuance of ADSs
In order for us to issue ADSs outside Korea, we are required to submit a report to the Ministry of Economy
and Finance or our designated foreign exchange bank (depending on the aggregate issue amount) with respect to the
issuance of the ADSs. No further governmental approval is necessary for the offering and issuance of the ADSs.
81
Under current Korean laws and regulations and the terms of the deposit agreement, the depositary is required
to obtain our consent for the number of shares of common stock to be deposited in any given proposed deposit that
exceeds the difference between:
(1) the aggregate number of shares of our common stock deposited by us for the issuance of our ADSs
(including deposits in connection with the initial issuance and all subsequent offerings of our ADSs and
stock dividends or other distributions related to these ADSs); and
(2) the number of shares of our common stock on deposit with the depositary at the time of such proposed
deposit.
We can give no assurance that we would, subject to governmental authorization, grant our consent, if our
consent is required. Therefore, a holder of ADRs who surrenders ADRs and withdraws shares may not be permitted
subsequently to deposit those shares and obtain ADRs.
Reporting Requirements for Holders of Substantial Interests
Under the Financial Investment Services and Capital Markets Act, any person whose direct or beneficial
ownership of our common stock with voting rights, whether in the form of shares of common stock or ADSs,
certificates representing the rights to subscribe for shares and equity-related debt securities including convertible
bonds, bonds with warrants and exchangeable bonds, which we refer to collectively as equity securities, together with
the equity securities directly or beneficially owned by certain related persons or by any person acting in concert with
the person, accounts for 5% or more of our total outstanding equity securities, is required to report the status and
purpose (in terms of whether the purpose of the shareholding is to influence corporate management of the issuer, to
implement active shareholder engagement without an intent to influence corporate management or to exercise voting
and other rights that are irrespective of the shareholding ratio) of the holdings to the Financial Services Commission
and the Korea Exchange within five business days after reaching the 5% ownership interest. In addition, any change (i)
in the ownership interest subsequent to the report that equals or exceeds 1% of the total outstanding equity securities
from the previous report or (ii) in the shareholding purpose is required to be reported to the Financial Services
Commission and the Korea Exchange within five business days from the date of the change (or, if the purpose of
shareholding is to implement active shareholder engagement without an intent to influence corporate management,
within ten days from the date of the change, or if the purpose is to exercise voting and other rights that are irrespective
of the shareholding ratio, within ten days of the end of the month in which the change occurred).
Violation of these reporting requirements may subject a person to criminal sanctions such as fines or
imprisonment and/or prohibition on the exercise of voting rights with respect to the ownership of equity securities
exceeding the reported number of shares. Furthermore, the Financial Services Commission may order the disposal of
the unreported equity securities.
When a person’s shareholding ratio reaches or exceeds ten percent or more of the company’s issued and
outstanding shares with voting rights, the person must file a report to the Securities and Futures Commission and to the
Korea Exchange within five business days following the date on which the person reached such shareholding limit. In
addition, such person must file a report to the Securities and Futures Commission and to the Korea Exchange
regarding any subsequent change in his/her shareholding. These subsequent reports on changes in shareholding are
required within five business days after the relevant change has occurred. Violation of these reporting requirements
may subject a person to criminal sanctions such as fines or imprisonment.
Restrictions Applicable to ADSs
No Korean governmental approval is necessary for the sale and purchase of our ADSs in the secondary
market outside Korea or for the withdrawal of shares of our common stock underlying the ADSs and the delivery
inside Korea of shares in connection with the withdrawal. The acquisition of the shares by a foreigner must be
immediately reported to the governor of the Financial Services Commission, either by the foreigner or by his standing
proxy in Korea.
Persons who have acquired shares of our common stock as a result of the withdrawal of shares underlying our
ADSs may exercise their preemptive rights for new shares, participate in free distributions and receive dividends on
shares without any further Korean governmental approval.
82
Restrictions Applicable to Shares
As a result of amendments to the Foreign Exchange Transaction Laws and Financial Services Commission
regulations, adopted in connection with the stock market opening from January 1992, which we refer to collectively as
the Investment Rules, after that date, foreigners may invest, with limited exceptions and subject to procedural
requirements, in shares of all Korean companies listed on the KRX KOSPI Market or the KRX KOSDAQ Market
unless prohibited by specific laws. Foreign investors may trade shares listed on the KRX KOSPI Market or the KRX
KOSDAQ Market only through the KRX KOSPI Market or the KRX KOSDAQ Market, except in limited
circumstances, including:
•
odd-lot trading of shares;
•
acquisition of shares, which we refer to as converted shares, by exercise of warrants, conversion rights or
exchange rights under bonds with warrants, convertible bonds or exchangeable bonds or withdrawal
rights under depositary receipts issued outside of Korea by a Korean company;
•
acquisition of shares as a result of inheritance, donation, bequest or exercise of shareholders’ rights,
including preemptive rights or rights to participate in free distributions and receive dividends;
•
subject to certain exceptions, over-the-counter transactions between foreigners of a class of shares for
which the ceiling on aggregate acquisition by foreigners, as explained below, has been reached or
exceeded;
•
shares acquired by way of direct investment and/or the disposal of such shares by the investor;
•
the disposal of shares pursuant to the exercise of appraisal rights of dissenting shareholders;
•
the disposal of shares in connection with a tender offer;
•
the acquisition of shares by a foreign depositary in connection with the issuance of depositary receipts;
•
the acquisition and disposal of shares through an overseas stock exchange market if such shares are
simultaneously listed on the KRX KOSPI Market or the KRX KOSDAQ Market and such overseas stock
exchange; and
•
arm’s-length transactions between foreigners, if all of such foreigners belong to the investment group
managed by the same person.
For over-the-counter transactions of shares between foreigners outside the KRX KOSPI Market or the KRX
KOSDAQ Market for shares with respect to which the limit on aggregate foreign ownership has been reached or
exceeded, a financial investment company with a brokerage license in Korea must act as an intermediary. Odd-lot
trading of shares outside the KRX KOSPI Market or the KRX KOSDAQ Market must involve a financial investment
company with a dealing license in Korea as the other party. Foreign investors are prohibited from engaging in margin
transactions by borrowing shares from financial investment companies with respect to shares that are subject to a
foreign ownership limit.
The foreign investor registration system, which had been in place since 1992, previously required a foreign
investor who wished to invest in shares on the KRX KOSPI Market or the KRX KOSDAQ Market (including
converted shares and shares being issued for initial listing on the KRX KOSPI Market or the KRX KOSDAQ Market)
to register its identity with the Financial Supervisory Service prior to making any such investment unless it has
previously registered. However, on June 5, 2023, the Korean government approved a bill to revise the Presidential
Decree of the Financial Investment Services and Capital Markets Act to abolish such foreign investors’ registration
requirements, and such bill came into effect on December 14, 2023.
Pursuant to such revisions to the Presidential Decree of the Financial Investment Services and Capital
Markets Act, foreign investors are able to open investment accounts at securities firms without having to go through a
prior registration process with the Financial Supervisory Service. Foreign corporate entities can use their legal entity
identifiers, and foreign individuals can use their passport numbers, to open investment accounts in Korea. Foreign
investors who have already obtained investment registration certificates in the past can continue to use their investor
registration number to minimize the inconvenience that may be caused by the new system.
A foreign investor’s acquisition or sale of shares outside the KRX KOSPI Market or the KRX KOSDAQ
Market, in principle, has to be reported by the foreign investor or his standing proxy to the governor of the Financial
Supervisory Service prior to such acquisition or sale; provided, however, post-transaction reporting obligations apply
83
to such acquisition or sale of shares where the need for a prior report is deemed to be low, including in the cases of a
tender offer, odd-lot trading of shares or trades of a class of shares for which the aggregate foreign ownership limit has
been reached or exceeded. Exceptions permitting post-transaction reporting have been expanded to include dividend in
kind or in-kind delivery of shares upon the liquidation of foreign funds, among others, following related amendments
to the Financial Investment Business Regulations announced by the Financial Services Commission, which came into
effect on December 14, 2023.
A foreign investor may appoint a standing proxy from among the Korea Securities Depository, foreign
exchange banks (including domestic branches of foreign banks), financial investment companies with a dealing,
brokerage or collective investment license and internationally recognized custodians which will act as a standing proxy
to exercise shareholders’ rights or perform any matters related to the foregoing activities if the foreign investor does
not perform these activities itself. Generally, a foreign investor may not permit any person, other than its standing
proxy, to exercise rights relating to its shares or perform any tasks related thereto on its behalf. However, a foreign
investor may be exempted from complying with these standing proxy rules with the approval of the governor of the
Financial Supervisory Service in cases deemed inevitable by reason of conflict between the laws of Korea and the
home country of the foreign investor.
Certificates evidencing shares of Korean companies must be kept in custody with an eligible custodian in
Korea. Only the Korea Securities Depository, foreign exchange banks (including domestic branches of foreign banks),
financial investment companies with a dealing, brokerage or collective investment license and internationally
recognized custodians are eligible to act as a custodian of shares for a non-resident or foreign investor; provided,
however, that a foreign investor may have the certificate evidencing shares released from such custody when it is
necessary to exercise its rights to such shares or to inspect and confirm the presence of the certificate(s) of such shares.
A foreign investor must ensure that its custodian deposits its shares with the Korea Securities Depository. However, a
foreign investor may be exempted from complying with this deposit requirement with the approval of the governor of
the Financial Supervisory Service in circumstances where compliance with that requirement is made impracticable,
including cases where compliance would contravene the laws of the home country of such foreign investor.
Under the Investment Rules, with certain exceptions, foreign investors may acquire shares of a Korean
company without being subject to any foreign investment ceiling. As one such exception, unless otherwise stated in
their articles of incorporation, designated public corporations are subject to a 40% ceiling on the acquisition of shares
by foreigners in the aggregate. Furthermore, an investment by a foreign investor in 10% or more of the outstanding
shares with voting rights of a Korean company is defined as a foreign direct investment under the Foreign Investment
Promotion Act of Korea. Generally, a foreign direct investment must be reported to the foreign exchange bank
designated by the Ministry of Trade, Industry & Energy or the Korea Trade-Investment Promotion Agency prior to
such investment (within 60 days from the date of such investment, if the company is listed on the Korea Exchange).
The acquisition of shares of a Korean company by a foreign investor may also be subject to certain foreign or other
shareholding restrictions in the event that the restrictions are prescribed in a specific law that regulates the business of
the Korean company.
Under the Foreign Exchange Transaction Laws, a foreign investor who intends to acquire shares must
designate a foreign exchange bank at which he must open a foreign currency account and a Korean Won account
exclusively for stock investments. No approval is required for remittance into Korea and deposit of foreign currency
funds in the foreign currency account. Foreign currency funds may be transferred from the foreign currency account at
the time required to place a deposit for, or settle the purchase price of, a stock purchase transaction to a Korean Won
account opened at a financial investment company with a securities dealing or brokerage license. Funds in the foreign
currency account may be remitted abroad without any Korean governmental approval.
Dividends on shares of Korean companies are paid in Korean Won. No Korean governmental approval is
required for foreign investors to receive dividends on, or the Korean Won proceeds of the sale of, any shares to be
paid, received and retained in Korea. Dividends paid on, and the Korean Won proceeds of the sale of, any shares held
by a non-resident of Korea must be deposited either in a Korean Won account with the investor’s financial investment
company or in his Korean Won account. Funds in the investor’s Korean Won account may be transferred to his foreign
currency account or withdrawn for local living expenses, provided that any withdrawal of local living expenses in
excess of a certain amount is reported to the Financial Supervisory Service by the foreign exchange bank at which the
Won account is maintained. Funds in the Korean Won account may also be used for future investment in shares or for
payment of the subscription price of new shares obtained through the exercise of preemptive rights.
84
Financial investment companies with a securities dealing, brokerage or collective investment license are
allowed to open foreign currency accounts with foreign exchange banks exclusively for accommodating foreign
investors’ stock investments in Korea. Through these accounts, such financial investment companies may enter into
foreign exchange transactions on a limited basis, such as conversion of foreign currency funds and Korean Won funds,
either as a counterparty to or on behalf of foreign investors, without the investors having to open their own accounts
with foreign exchange banks.
Item 10.E. Taxation
The following summary is based upon the tax laws of the United States and the Republic of Korea as in effect
on the date of this annual report, and is subject to any change in U.S. or Korean law that may come into effect after
such date. Investors in the shares of common stock or ADSs are advised to consult their own tax advisers as to the
United States, Korean or other tax consequences of the purchase, ownership and disposition of such securities,
including the effect of any national, state or local tax laws.
Korean Taxation
The following summary of Korean tax considerations applies to you so long as you are not:
•
a resident of Korea;
•
a corporation having its head office, principal place of business or place of effective management in
Korea (i.e., a Korean corporation); or
•
engaged in a trade or business in Korea through a permanent establishment or a fixed base to which the
relevant income is attributable or with which the relevant income is effectively connected.
Taxation of Dividends on Shares of Common Stock or ADSs
We will deduct Korean withholding tax from dividends (whether in cash or in shares) paid to you at a rate of
22% (including local income surtax). If you are a beneficial owner of the dividends and a qualified resident in a
country that has entered into a tax treaty with Korea, you may qualify for a reduced rate of Korean withholding tax.
See “—Tax Treaties” below for a discussion of treaty benefits. If we distribute to you free shares representing a
transfer of certain capital reserves or certain asset revaluation reserves into paid-in capital, that distribution may be
subject to Korean withholding tax.
Taxation of Capital Gains from Transfer of Shares of Common Stock or ADSs
As a general rule, capital gains earned by non-residents upon transfer of shares of our common stock or ADSs
are subject to Korean withholding tax at the lower of (1) 11% (including local income surtax) of the gross proceeds
realized or (2) subject to the production of satisfactory evidence of acquisition costs and certain direct transaction costs
of the shares or ADSs, 22% (including local income surtax) of the net realized gain, unless exempt from Korean
income taxation under the applicable Korean tax treaty with the non-resident’s country of tax residence. See “—Tax
Treaties” below for a discussion on treaty benefits. Even if you do not qualify for an exemption under a tax treaty, you
will not be subject to the foregoing withholding tax on capital gains if you qualify under the relevant Korean domestic
tax law exemptions discussed in the following paragraphs.
With respect to shares of our common stock, you will not be subject to Korean income taxation on capital
gains realized upon the transfer of such shares through the Korea Exchange if you (1) have no permanent
establishment in Korea and (2) did not own or have not owned (together with any shares owned by any entity with
which you have a certain special relationship and possibly including the shares represented by the ADSs) 25% or more
of our total issued and outstanding shares at any time during the calendar year in which the sale occurs and during the
five calendar years prior to the calendar year in which the sale occurs.
Under the Korean tax laws for capital gains recognized or to be recognized from disposition of ADSs, ADSs
are viewed as shares of stock for capital gains tax purposes. Accordingly, capital gains from sale or disposition of
ADSs are taxed (if taxable) as if such gains are from sale or disposition of shares of our common stock. It should be
noted that (i) capital gains earned by you (regardless of whether you have a permanent establishment in Korea) from a
transfer of ADSs outside Korea will generally be exempt from Korean income taxation by virtue of the Special Tax
Treatment Control Law of Korea, or the STTCL, provided that the issuance of ADSs is deemed to be an overseas
issuance under the STTCL, but (ii) in the case where an owner of the underlying shares of stock transfers ADSs after
85
conversion of the underlying shares into ADSs, the exemption under the STTCL described in (i) will not apply. In the
case where an owner of the underlying shares of stock transfers the ADSs after conversion of the underlying shares of
stock into ADSs, such person is obligated to file income tax returns and pay tax unless a purchaser or a financial
investment company with a brokerage license, as applicable, withholds and pays the tax on capital gains derived from
transfer of ADSs, as discussed below.
If you are subject to tax on capital gains with respect to the sale of ADSs, or of shares of common stock
which you acquired as a result of a withdrawal, the purchaser or, in the case of the sale of shares of common stock on
the Korea Exchange or through a financial investment company with a brokerage license in Korea, the financial
investment company, is required to withhold Korean tax from the sales price in an amount equal to the lower of (i)
11% (including local income surtax) of the gross proceeds realized and (ii) subject to the production of satisfactory
evidence of acquisition costs and certain direct transaction costs of the shares or ADSs, 22% (including local income
surtax) of the net realized gain, and to make payment of these amounts to the Korean tax authority, unless you
establish your entitlement to an exemption under an applicable tax treaty or domestic tax law. See the discussion under
“—Tax Treaties” below for an additional explanation of claiming treaty benefits.
Tax Treaties
Korea has entered into a number of income tax treaties with other countries, including the United States,
which reduce or exempt Korean withholding tax on dividend income and capital gains on transfer of shares of
common stock or ADSs. For example, under the Korea-U.S. income tax treaty, reduced rates of Korean withholding
tax on dividends of 16.5% or 11%, respectively (including local income surtax), depending on your shareholding ratio,
and an exemption from Korean withholding tax on capital gains are available to residents of the United States that are
beneficial owners of the relevant dividend income or capital gains. However, under Article 17 (Investment or Holding
Companies) of the Korea-U.S. income tax treaty, such reduced rates and exemption do not apply if (1) you are a U.S.
corporation, (2) by reason of any special measures, the tax imposed on you by the United States with respect to such
dividends or capital gains is substantially less than the tax generally imposed by the United States on corporate profits,
and (3) 25% or more of your capital is held of record or is otherwise determined, after consultation between competent
authorities of the United States and Korea, to be owned directly or indirectly by one or more persons who are not
individual residents of the United States. Also, under Article 16 (Capital Gains) of the Korea-U.S. income tax treaty,
the exemption on capital gains does not apply if you are an individual, and (a) you maintain a fixed base in Korea for a
period or periods aggregating 183 days or more during the taxable year and your ADSs or shares of common stock
giving rise to capital gains are effectively connected with such fixed base or (b) you are present in Korea for a period
or periods of 183 days or more during the taxable year. You should inquire for yourself whether you are entitled to the
benefit of an income tax treaty with Korea. It is the responsibility of the party claiming the benefits of an income tax
treaty in respect of dividend payments or capital gains to submit to us, the purchaser or the financial investment
company, as applicable, a certificate as to his tax residence. In the absence of sufficient proof, we, the purchaser or the
financial investment company, as applicable, must withhold tax at the normal rates.
Furthermore, in order for you to claim the benefit of a tax rate reduction or tax exemption on certain Korean
source income (e.g., dividends and capital gains) under an applicable tax treaty, subject to certain exceptions, Korean
tax law requires you (or your agent) as the beneficial owner of such Korean source income to submit the relevant
application (Application for Entitlement to Reduced Tax Rate or Application for Tax Exemption, as the case may be)
along with a certificate of your tax residency issued by a competent authority of your country of tax residence (“BO
Application”). However, if you are an entity seeking such tax exemption for an amount that is W1 billion or more
(including where the aggregate amount exempted within one year from the last day of the month in which the payment
was made, is W1 billion or more), in addition to the certificate of tax residence issued by a competent authority of your
country of residence, you will be required to submit (i) the names and addresses of all of the members of your board of
directors, (ii) the identities and shareholding percentages of all of your shareholders (provided that if there are more
than 100 shareholders, you may instead provide a statement showing the total number of shareholders and the
aggregate investment amount from each country), and (iii) audit reports for the most recent three years submitted to the
country of residence (or, if you are an entity that has been in existence for less than three years, audit reports since
incorporation). Such application should be submitted to the withholding agent prior to the payment date of such
Korean source income. Subject to certain exceptions, where the Korean source income is paid to an overseas
investment vehicle that is not the beneficial owner of such income (“OIV”), a beneficial owner claiming the benefit of
an applicable tax treaty with respect to the Korean source income must submit its BO Application to such OIV, which
must submit an OIV report and a schedule of beneficial owners (and the BO Applications collected from each
beneficial owner, if such beneficial owner is applying for tax exemption) to the withholding agent prior to the payment
86
date of such Korean source income. Effective from January 1, 2022, an OIV is deemed to be a beneficial owner of the
Korean source income if (i) under the applicable tax treaty, the OIV bears tax liabilities in the country in which it is
established and (ii) the Korean source income is eligible for the treaty benefits under the tax treaty. The benefits under
a tax treaty between Korea and the country of such OIV’s residence will apply with respect to the relevant income paid
to such OIV, subject to certain application requirements as prescribed by the Corporate Income Tax or Individual
Income Tax Law. In the case of an application for tax exemption, the withholding agent is required to submit the
application (together with the applicable OIV report in the case of income paid to an OIV) to the relevant district tax
office by the ninth day of the month following the date of the payment of such income.
Inheritance Tax and Gift Tax
If you die while holding an ADS or donate an ADS, it is unclear whether, for Korean inheritance and gift tax
purposes, you will be treated as the owner of the shares of common stock underlying the ADSs. If the tax authority
interprets depositary receipts as the underlying share certificates, you may be treated as the owner of the shares of
common stock and your heir or the donee (or in certain circumstances, you as the donor) will be subject to Korean
inheritance or gift tax presently at the rate of 10% to 50% based on the value of the ADSs or shares of common stock
and the identity of the individual against whom the tax is assessed.
If you die while holding a share of common stock or donate a share of common stock, your heir or donee (or
in certain circumstances, you as the donor) will be subject to Korean inheritance or gift tax at the same rate as
indicated above.
At present, Korea has not entered into any tax treaty relating to inheritance or gift taxes.
Securities Transaction Tax
If you transfer shares of common stock on the Korea Exchange in 2025, you will be subject to agriculture and
fishery special surtax at the rate of 0.15% of the sale price of the shares of common stock and will not be subject to
securities transaction tax. If your transfer of the shares of common stock is not made on the Korea Exchange, subject
to certain exceptions, you will be subject to securities transaction tax at the rate of 0.35% and will not be subject to
agriculture and fishery special surtax.
Depositary receipts, which the ADSs constitute, are included in the scope of securities the transfers of which
are subject to securities transaction tax. However, transfer of depositary receipts listed on a foreign securities exchange
similar to that of Korea (e.g., the New York Stock Exchange or the Nasdaq Stock Market) will not be subject to the
securities transaction tax.
In principle, the securities transaction tax, if applicable, must be paid by the transferor of the shares or certain
rights including rights to subscribe to each shares. When the transfer is effected through a securities settlement
company in Korea, such settlement company is generally required to withhold and pay the tax to the tax authorities.
When such transfer is made through a financial investment company only, such financial investment company is
required to withhold and pay the tax. Where the transfer is effected by a non-resident without a permanent
establishment in Korea, other than through a securities settlement company or a financial investment company, the
transferee is required to withhold the securities transaction tax.
Non-reporting or under-reporting of securities transaction tax will generally result in penalties equal to 20%
to 60% of the non-reported tax amount or 10% to 60% of the under-reported tax amount, respectively. Also, a failure
to timely pay securities transaction tax will result in a penalty equal to 8.03% per annum of the due but unpaid tax
amount. The penalties are imposed on the party responsible for paying the securities transaction tax or, if such tax is
required to be withheld, on the party that has the obligation to withhold.
United States Taxation
This summary describes certain material U.S. federal income tax consequences for a U.S. holder (as defined
below) of acquiring, owning, and disposing of shares of common stock or ADSs. This summary applies to you only if
you hold shares of common stock or ADSs as capital assets for tax purposes. This summary does not apply to you if
you are a member of a class of holders subject to special rules, such as:
•
a dealer in securities or currencies;
87
•
a trader in securities that elects to use a mark-to-market method of accounting for securities holdings;
•
a bank or financial institution;
•
a life insurance company;
•
a tax-exempt organization;
•
an entity treated as a partnership (and partners therein) or other pass-through entity for U.S. federal
income tax purposes;
•
a person that holds shares of common stock or ADSs that are a hedge or that are hedged against interest
rate or currency risks;
•
a person that holds shares of common stock or ADSs as part of a straddle or conversion transaction for
tax purposes;
•
a person whose functional currency for tax purposes is not the U.S. dollar; or
•
a person that owns or is deemed to own 10% or more of our stock (by vote or by value).
This summary is based on the Internal Revenue Code of 1986, as amended, its legislative history, existing and
proposed regulations promulgated thereunder, published rulings and court decisions, all as currently in effect and the
United States – Republic of Korea Income Tax Convention (the “Treaty”). These laws are subject to change, possibly
on a retroactive basis.
In addition, this summary does not discuss the application of the Medicare net investment income tax or any
alternative minimum tax. Please consult your own tax advisers concerning the consequences of purchasing, owning,
and disposing of shares of common stock or ADSs in your particular circumstances, including the possible application
of state, local, non-U.S. or other tax laws.
For purposes of this summary, you are a “U.S. holder” if you are a beneficial owner of a share of common
stock or an ADS and you are:
•
a citizen or resident of the United States;
•
a U.S. domestic corporation; or
•
otherwise subject to U.S. federal income tax on a net income basis with respect to income from the share
of common stock or ADS.
In general, if you are the beneficial owner of ADSs, you will be treated as the beneficial owner of the
common stock represented by those ADSs for U.S. federal income tax purposes, and no gain or loss will be recognized
if you exchange an ADS for the common stock represented by that ADS.
Dividends
The gross amount of cash dividends that you receive (prior to deduction of Korean taxes) generally will be
subject to U.S. federal income taxation as foreign source ordinary dividend income. Dividends paid in Korean Won
will be included in your income in a U.S. dollar amount calculated by reference to the exchange rate in effect on the
date that you receive the dividend (or the date of the depositary’s receipt of the dividend, in the case of ADSs),
regardless of whether the payment is in fact converted into U.S. dollars. If such a dividend is converted into U.S.
dollars on the date of receipt, you generally should not be required to recognize foreign currency gain or loss in respect
of the dividend income.
The U.S. dollar amount of “qualified dividends” received by an individual U.S. holder in respect of shares of
common stock or ADSs generally will be subject to taxation at a lower rate than other ordinary income. Subject to
certain exceptions for short-term (60 days or less) and hedged positions, dividends paid on the common stock or ADSs
will be treated as qualified dividends if (i) we are eligible for the benefits of a comprehensive income tax treaty with
the United States that the Internal Revenue Service (the “IRS”) has approved for purposes of the qualified dividend
income rules or the dividends are paid with respect to ADSs that are readily tradable on an established securities
market in the United States and (ii) we were not, in the year prior to the year in which the dividend was paid, and are
not, in the year in which the dividend is paid, a passive foreign investment company (a “PFIC”). The Treaty has been
approved for purposes of the qualified dividend rules. The ADSs are listed on the New York Stock Exchange and will
qualify as readily tradable on an established securities market in the United States so long as they are so listed. Based
88
on our audited financial statements and relevant market and shareholder data, we believe that we were not treated as a
PFIC for U.S. federal income tax purposes with respect to our 2024 taxable year. In addition, based on our current
expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market
and shareholder data, we do not anticipate becoming a PFIC for our 2025 taxable year.
Distributions of additional shares in respect of shares of common stock or ADSs that are made as part of a
pro-rata distribution to all of our shareholders generally will not be subject to U.S. federal income tax, unless you have
the right to receive cash or property instead, in which case you will be treated as if you received cash equal to the fair
market value of the distribution.
Sale or Other Disposition
For U.S. federal income tax purposes, gain or loss you realize on the sale or other disposition of shares of
common stock or ADSs will be treated as U.S. source capital gain or loss, and will be long-term capital gain or loss if
the shares of common stock or ADSs were held for more than one year. Your ability to offset capital losses against
ordinary income is limited. Long-term capital gain recognized by an individual U.S. holder generally is subject to
taxation at a reduced rate.
Foreign Tax Credit Considerations
Subject to generally applicable limitations and conditions, Korean dividend withholding tax paid at the
appropriate rate applicable to the U.S. holder may be eligible for a credit against such U.S. holder’s U.S. federal
income tax liability. These generally applicable limitations and conditions include requirements adopted by the IRS in
regulations promulgated in December 2021, and any Korean tax will need to satisfy these requirements in order to be
eligible to be a creditable tax for a U.S. holder. In the case of a U.S. holder that consistently elects to apply a modified
version of these rules under temporary guidance issued in 2023 and complies with specific requirements as set forth in
such guidance, the Korean tax may be treated as meeting the new requirements and therefore as a creditable tax. In the
case of all other U.S. holders, the application of these requirements to the Korean tax on dividends is uncertain, and we
have not determined whether these requirements are met, including requirements applicable to the Treaty. If the
Korean tax is not a creditable tax for a U.S. holder or the U.S. holder does not elect to claim a foreign tax credit for any
foreign income taxes, the U.S. holder may be able to deduct the Korean tax in computing such U.S. holder’s taxable
income for U.S. federal income tax purposes. Dividends will constitute income from sources without the United States
and, if the withholding tax is a creditable tax for a U.S. holder that elects to claim foreign tax credits, generally will
constitute “passive category income” for foreign tax credit purposes.
Additionally, under the foreign tax credit requirements discussed above, any Korean tax imposed on the sale
or other disposition of the shares of common stock or ADSs generally will not be treated as a creditable tax for U.S.
foreign tax credit purposes except in the case of a U.S. holder that consistently elects to apply a modified version of
the U.S. foreign tax credit rules that is permitted under the temporary guidance discussed above and complies with the
specific requirements set forth in such guidance. Additionally, capital gain or loss recognized by a U.S. holder on the
sale or other disposition of the shares of common stock or ADSs generally will be U.S. source gain or loss for U.S.
foreign tax credit purposes. Consequently, even if the withholding tax qualifies as a creditable tax, a U.S. holder may
not be able to credit the tax against its U.S. federal income tax liability unless such credit can be applied (subject to
generally applicable conditions and limitations) against tax due on other income treated as derived from foreign
sources. If the Korean tax is not a creditable tax, the tax would reduce the amount realized on the sale or other
disposition of the shares of common stock or ADSs even if the U.S. holder has elected to claim a foreign tax credit for
other taxes in the same year. U.S. holders should consult their own tax advisors regarding the application of the
foreign tax credit rules to a sale or other disposition of the shares of common stock or ADSs and any Korean tax
imposed on such sale or disposition.
Any Korean securities transaction tax or agriculture and fishery special surtax that you pay will not be
creditable for foreign tax credit purposes.
The availability and calculation of foreign tax credits and deductions for foreign taxes depend upon a U.S.
holder’s particular circumstances and involve the application of complex rules to those circumstances. The temporary
guidance discussed above also indicates that the Treasury and the IRS are considering proposing amendments to the
December 2021 regulations, and that the temporary guidance can be relied upon until additional guidance is issued that
89
withdraws or modifies the temporary guidance. U.S. holders should consult their own tax advisors regarding the
application of these rules to their particular situations.
Specified Foreign Financial Assets
Certain U.S. holders that own “specified foreign financial assets” with an aggregate value in excess of
US$50,000 on the last day of the taxable year or US$75,000 at any time during the taxable year are generally required
to file an information statement along with their tax returns, currently on IRS Form 8938, with respect to such assets.
“Specified foreign financial assets” include any financial accounts held at a non-U.S. financial institution, as well as
securities issued by a non-U.S. issuer (which would include shares of common stock or ADSs) that are not held in
accounts maintained by financial institutions. Higher reporting thresholds apply to certain individuals living abroad
and to certain married individuals. Regulations extend this reporting requirement to certain entities that are treated as
formed or availed of to hold direct or indirect interests in specified foreign financial assets based on certain objective
criteria. U.S. holders who fail to report the required information could be subject to substantial penalties. Prospective
investors should consult their own tax advisors concerning the application of these rules to their investment in shares
of common stock or ADSs, including the application of the rules to their particular circumstances.
U.S. Information Reporting and Backup Withholding Rules
Payments of dividends and sales proceeds that are made within the United States or through certain U.S.
related financial intermediaries are subject to information reporting and may be subject to backup withholding unless
the holder (i) establishes that it is a corporation or other exempt recipient or (ii) provides a taxpayer identification
number and certifies that no loss of exemption from backup withholding has occurred.
Holders that are not U.S. persons generally are not subject to information reporting or backup withholding.
However, such a holder may be required to provide a certification of its non-U.S. status in connection with payments
received within the United States or through a U.S. related financial intermediary.
Item 10.F. Dividends and Paying Agents
Not applicable.
Item 10.G. Statements by Experts
Not applicable.
Item 10.H. Documents on Display
We are subject to the information requirements of the Exchange Act and, in accordance therewith, are
required to file reports, including annual reports on Form 20-F, and other information with the SEC. These materials,
including this annual report and the exhibits thereto, may be inspected and copied at the SEC’s public reference rooms
in Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. As a foreign private issuer, we are also required to make filings with the
SEC by electronic means. Any filings we make electronically will be available to the public over the Internet at the
SEC’s web site at http://www.sec.gov.
Item 10.I. Subsidiary Information
Not applicable.
Item 10.J. Annual Report to Security Holders
Not applicable.
90
Item 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Overview
Market risk is the risk of loss related to adverse changes in market prices, including interest rates and foreign
exchange rates, of financial instruments. We are exposed to various financial market risks in our ordinary course of
business transactions, primarily from changes in interest rates and foreign exchange rates. We utilize various financial
derivatives, including forward and swap contracts to mitigate such risks as well as manage our exposure associated
with net asset and liability positions and cash flows denominated in foreign currencies. We have used, and intend to
continue to use, these financial derivatives only for hedging purposes and not for speculative purposes.
Our primary market risk exposures relate to interest rate movements on floating rate borrowings and
exchange rate movements on foreign currency denominated accounts receivable, as well as foreign currency
denominated future cash flows from sales, mostly denominated in U.S. dollars and foreign currency denominated
accounts payable for purchases of raw materials and supplies, primarily denominated in U.S. dollars and, to a lesser
extent, Chinese Yuan and Japanese Yen. The fair value of our financial instruments has been determined as the price,
as of the applicable measurement date, that we would receive when selling an asset or that we would pay when
transferring a liability, in an orderly transaction between market participants. Fair value is based on quoted market
prices where available.
For a further discussion of our market risk and fair value of our financial assets and liabilities, see Note 25 of
the notes to our financial statements.
Interest Rate Risks
Our exposure to interest rate risks relates primarily to our short-term and long-term debt obligations, which
are typically incurred to fund capital expenditures and repay maturing debt, as well as for working capital and other
general corporate purposes. As of December 31, 2024, we had outstanding short-term and long-term debt, including
current portion and prior to deducting discounts on bonds, in the aggregate amount of W14,551 billion (US$9,846
million). See Note 25(d) of the notes to our financial statements.
From time to time, we may enter into interest rate swap contracts to hedge against the effects of interest rate
fluctuations of certain of our floating rate long-term debt. As of December 31, 2024, W915 billion (US$619 million)
of our Korean Won denominated floating rate long-term borrowings were hedged against interest rate fluctuations
using variable-to-fixed interest rate swap contracts that expire in between 2025 and 2028. In connection with such
contracts, we recognized a loss on valuation of derivatives of W4 billion (US$3 million) in 2024. The table below
provides information about our interest rate swap contracts. The table presents notional amounts used to calculate the
contractual payments to be exchanged under such contracts.
Expected Maturity Dates
Fair Value
at
2025
2026
2027
2028
2029
Thereafter
Total
December
31, 2024
(in billions of Won, except for interest rate percentages)
Interest rate swaps
Variable to fixed (W)(1)
₩
190
₩
525
₩
100
₩
100
—
—
₩
915
₩
915
Average pay rate
4.57%
5.19%
5.41%
5.41%
—
—
Average receive rate
4.67%
4.51%
4.24%
4.31%
—
—
(1)
Average pay rates and average receive rates are applicable to the total notional amounts outstanding until maturity.
We may be exposed to interest rate risks on additional debt financing that we may periodically undertake to
fund capital expenditures required for our capacity expansion. Upward fluctuations in interest rates increase the cost of
new debt. The interest rate that we will be able to obtain in a new debt financing will depend on market conditions at
that time and may differ from the rates we have secured on our current debt.
As of December 31, 2024, we had US$560 million aggregate principal amount of U.S. dollar denominated
short-term loans, CNY726 million aggregate principal amount of CNY denominated short-term loans, US$2,528
million aggregate principal amount of U.S. dollar denominated long-term loans, CNY20,164 million aggregate
principal amount of CNY denominated long-term loans and W4,669 billion aggregate principal amount of Korean
Won denominated long-term loans. As of December 31, 2024, the interest rates for our U.S. dollar denominated loans
ranged from 4.00% to 7.06%, the interest rates for our CNY denominated loans ranged from 2.13% to 3.61%, and the
91
interest rates for our Korean Won denominated loans ranged from 2.41% to 6.06%. See Note 12 of the notes to our
financial statements.
If interest rates on borrowings with floating rates had been 1% higher or lower with all other variables held
constant, the impact on the profit or loss of the applicable period would be as follows:
For the Years Ended December 31,
2022
2023
2024
Increase
Decrease
Increase
Decrease
Increase
Decrease
(In billions of Won)
Increase or decrease in annual profit and
net equity
₩
(50) ₩
50
₩
(57) ₩
57
₩
(76) ₩
76
The table below provides information about our financial instruments that are sensitive to changes in interest
rates.
Expected Maturity Dates
2025
2026
2027
2028
2029
Thereafter
Total
Fair Value at
December 31,
2024
(in billions of Won, except for interest rate percentages)
Debt obligations
Fixed rate (₩)
₩
2,198
₩
880
₩
125
—
—
—
₩
3,203
₩
3,242
Average interest rate
5.1%
5.0%
3.7%
—
—
—
Variable rate (₩)
₩
275
₩
815
₩
825
₩
475
₩
50
₩
25
₩
2,465
₩
2,465
Average interest rate
5.0%
5.1%
5.1%
5.0%
5.0%
5.0%
Fixed rate (CNY)
₩
146
—
—
—
—
—
₩
146
₩
145
Average interest rate
3.5%
—
—
—
—
—
Variable rate (CNY)
₩
1,645
₩
1,710
₩
704
—
—
—
₩
4,058
₩
4,058
Average interest rate
3.0%
2.9%
2.5%
—
—
—
Fixed rate (US$)
₩
794
—
₩
588
—
—
—
₩
1,382
₩
1,418
Average interest rate
4.4%
—
5.9%
—
—
—
Variable rate (US$)
₩
1,431
₩
588
₩
485
₩
485
₩
334
—
₩
3,324
₩
3,324
Average interest rate
6.3%
5.9%
5.7%
5.7%
5.7%
—
For a further discussion of our interest rate risk exposures, including a further sensitivity analysis on our
interest rate risk exposures, see Notes 12 and 25 of the notes to our financial statements.
Foreign Currency Risk
The primary foreign currency to which we are exposed is the U.S. dollar. We are also exposed, to a lesser
extent, to other foreign currencies, including the Chinese Yuan, the Japanese Yen and the Vietnamese Dong. For a
further discussion of our net exposure to such foreign currencies, see Note 25 of the notes to our financial statements.
From time to time, we hedge against the effect of exchange rate fluctuations of the U.S. dollar and Chinese
Yuan against the Korean Won on our U.S. dollar and Chinese Yuan debt exposure using cross-currency swap
contracts. The table below sets forth our outstanding cross currency interest rate swap contracts as of December 31,
2024.
Cross Currency Interest Rate Swap Contracts:
Contracts to sell Korean (Won)/buy US$:
Outstanding contract amount
US$
1,480 million
Average contractual exchange rate
(Won)
1,303.1/US$
Change in fair value
(Won)
130.4 billion
Contracts to sell Korean (Won)/buy CNY:
Outstanding contract amount
CNY
726 million
Average contractual exchange rate
(Won)
189.5/CNY
Change in fair value
(Won)
12.6 billion
92
In addition to relying on natural hedges created by foreign currency assets and liabilities, we enter into
forward exchange contracts with major financial institutions to minimize the impact of foreign currency fluctuations
on our foreign currency liabilities. Gains and losses on forward exchange contracts are recorded in the period of the
exchange rate changes as foreign exchange gain or loss. The table below sets forth our outstanding forward exchange
contracts as of December 31, 2024.
Forward Exchange Contracts:
Contracts to buy US$/sell Korean (Won):
Outstanding contract amount
US$
750 million
Average contractual exchange rate
(Won)
1,296.5/US$
Change in fair value
(Won)
155.1 billion
Our foreign currency exposure and changes in equity and profit or loss resulting from a 5% foreign exchange
rate change against the Korean Won are as follows:
For the Years Ended December 31,
2022
2023
2024
Equity
Profit or
loss
Equity
Profit or
loss
Equity
Profit or
loss
(In billions of Won)
U.S. Dollars (5% weakening)
₩
(114) ₩
(23) ₩
(69) ₩
44
₩
(8) ₩
(28)
U.S. Dollars (5% strengthening)
114
23
69
(44)
8
28
Chinese Yuan (5% weakening)
(106)
(0)
(172)
(0)
(271)
(0)
Chinese Yuan (5% strengthening)
106
0
172
0
271
0
Japanese Yen (5% weakening)
(9)
(9)
(8)
(8)
(5)
(5)
Japanese Yen (5% strengthening)
9
9
8
8
5
5
Vietnamese Dong (5% weakening)
(6)
(6)
(4)
(4)
(3)
(3)
Vietnamese Dong (5% strengthening)
6
6
4
4
3
3
Other Risks
We are exposed to credit risk in the event of non-performance by the counterparties under our forward
exchange contracts at maturity. In order to minimize this risk, we limit the transaction amount with any one party and
continually monitor the credit quality of the counterparties to these financial instruments. We do not anticipate any
material losses from these contracts, and we believe the risk of non-performance by the counterparties under these
contracts is remote.
A substantial portion of our sales is attributable to a limited number of our end-brand customers. Our top ten
end-brand customers, including our largest shareholder as an end-brand customer, together accounted for a substantial
majority of our sales in each of 2022, 2023 and 2024. While we negotiate directly with our end-brand customers
concerning the price and quantity of the sales, for some sales transactions we invoice the end-brand customers’
designated system integrators. As a result of our significant dependence on a concentrated group of end-brand
customers and their designated system integrators, we are exposed to credit risks associated with these entities. We
have established certain measures, such as factoring arrangements and requirement of credit insurance from customers,
to protect us from excessive exposure to such credit risks.
We manage our accounts receivable and credit exposure to customers by establishing credit limits for each
customer to whom we supply products on an open account basis in accordance with our internal credit guidelines. We
assess credit risk through quantitative and qualitative analysis, and based on this analysis, we establish credit limits
and determine whether we will seek to use one or more credit support devices, such as obtaining some form of third-
party guaranty or stand-by letter of credit, obtaining credit insurance or through factoring of all or part of accounts
receivables. Our credit policy does not require credit limits on accounts receivable created on letters of credit. To date,
we have not experienced any material problems relating to customer payments. For a further discussion of our credit
risk exposures, see Note 25 of the notes to our financial statements.
93
Item 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Fees and Charges
Under the terms of the deposit agreement, as a holder of our ADSs, you are required to pay the following
service fees to the depositary:
Services
Fees
Issuance of ADSs
Up to US$0.05 per ADS issued
Cancellation of ADSs
Up to US$0.05 per ADS canceled
Distribution of cash dividends or other cash distributions
Up to US$0.02 per ADS held
Distribution of ADSs pursuant to (i) stock dividends or other free stock
distributions or (ii) exercise of rights to purchase additional ADSs
Up to US$0.02 per ADS held
Distribution of securities other than ADSs or rights to purchase additional ADSs
Up to US$0.05 per ADS held
Other ADS services
Up to US$0.02 per ADS held
As a holder of our ADSs, you are also responsible for paying certain fees and expenses incurred by the
depositary and certain taxes and governmental charges such as the following:
•
Fees for the transfer and registration of shares charged by the registrar and transfer agent for the shares in
Korea (i.e., upon deposit and withdrawal of shares).
•
Expenses incurred for converting foreign currency into U.S. dollars.
•
Expenses for cable, telex and fax transmissions and for delivery of securities.
•
Taxes and duties upon the transfer of securities (i.e., when shares are deposited or withdrawn from
deposit).
•
Fees and expenses incurred in connection with the delivery or servicing of shares on deposit.
Depositary fees payable upon the issuance and cancellation of ADSs are typically paid to the depositary by
the brokers (on behalf of their clients) receiving the newly issued ADSs from the depositary and by the brokers (on
behalf of their clients) delivering the ADSs to the depositary for cancellation. The brokers in turn charge these fees to
their clients. Depositary fees payable in connection with distributions of cash or securities to ADS holders and the
depositary services fee are charged by the depositary to the holders of record of ADSs as of the applicable ADS record
date.
The depositary fees payable for cash distributions are deducted from the cash being distributed. In the case of
distributions other than cash (i.e., stock dividend, rights), the depositary charges the applicable fee to the ADS record
date holders concurrent with the distribution. In the case of ADSs registered in the name of the investor (whether
certificated or uncertificated in direct registration), the depositary sends invoices to the applicable record date ADS
holders. In the case of ADSs held in brokerage and custodian accounts (via the Depository Trust Company, or DTC),
the depositary collects its fees through the systems provided by DTC (whose nominee is the registered holder of the
ADSs held in DTC) from the brokers and custodians holding ADSs in their DTC accounts. The brokers and custodians
who hold their clients’ ADSs in DTC accounts in turn charge their clients’ accounts the amount of the fees paid to the
depositary.
In the event of refusal to pay the depositary fees, the depositary may, under the terms of the deposit
agreement, refuse the requested service until payment is received or may set off the amount of the depositary fees from
any distribution to be made to such holder of ADSs.
Note that the fees and charges you may be required to pay may vary over time and may be changed by us and
by the depositary. You will receive prior notice of such changes.
Fees and Payments from the Depositary to Us
In 2024, we received the following payments, after deduction of applicable U.S. taxes, from the depositary:
Reimbursement of proxy process expenses (printing, postage and distribution)(1)
US$640,232
Contributions towards our investor relations efforts (i.e. non-deal roadshows, investor
conferences and IR agency fees) and legal expenses incurred in connection with the
preparation of our Form 20-F for the fiscal year 2023(1)
US$640,232
(1)
Under discussions with the depositary for the amount of applicable payment with respect to 2024.
94
PART II
Item 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
Not applicable.
Item 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS
Not applicable.
Item 15. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Our management has evaluated, with the participation of our chief executive officer and chief financial
officer, the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and
15d-15(e) under the Exchange Act, as of December 31, 2024. There are inherent limitations to the effectiveness of any
system of disclosure controls and procedures, including the possibility of human error and the circumvention or
overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only
provide reasonable assurance of achieving their control objectives. Based upon our evaluation, our chief executive
officer and chief financial officer concluded that our disclosure controls and procedures were effective as of such date.
Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the
time periods specified in the Commission’s rules and forms, and that it is accumulated and communicated to our
management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions
regarding required disclosure.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over
financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. Our internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our
assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are
being made only in accordance with authorizations of our management and directors; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that
could have a material effect on the financial statements. Because of its inherent limitations, internal control over
financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would
be prevented or detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate. Under the supervision and with the participation of our management, including
our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of our internal
control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by
the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation, our management
concluded that our internal control over financial reporting was effective as of December 31, 2024. The effectiveness
of our internal control over financial reporting as of December 31, 2024 has been audited by Samil
PricewaterhouseCoopers and its affiliates (“PwC”), an independent registered public accounting firm, as stated in their
report which is included in Item 18 of this Form 20-F.
Changes in Internal Control Over Financial Reporting
There has been no change in our internal control over financial reporting during 2024 that has materially
affected, or is reasonably likely to materially affect, our internal control over financial reporting.
95
Item 16. [RESERVED]
Item 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Our board of directors has determined that Doo Cheol Moon qualifies as an “audit committee financial
expert” and is independent within the meaning of this Item 16A.
Item 16B. CODE OF ETHICS
We have adopted a code of ethics, as defined in Item 16B of Form 20-F under the Exchange Act. Our Code of
Ethics applies to our chief executive officer, chief financial officer and persons performing similar functions as well as
to our non-executive directors and other officers and employees. Our Code of Ethics is available on our website at
www.lgdisplay.com. If we amend the provisions of our Code of Ethics that apply to our chief executive officer and
chief financial officer and persons performing similar functions, or if we grant any waiver of such provisions, we will
disclose such amendment or waiver on our website at the same address.
Item 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets forth the fees billed to us by our former independent registered public accounting
firm, KPMG Samjong Accounting Corp., a member firm of KPMG International, and its affiliates, which we
collectively refer to as KPMG, for the fiscal year ended December 31, 2023 and by our current independent registered
public accounting firm, PwC for the fiscal year ended December 31, 2024:
Year ended December 31,
2023
2024
(in millions of Won)
Audit fees
₩
4,915
₩
5,881
Audit-related fees
—
—
Tax fees
163
820
All other fees
—
—
Total fees
₩
5,078
₩
6,701
Audit fees in the above table are the aggregate fees billed or expected to be billed, as the case may be, by our
independent registered public accounting firm in connection with the audit of our annual financial statements and the
review of our interim financial statements.
Audit-related fees in the above table are the aggregate fees billed or expected to be billed, as the case may be,
by our independent registered public accounting firm for assurance and related services that are reasonably related to
the performance of the audit or review of our financial statements and are not reported under “Audit fees.”
Tax fees in the above table are the aggregate fees billed or expected to be billed, as the case may be, by our
independent registered public accounting firm for tax compliance services.
All other fees in the above table are aggregate fees billed or expected to be billed, as the case may be, by our
independent registered public accounting firm for services other than the services reported above under “audit fees,”
“audit-related fees,” or “tax fees.”
Audit Committee Pre-Approval Policies and Procedures
Under our Audit Committee’s pre-approval policies and procedures, all audit and non-audit services to be
provided to us by our independent auditors must be pre-approved by our Audit Committee on a case-by-case basis.
Our Audit Committee does not pre-approve any audit or non-audit services that are prohibited from being provided to
us by an independent registered public accounting firm under the rules of the SEC and applicable law. In 2024, no fees
were approved pursuant to the de minimis exception.
Item 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not applicable.
96
Item 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Neither we nor any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) of the Exchange Act, purchased
any of our equity securities during the period covered by this annual report.
Item 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
The disclosure called for by paragraph (a) of this Item 16F was previously reported, as that term is defined in
Rule 12b-2 under the Exchange Act, in our Annual Report on Form 20-F for the year ended December 31, 2023 (File
No. 001-32238), filed on April 29, 2024.
Item 16G. CORPORATE GOVERNANCE
The following is a summary of the significant differences between the New York Stock Exchange’s corporate
governance standards and those that we follow under Korean law.
NYSE Corporate Governance Standards
LG Display’s Corporate Governance Practice
Director Independence
Listed companies must have a majority of independent
directors.
The majority of our board of directors is
independent (as defined in accordance with the
New York Stock Exchange’s standards), as four
out of seven directors are outside directors.
Nomination/Corporate Governance Committee
Listed companies must have a nomination/corporate
governance committee composed entirely of independent
directors. The committee must have a charter that
addresses the purpose, responsibilities (including
development of corporate governance guidelines) and
annual performance evaluation of the committee.
Although we have not established a separate
nomination/corporate governance committee, we
maintain an Outside Director Nomination
Committee, which is composed of two outside
directors and one non-outside director, and an ESG
Committee, which is composed of four outside
directors and one non-outside director.
Compensation Committee
Listed companies must have a compensation committee
composed entirely of independent directors. The
committee must have a charter that addresses the
purpose, responsibilities and annual performance
evaluation of the committee. The charter must be made
available on the company’s website. In addition, in
accordance with the U.S. Securities and Exchange
Commission rules adopted pursuant to Section 952 of the
Dodd-Frank Act, the New York Stock Exchange listing
standards were amended to expand the factors relevant in
determining whether a committee member has a
relationship with the company that will materially affect
that member’s duties to the compensation committee.
Under Korean law, we are not required to establish
a compensation committee. Accordingly, we do
not currently have a compensation committee, and
our board of directors is directly responsible for
matters relating to salaries and incentive
compensation for our directors and executive
officers.
Executive Session
Non-management directors of listed companies must
meet in regularly scheduled executive sessions without
management. Independent directors should meet alone in
an executive session at least once a year.
We do not normally hold executive sessions solely
attended by non-management directors as that is
not required under Korean law but we may elect to
do so at the discretion of the directors.
Audit Committee
Listed companies must have an audit committee that
satisfies the requirements of Rule 10A-3 under the
Exchange Act. All members must be independent. The
We maintain an Audit Committee composed of
three or more outside directors who meet the
97
committee must have a charter addressing the
committee’s purpose, an annual performance evaluation
of the committee, and the duties and responsibilities of
the committee. The charter must be made available on
the company’s website.
applicable independence criteria set forth under
Rule 10A-3 of the Exchange Act.
Audit Committee Additional Requirements
Listed companies must have an audit committee that is
composed of at least three directors.
Our Audit Committee currently has four
directors.
Shareholder Approval of Equity Compensation Plan
Listed companies must allow its shareholders to exercise
their voting rights with respect to any material revision
to the company’s equity compensation plan.
We currently have two equity compensation plans:
one providing for the grant of stock options to
officers and key employees and an Employee
Stock Ownership Plan, or ESOP.
Stock options to officers and key employees may
be granted pursuant to a resolution of the
shareholders in an amount not to exceed 15% of
the total number of our issued and outstanding
shares. However, the board of directors may grant
stock options to non-director officers and
employees up to 1% of the total number of our
issued and outstanding shares, which grant must be
approved by a resolution of the subsequent general
meeting of shareholders.
All material matters related to the granting of stock
options are provided in our articles of
incorporation, and any amendments to the articles
of incorporation are subject to shareholders’
approval. Matters related to the ESOP are not
subject to shareholders’ approval under Korean
law.
Shareholder Approval of Equity Offerings
Listed companies must allow its shareholders to exercise
their voting rights with respect to equity offerings that do
not qualify as public offerings for cash, and offerings of
equity of related parties.
The Korean Commercial Code and our articles of
incorporation provide that any and all terms and
conditions for the issuance of new shares of the
company shall be determined by a resolution of the
board of directors. The company may allot new
shares by a resolution of the board of directors to
persons other than its shareholders when certain
requirements are satisfied, including where new
shares are issued by way of general public
offering, and are issued to corporations,
institutional investors, domestic and foreign
financial institutions and others to further a
management objective such as strengthening the
company’s financials (provided, however, that
such allotment of new shares to persons other than
shareholders may only be made up to 30% of the
total number of issued and outstanding shares of
the company, in the following cases: i) when new
shares are issued to corporations, institutional
investors or domestic or foreign financial
institutions for the purpose of achieving the
98
company’s operational objectives, such as
improving the financial structure or ii) when new
shares are issued to attract foreign investment due
to business necessity).
Corporate Governance Guidelines
Listed companies must adopt and disclose corporate
governance guidelines.
We maintain a corporate governance charter as
well as corporate governance guidelines for our
board of directors. Our board of directors is
responsible for overseeing our policies, practices
and procedures in the area of corporate
governance.
Code of Business Conduct and Ethics
Listed companies must adopt and disclose a code of
business conduct and ethics for directors, officers and
employees, and promptly disclose any waivers of the
code for directors or executive officers.
We have adopted a Code of Ethics for all directors,
officers and employees. A copy of our Code of
Ethics is available on our website at
www.lgdisplay.com.
Item 16H. MINE SAFETY DISCLOSURE
Not applicable.
Item 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
Item 16J. INSIDER TRADING POLICIES
We have adopted insider trading policies governing the purchase, sale, and other dispositions of our securities
by directors, senior management, and employees. A copy of the insider trading policies is attached as an exhibit to this
annual report.
Item 16K. CYBERSECURITY
Risk Management and Strategy
We maintain a comprehensive process for assessing, identifying and managing material risks from
cybersecurity threats, including risks relating to disruption of business operations or financial reporting systems,
intellectual property theft, fraud, extortion, harm to employees or customers, violation of privacy laws and other
litigation and legal risk, and reputational risk, as part of our overall risk management system and processes. We utilize
policies, software, training programs and hardware solutions to protect and monitor our environment, including
multifactor authentication on all critical systems, firewalls, intrusion detection and prevention systems, vulnerability
and penetration testing and identity management systems.
Our cybersecurity risk management processes are part of our information security system designed in
compliance with ISO 27001 standards and International Electrotechnical Commission (“IEC”) standards. Our
certifications under such standards are valid for three years, and we are subject to an annual audit to maintain such
certifications. In particular, we manage our cybersecurity risks by applying the four-step Plan-Do-Check-Act process,
as recommended by and outlined in ISO 27001, to continually enhance our information security processes.
We also maintain a robust crisis management system, which provides a framework for responding to
cybersecurity incidents based on the severity of the incident and facilitates cross-functional coordination across
security, IT infrastructure, legal and public relations departments. In addition, we operate a Security Operations Center
that monitors and addresses day-to-day risks faced by our company.
Additionally, we also utilize external independent control measures to improve and update our cybersecurity
program, including independent third party assessments, penetration testing and scanning of our systems for
99
vulnerabilities. For example, we engage an accredited third party agency to conduct annual audits of our cybersecurity
system to verify the effectiveness, make recommendations for improvement and monitor remediation of any identified
risks. Any updates that are deemed necessary are initially reported to and approved by our Chief Information Security
Officer (“CISO”) prior to their implementation. We also provide annual information security awareness training for
employees, participate in cybersecurity drills conducted by the Korea Internet & Security Agency as well as send out
“phishing” email tests on a regular basis.
Our cybersecurity risk management processes extend to the oversight and identification of threats associated
with our use of third party service providers. When establishing a new data system that incorporates an external
service, we review whether the third party providers’ information security programs meet the security standards
required of our data systems, including whether the third party provider has obtained international certification for its
services.
We also carry limited insurance that provides protection against potential losses arising from cybersecurity
incidents and annually review our policy and levels of coverage based on current risks.
Our business strategy, results of operations and financial condition have not been materially affected by risks
from cybersecurity threats, including as a result of previous cybersecurity incidents, but we cannot provide assurance
that they will not be materially affected in the future by such risks and any future material incidents. See “Item 3.D.
Risk Factors—Risks Relating to Our Company—If our cybersecurity is breached, we may incur significant legal and
financial exposure, damage to our reputation and a loss of confidence of our customers” for more information on risks
from cybersecurity threats that are reasonably likely to materially affect our business strategy, results of operations and
financial condition.
Governance
The cybersecurity risk management processes described above are managed by our CISO, our Chief
Information Officer (“CIO”) and our Chief Risk Officer (“CRO”). Our CISO is supported by three dedicated teams
that respectively focus on establishing our cybersecurity goals and policies, examining security hazards and
conducting security training. Our CIO oversees the operation of our IT systems, under which our Enterprise
Architecture Team works to prevent cybersecurity breaches and performs control, response and recovery action in case
of any cybersecurity breach. By dividing our cybersecurity roles from our IT system operation roles, we seek to
prevent the abuse of and accidental or intentional misuse of data. In the event of a cybersecurity incident that would
pose an organizational-level threat, our Emergency Response Committee, which is led by our CRO and includes a
Cybersecurity Incident Subcommittee, would oversee response.
Our CISO is appointed in accordance with the requirements set forth by the Act on Promotion of Information
and Communications Network Utilization and Data Protection in Korea. Our current CISO holds a master’s degree in
security convergence science, possesses cybersecurity-related certifications and has more than 20 years of information
security-related work experience.
Our day-to-day execution of cybersecurity processes are internally reported through email, phone, or formal
reports on a monthly and as-needed basis. In the event of a cybersecurity incident, information including the date and
time, name of breached system, cause and scale of damage, result of response, and classification of incident is reported
to the appropriate members of the management. Our Board of Directors oversees all of our business, property and
affairs, including cybersecurity risks, and our management provides reports to the Board of Directors on an as needed
basis in the event of a material cybersecurity incident or for matters that require any material decision making.
100
PART III
Item 17. FINANCIAL STATEMENTS
Not applicable.
Item 18. FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm (PwC)
F-2
Report of Independent Registered Public Accounting Firm (KPMG)
F-5
Consolidated statements of financial position as of December 31, 2023 and 2024
F-6
Consolidated statements of comprehensive income (loss) for the years ended December 31, 2022, 2023 and
2024
F-8
Consolidated statements of changes in equity for the years ended December 31, 2022, 2023 and 2024
F-10
Consolidated statements of cash flows for the years ended December 31, 2022, 2023 and 2024
F-12
Notes to the consolidated financial statements
F-15
101
Item 19.EXHIBITS
Number
Description
1.1
Amended and Restated Articles of Incorporation (translation in English)
2.1*
Form of Common Stock Certificate (translation in English) (incorporated by reference to Exhibit 4.1 to
the Registrant’s Registration Statement (No. 333-116819) on Form F-1, filed on July 13, 2004)
2.2*
Deposit Agreement (including Form of American Depositary Receipt) (incorporated by reference to
Exhibit (a) to the Registrant’s Registration Statement (No. 333-147661) on Form F-6, filed on
November 28, 2007)
2.3*
Form of Amendment No. 1 to Deposit Agreement (including Form of American Depositary Receipt)
(incorporated by reference to Exhibit (a)(i) to the Registration Statement (No. 333-147661) on Post
Effective Amendment No. 1 to Form F-6, filed on July 30, 2014)
2.4*
Letter from Citibank, N.A., as depositary, dated as of November 29, 2007, to the Registrant relating to
the direct registration system for the American depositary receipts (incorporated by reference to Exhibit
2.3 to the Registrant’s Annual Report (No. 001-32238) on Form 20-F, filed on April 16, 2008)
2.5
Description of LG Display Co., Ltd.’s Capital Stock (see Item 10.B. Memorandum and Articles of
Association)
2.6
Description of LG Display Co., Ltd.’s American Depositary Shares
8.1
List of subsidiaries of LG Display Co., Ltd. (see Note 1(b) of the notes to the consolidated financial
statements of LG Display Co., Ltd. included in this annual report)
11.1
Insider Trading Policy (translation in English)
12.1
Section 302 certification of the Chief Executive Officer
12.2
Section 302 certification of the Chief Financial Officer
13.1
Section 906 certification of the Chief Executive Officer
13.2
Section 906 certification of the Chief Financial Officer
97.1*
LG Display Co., Ltd.’s Clawback Guidelines for Misstatements of Financial Statements, etc.
(translation in English)(incorporated by reference to Exhibit 97.1 to the Registrant’s Annual Report
(No. 001-32238) on Form 20-F, filed on April 29, 2024)
101.INS
Inline XBRL Instance Document
101.SCH
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104
The cover page for the Company’s Annual Report on Form 20-F for the year ended December 31, 2024
has been formatted in Inline XBRL
* Filed previously.
102
INDEX TO FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PwC)
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (KPMG)
F-5
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF DECEMBER 31, 2023 AND 2024 F-6
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED
DECEMBER 31, 2022, 2023 AND 2024
F-8
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER
31, 2022, 2023 AND 2024
F-10
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2022,
2023 AND 2024
F-12
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F-15
103
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly
caused and authorized the undersigned to sign this annual report on its behalf.
LG DISPLAY CO., LTD.
(Registrant)
/s/ CHEOLDONG JEONG
(Signature)
Name: Cheoldong Jeong
Title: Representative Director, President and
Chief Executive Officer
/s/ SUNGHYUN KIM
(Signature)
Name:Sunghyun Kim
Title: Executive Vice President and
Chief Financial Officer
Date: April 28, 2025
F-1
INDEX TO FINANCIAL STATEMENTS
Page
Report of Independent Registered Public Accounting Firm (PwC)
F-2
Report of Independent Registered Public Accounting Firm (KPMG)
F-5
Consolidated Statements of Financial Position
F-6
Consolidated Statements of Comprehensive Loss
F-8
Consolidated Statements of Changes in Equity
F-10
Consolidated Statements of Cash Flows
F-12
Notes to the Consolidated Financial Statements
F-15
F-2
Samil PricewaterhouseCoopers, 100 Hangang-daero, Yongsan-gu, Seoul 04386, Korea, www.samil.com
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
LG Display Co., Ltd.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated statement of financial position of LG Display Co., Ltd. and its subsidiaries
(the “Company”) as of December 31, 2024, and the related consolidated statements of comprehensive income (loss), changes
in equity and of cash flows for the year then ended, including the related notes (collectively referred to as the “consolidated
financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31,
2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2024 and the results of its operations and its cash flows for the year then ended
in conformity with IFRS Accounting Standards as issued by the International Accounting Standards Board. Also in our
opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December
31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting,
included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting appearing under
Item 15. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's
internal control over financial reporting based on our audit. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained
in all material respects.
Our audit of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of
internal control over financial reporting included obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in
the circumstances. We believe that our audit provides a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
F-3
dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use,
or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial
statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or
disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective,
or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate
opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Impairment assessment on CGU - Display, Display (Large OLED) and Display (AD PO)
As described in Notes 9 and 10 to the consolidated financial statements, the Company's carrying amounts for property, plant,
and equipment and intangible assets, amounting to W 17,202,873 million and W 1,558,407 million respectively as of
December 31, 2024, were allocated to the relevant cash-generating units(CGU): Display, Display (Large OLED), and
Display (AD PO). Management identified the indicators of impairment due to market capitalization being less than the
carrying amount of net assets and continuous operating losses in the competitive display market. Management conducted an
impairment test by estimating the recoverable amount using the value in use based on the discounted cash flow model as of
December 31, 2024. Management’s estimate of the recoverable amount included significant judgments and assumptions
relating to projected operating income(loss) and discount rate.
The principal considerations for our determination that performing procedures relating to the impairment assessment on
CGU of the Display, Display (Large OLED) and Display (AD PO) is a critical audit matter are (i) the significant judgment
by management when developing the recoverable amount of the Display, Display (Large OLED) and Display (AD PO)
CGUs; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s
key assumptions related to projected operating income(loss) and discount rate; and (iii) the audit effort involved the use of
professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
the appropriateness of impairment assessment on CGU involving key judgments and assumptions by management. These
procedures also included, among others, (i) testing management’s process for developing the recoverable amount estimate
(ii) evaluating the appropriateness of the discounted cash flow model used by management; (iii) testing the completeness
and accuracy of underlying data used in the discounted cash flow model; and (iv) evaluating the reasonableness of the
significant assumptions applied by management related to projected operating income(loss) and discount rate. Evaluating
management’s significant assumptions related to projected operating income(loss) involved assessing the feasibility of the
business plan utilized in the management’s calculation of value in use by comparing earlier forecasts with the actual
performance in the current period. Professionals with specialized skill and knowledge were used to assist in evaluating (a)
the appropriateness of the discounted cash flow model, (b) the reasonableness of management’s significant assumptions
relating to the discount rate, (c) the reliability of underlying data and (d) the mathematical accuracy of the calculation of the
estimate by management.
F-4
Assessment of recognition of deferred tax assets
As described in Note 23 to the consolidated financial statements, deferred tax assets recognized as of December 31, 2024
for temporary differences, tax loss carryforwards, and tax credit carryforwards amount to W 3,504,177 million. Management
evaluated the realizability of deferred tax assets considering the probability of taxable profit against which temporary
differences, unused tax loss carryforwards, and tax credit carryforwards can be utilized.
The principal considerations for our determination that performing procedures relating to the assessment of recognition of
deferred tax assets is a critical audit matter are (i) the significant level of management judgement associated with estimating
future taxable profit with tax policies related to use of temporary differences, tax loss carryforwards, and tax credits
carryforwards and (ii) a high degree of auditor subjectivity and effort in performing procedures and evaluating management’s
key assumptions related to estimating future taxable profit and tax policies.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
the management’s review and approval of significant assumptions in taxable profit forecasts and utilization of tax policy.
These procedures also included, among others, (i) evaluating whether expected taxable profit estimates are based on
approved business plans, transfer pricing, and dividend policies; (ii) evaluating the appropriateness of management's
estimates on future taxable profit by comparing past estimated taxable profit with actual performance for the current period;
(iii) evaluating the appropriateness of estimated timing for realization of temporary differences; (iv) evaluating whether
expected tax rates applied to measure the deferred tax assets are based on enacted or substantively enacted tax rates by
December 31, 2024 and expected to apply to accounting periods when assets are realized.
/s/ Samil PricewaterhouseCoopers
Seoul, Korea
April 28, 2025
We have served as the Company’s auditor since 2024.
F-5
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
LG Display Co., Ltd.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statement of financial position of LG Display Co., Ltd. and its subsidiaries
(the “Group”) as of December 31, 2023, the related consolidated statements of loss, comprehensive loss, changes in equity,
and cash flows for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively,
the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material
respects, the financial position of the Group as of December 31, 2023 and the results of its operations and its cash flows for
each of the years in the two-year period ended December 31, 2023, in conformity with International Financial Reporting
Standards Accounting Standards as issued by the International Accounting Standards Board.
Basis for Opinion
These consolidated financial statements are the responsibility of the Group’s management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with
the Public Company Accounting Oversight Board (PCAOB) and are required to be independent with respect to the Group
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We
believe that our audits provide a reasonable basis for our opinion.
/s/ KPMG Samjong Accounting Corp.
We have served as the Group’s auditor from 2008 to 2024.
Seoul, Korea
April 29, 2024
F-6
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Consolidated Statements of Financial Position
As of December 31, 2023 and 2024
(In millions of won)
Note
December 31, 2023
December 31, 2024
Assets
Cash and cash equivalents
4, 25
₩
2,257,522
2,021,640
Deposits in banks
4, 25
905,971
600
Trade accounts and notes receivable, net
5, 15, 25, 28
3,218,093
3,624,477
Other accounts receivable, net
5, 25
126,985
250,029
Other current financial assets
6, 25
168,623
328,621
Inventories
7
2,527,728
2,671,242
Prepaid income taxes
44,505
12,774
Assets held for sale
29
—
983,317
Other current assets
253,759
230,337
Total current assets
9,503,186
10,123,037
Deposits in banks
4, 25
11
11
Investments in equity accounted investees
8
84,329
33,177
Other non-current financial assets
6, 25
173,626
232,652
Property, plant and equipment, net
9, 17
20,200,332
17,202,873
Intangible assets, net
10, 17
1,773,955
1,558,407
Investment property
11, 17
32,995
27,911
Deferred tax assets
23
3,562,861
3,504,177
Defined benefit assets, net
13
407,438
160,752
Other non-current assets
20,565
16,569
Total non-current assets
26,256,112
22,736,529
Total assets
₩
35,759,298
32,859,566
See accompanying notes to the consolidated financial statements.
F-7
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Consolidated Statements of Financial Position, Continued
As of December 31, 2023 and 2024
(In millions of won)
Note
December 31, 2023
December 31, 2024
Liabilities
Trade accounts and notes payable
25, 28
₩
4,175,064
4,156,149
Current financial liabilities
12, 25, 26, 27, 28
5,262,295
6,527,450
Other accounts payable
25
2,918,903
1,720,670
Accrued expenses
648,949
634,473
Income tax payable
52,237
65,366
Provisions
14
117,676
105,251
Advances received
15
625,838
904,628
Liabilities held for sale
29
—
1,656,841
Other current liabilities
84,066
88,256
Total current liabilities
13,885,028
15,859,084
Non-current financial liabilities
12, 25, 26, 27, 28
11,439,776
8,091,407
Non-current provisions
14
63,805
60,908
Defined benefit liabilities, net
13
1,559
1,093
Long-term advances received
15
967,050
220,500
Deferred tax liabilities
23
2,069
—
Other non-current liabilities
25
629,467
553,767
Total non-current liabilities
13,103,726
8,927,675
Total liabilities
26,988,754
24,786,759
Equity
Share capital
16
1,789,079
2,500,000
Share premium
16
2,251,113
2,773,587
Retained earnings (Accumulated Deficit)
2,676,014
(18,512)
Reserves
16
515,976
995,823
Accumulated other comprehensive income held for sale
29
—
291,363
Equity attributable to owners of the Parent
7,232,182
6,542,261
Non-controlling interests
1,538,362
1,530,546
Total equity
8,770,544
8,072,807
Total liabilities and equity
₩
35,759,298
32,859,566
See accompanying notes to the consolidated financial statements.
F-8
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (Loss)
For the years ended December 31, 2022, 2023 and 2024
(In millions of won, except earnings per share)
Note
2022
2023
2024
Revenue
17, 28
₩
26,151,781
21,330,819
26,615,347
Cost of sales
7, 18, 28
(25,027,703)
(20,985,643)
(24,039,928)
Gross profit
1,124,078
345,176
2,575,419
Selling expenses
18, 19
(895,602)
(575,785)
(584,692)
Administrative expenses
18, 19
(931,117)
(899,902)
(1,103,617)
Research and development expenses
18
(1,382,406)
(1,379,653)
(1,447,706)
Other income
20
3,185,837
1,472,258
2,100,443
Other expenses
20
(4,446,414)
(1,786,234)
(2,797,981)
Finance income
21
873,059
1,122,294
883,094
Finance costs
21
(966,363)
(1,634,534)
(1,821,912)
Equity in income (loss) of equity accounted investees,
net
5,558
(3,061)
5,412
Loss before income tax
(3,433,370)
(3,339,441)
(2,191,540)
Income tax benefit (expense)
22
237,785
762,712
(217,760)
Loss for the year
(3,195,585)
(2,576,729)
(2,409,300)
Other comprehensive income (loss)
Items that will never be reclassified to profit
or loss
Remeasurements of net defined benefit liabilities
13
122,361
49,817
(131,835)
Other comprehensive income (loss) from associates
8
32
170
(85)
122,393
49,987
(131,920)
See accompanying notes to the consolidated financial statements.
F-9
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (Loss), Continued
For the years ended December 31, 2022, 2023 and 2024
(In millions of won, except earnings per share)
Note
2022
2023
2024
Items that are or may be reclassified to profit
or loss
Foreign currency translation differences for foreign
operations
16
₩
(80,963)
23,143
926,637
Gain on valuation of derivative
16, 22
9,227
—
—
Other comprehensive income (loss) from associates
8, 16
(9,710)
(2,824)
3,320
(81,446)
20,319
929,957
Other comprehensive income for the year, net of
income tax
40,947
70,306
798,037
Total comprehensive loss for the year
₩
(3,154,638)
(2,506,423)
(1,611,263)
Profit (loss) attributable to:
Owners of the Parent Company
(3,071,565)
(2,733,742)
(2,562,606)
Non-controlling interests
(124,020)
157,013
153,306
Loss for the year
₩
(3,195,585)
(2,576,729)
(2,409,300)
Total comprehensive income (loss) attributable to:
Owners of the Parent Company
(3,006,686)
(2,647,407)
(1,923,316)
Non-controlling interests
(147,952)
140,984
312,053
Total comprehensive loss for the year
₩
(3,154,638)
(2,506,423)
(1,611,263)
Loss per share (in won)
Basic loss per share
24
₩
(8,064)
(7,177)
(5,438)
Diluted loss per share
24
(8,064)
(7,177)
(5,438)
See accompanying notes to the consolidated financial statements.
F-10
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
For the years ended December 31, 2022, 2023 and 2024
Attributable to owners of the Parent Company
(In millions of won)
Share
Share
Retained
earnings
Other
comprehensive
income
classified as
Non-
controlling
Total
capital
premium
(Accumulated
deficit)
Reserves
held for sale
Sub-total
interests
equity
Balances at January 1, 2022
₩1,789,079
2,251,113
8,541,521
537,142
—
13,118,855
1,643,646
14,762,501
Total comprehensive income (loss) for the year
Loss for the year
—
—
(3,071,565)
—
—
(3,071,565)
(124,020)
(3,195,585)
Other comprehensive income (loss)
—
—
122,393
(57,514)
—
64,879
(23,932)
40,947
₩
—
—
(2,949,172)
(57,514)
—
(3,006,686)
(147,952)
(3,154,638)
Transaction with owners, recognized directly in equity
Dividends to non-controlling shareholders
in subsidiaries
—
—
—
—
—
—
(56,056)
(56,056)
Dividends to equity holders
(232,580)
—
—
(232,580)
—
(232,580)
Balances at December 31, 2022
₩1,789,079
2,251,113
5,359,769
479,628
—
9,879,589
1,439,638
11,319,227
Balances at January 1, 2023
₩1,789,079
2,251,113
5,359,769
479,628
—
9,879,589
1,439,638
11,319,227
Total comprehensive income (loss) for the year
Profit (loss) for the year
—
—
(2,733,742)
—
—
(2,733,742)
157,013
(2,576,729)
Other comprehensive income (loss)
—
—
49,987
36,348
—
86,335
(16,029)
70,306
₩
—
—
(2,683,755)
36,348
—
(2,647,407)
140,984
(2,506,423)
Transaction with owners, recognized directly in equity
Dividends to non-controlling shareholders
in subsidiaries
—
—
—
—
—
—
(42,260)
(42,260)
Dividends to equity holders
—
—
—
—
—
—
—
—
Balances at December 31, 2023
₩1,789,079
2,251,113
2,676,014
515,976
—
7,232,182
1,538,362
8,770,544
F-11
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Consolidated Statements of Changes in Equity, Continued
For the years ended December 31, 2022, 2023 and 2024
Attributable to owners of the Parent Company
(In millions of won)
Share
Share
Retained
earnings
Other
comprehensive
income
classified as
Non-
controlling
Total
capital
premium
(Accumulated
deficit)
Reserves
held for sale
Sub-total
interests
equity
Balances at January 1, 2024
₩ 1,789,079
2,251,113
2,676,014
515,976
—
7,232,182
1,538,362
8,770,544
Total comprehensive income (loss) for the year
Profit (loss) for the year
—
—
(2,562,606)
—
—
(2,562,606)
153,306
(2,409,300)
Other comprehensive income (loss)
—
—
(131,920)
479,847
291,363
639,290
158,747
798,037
₩
—
—
(2,694,526)
479,847
291,363
(1,923,316)
312,053
(1,611,263)
Transaction with owners, recognized directly
inequity
Capital increase
710,921
569,893
—
—
—
1,280,814
—
1,280,814
Acquisition of non-controlling shareholders'
interests in subsidiaries
—
(47,419)
—
—
—
(47,419)
(183,850)
(231,269)
Subsidiaries' dividends distributed to non-
controlling interests
—
—
—
—
—
—
(136,019)
(136,019)
Balances at December 31, 2024
₩ 2,500,000
2,773,587
(18,512)
995,823
291,363
6,542,261
1,530,546
8,072,807
See accompanying notes to the consolidated financial statements.
F-12
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the years ended December 31, 2022, 2023 and 2024
(In millions of won)
Note
2022
2023
2024
Cash flows from (used in) operating activities:
Cash generated from operations
27
₩
3,588,627
2,819,329
3,373,456
Income taxes paid
(153,969)
(290,102)
(139,782)
Interests received
77,219
144,402
93,945
Interests paid
(500,857)
(990,881)
(915,858)
Cash flows from operating activities
3,011,020
1,682,748
2,411,761
Cash flows from (used in) investing activities:
Dividends received
₩
4,461
15,200
200
Increase in deposits in banks
(1,769,668)
(943,166)
(1,700)
Proceeds from withdrawal of deposits in banks
756,267
1,785,231
921,995
Acquisition of financial assets at fair value through profit or
loss
(27,100)
(4,615)
(5,470)
Proceeds from disposal of financial asset at fair value
through profit or loss
412
546
5,301
Acquisition of financial assets at fair value through other
comprehensive income
(3,934)
(3,000)
—
Proceeds from disposal of financial assets at fair value
through other comprehensive income
3,547
2,671
—
Proceeds from disposal of investments in associates
4,800
—
17,609
Acquisition of property, plant and equipment
(5,079,279)
(3,482,754)
(2,129,735)
Proceeds from disposal of property, plant and equipment
171,421
485,659
248,460
Acquisition of intangible assets
(830,583)
(672,076)
(786,819)
Proceeds from disposal of intangible assets
11,392
6,328
6,257
Proceeds from insurance payout
—
—
49,995
Government grants received
57,503
7,417
2,307
Proceeds from settlement of derivatives
49,145
178,610
274,173
Decrease in short-term loans
9,608
27,411
19,697
See accompanying notes to the consolidated financial statements.
F-13
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
For the years ended December 31, 2022, 2023 and 2024
(In millions of won)
Note
2022
2023
2024
Cash flows from (used in) investing activities, Continued:
Increase in short-term loans
₩
(9,643)
—
—
Increase in long-term loans
(54,033)
—
—
Increase in deposits
(2,676)
(3,992)
(2,036)
Decrease in deposits
6,727
4,535
2,124
Proceeds from disposal of greenhouse gas emission permits
1,464
6,659
14,394
Cash flows used in investing activities
27
(6,700,169)
(2,589,336)
(1,363,248)
Cash flows from (used in) financing activities:
Proceeds from short-term borrowings
₩ 4,487,824
6,729,725
5,219,941
Repayments of short-term borrowings
(2,565,541)
(7,446,111)
(6,285,819)
Proceeds from issuance of bonds
443,230
469,266
—
Repayments of bonds
(1,514,790)
(433,990)
(370,000)
Proceeds from long-term borrowings
4,165,508
4,765,524
2,912,552
Repayments of current portion of long-term borrowings
(2,695,125)
(2,625,970)
(3,638,904)
Dividends paid
(232,580)
—
—
Payment of lease liabilities
(82,296)
(73,483)
(71,008)
Capital increase
—
—
1,292,455
Transaction cost from capital increase
—
—
(11,641)
Acquisition of non-controlling shareholders' interests in
subsidiaries
—
—
(245,362)
Dividends to non-controlling shareholders in subsidiaries
(60,206)
(34,098)
(136,519)
Cash flows from (used in) financing activities
1,946,024
1,350,863
(1,334,305)
See accompanying notes to the consolidated financial statements.
F-14
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
For the years ended December 31, 2022, 2023 and 2024
(In millions of won)
Note
2022
2023
2024
Net increase (decrease) in cash and cash equivalents
₩ (1,743,125)
444,275
(285,792)
Cash and cash equivalents at January 1
3,541,597
1,824,649
2,257,522
Effect of exchange rate fluctuations on cash held
26,177
(11,402)
208,325
Cash and cash equivalents included in assets held for sale
—
—
(158,415)
Cash and cash equivalents at December 31
₩
1,824,649
2,257,522
2,021,640
See accompanying notes to the consolidated financial statements.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-15
1.
Reporting Entity
(a)
Description of the Parent Company
LG Display Co., Ltd. (the " Parent Company ") was incorporated in February 1985 and the Parent Company is a public
corporation listed in the Korea Exchange since 2004. The main business of the Parent Company and its subsidiaries (the
“Group”) is to manufacture and sell displays and its related products. As of December 31, 2024, the Group is operating Thin
Film Transistor Liquid Crystal Display (“TFT-LCD”) and Organic Light Emitting Diode (“OLED”) panel manufacturing
plants in Gumi, Paju and China and TFT-LCD and OLED module manufacturing plants in Gumi, Paju, China and Vietnam.
The Parent Company is domiciled in the Republic of Korea with its address at 128 Yeoui-daero, Yeongdeungpo-gu, Seoul,
Republic of Korea. As of December 31, 2024, LG Electronics Inc., a major shareholder of the Parent Company, owns 36.72%
(183,593,206 shares) of the Parent Company’s common stock.
As of December 31, 2024, 500,000,000 shares of the Parent Company's common stock are listed on Korea Exchange under
the identifying code 034220, and 20,944,314 American Depository Shares ("ADSs", 2 ADSs represent one share of common
stock) are listed on the New York Stock Exchange under the symbol "LPL".
(b)
Consolidated Subsidiaries as of December 31, 2024
(In millions)
Subsidiaries
Location
Percentage of
ownership(%)
Closing month
Date of
incorporation
Business
LG Display America, Inc.
San Jose,U.S.A.
100
December
September 24,
1999
Sales of display products
LG Display Germany GmbH
Eschborn,
Germany
100
December
October 15,
1999
Sales of display products
LG Display Japan Co., Ltd.
Tokyo, Japan
100
December
October 12,
1999
Sales of display products
LG Display Taiwan Co., Ltd.
Taipei, Taiwan
100
December
April 12, 1999
Sales of display products
LG Display Nanjing Co., Ltd.
Nanjing, China
100
December
July 15, 2002
Production of display products
LG Display Shanghai Co., Ltd.
Shanghai,
China
100
December
January 16,
2003
Sales of display products
LG Display Guangzhou Co.,
Ltd.(*1)
Guangzhou,
China
100
December
June 30, 2006
Production of display products
LG Display Shenzhen Co., Ltd.
Shenzhen,
China
100
December
July 27, 2007
Sales of display products
LG Display Singapore Pte. Ltd.
Singapore
100
December
November 4,
2008
Sales of display products
L&T Display Technology
(Fujian) Limited
Fujian, China
51
December
December 7,
2009
Production and sales of LCD module
and LCD monitor sets
LG Display Yantai Co., Ltd.
Yantai, China
100
December
March 17, 2010
Production of display products
Nanumnuri Co., Ltd.
Gumi, South
Korea
100
December
March 21, 2012
Business facility maintenance
LG Display (China) Co.,
Ltd.(*1)(*2)
Guangzhou,
China
80
December
December 10,
2012
Production and sales of display products
Unified Innovative
Technology, LLC
Wilmington,
U.S.A.
100
December
March 12, 2014
Intellectual property management
LG Display Guangzhou
Trading Co., Ltd.
Guangzhou,
China
100
December
April 28, 2015
Sales of display products
Global OLED Technology, LLC
Sterling, U.S.A.
100
December
December 18,
2009
OLED intellectual property management
LG Display Vietnam Haiphong
Co., Ltd.
Haiphong,
Vietnam
100
December
May 5, 2016
Production and sales of display products
Suzhou Lehui Display Co., Ltd.
Suzhou, China
100
December
July 1, 2016
Production and sales of LCD module
and LCD monitor sets
LG DISPLAY FUND I LLC(*3)
Wilmington,
U.S.A.
100
December
May 1, 2018
Investment in venture business and
technologies
LG Display High-Tech
(China) Co., Ltd.
Guangzhou, China
70
December
July 11, 2018
Production and sales of display products
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-16
1.
Reporting Entity, Continued
(b)
Consolidated Subsidiaries as of December 31, 2024, Continued
(*1) For the year ended December 31, 2024, the contract to sell 80% of its stake in LG Display (China) Co., Ltd. and 100%
of its stake in LG Display Guangzhou Co., Ltd. was signed. As a result, the assets and liabilities held by LG Display
(China) Co., Ltd. and LG Display Guangzhou Co., Ltd. are presented as assets and liabilities held for sale.
(*2) For the year ended December 31, 2024, the Group acquired 10% equity interests in LG Display (China) Co., Ltd. for
W245,362 million from non-controlling shareholders.
(*3) For the year ended December 31, 2024, the Parent Company contributed W6,831 million in cash for the capital increase
of LG DISPLAY FUND I LLC. There was no change in the Parent Company’s percentage of ownership in LG
DISPLAY FUND I LLC as a result of this additional investment.
(c) Information of subsidiaries (before elimination of intercompany transactions) which have material non-controlling
interests as of and for the years ended December 31, 2022, 2023 and 2024 are as follows:
(In millions of won)
2022
LG Display
High-Tech
(China) Co., Ltd.
Percentage of ownership in non-controlling interests (%)
30
Current assets
₩
2,112,295
Non-current assets
3,546,253
Current liabilities
820,041
Non-current liabilities
2,323,249
Net assets
2,515,258
Book value of non-controlling interests
753,191
Revenue
₩
2,766,043
Loss for the year
(561,016)
Loss attributable to non-controlling interests
(168,474)
Cash flows from operating activities
₩
153,043
Cash flows from investing activities
424,405
Cash flows used in financing activities
(455,746)
Effect of exchange rate fluctuations on cash and cash equivalents
(7,471)
Net increase in cash and cash equivalents
114,231
Cash and cash equivalents at January 1
39,330
Cash and cash equivalents at December 31
153,561
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-17
1.
Reporting Entity, Continued
(In millions of won)
2023
LG Display
High-Tech
(China) Co., Ltd.
Percentage of ownership in non-controlling interests (%)
30
Current assets
₩
3,796,310
Non-current assets
2,621,361
Current liabilities
978,596
Non-current liabilities
2,586,633
Net assets
2,852,442
Book value of non-controlling interests
854,346
Revenue
₩
2,432,838
Profit for the year
374,836
Profit attributable to non-controlling interests
112,451
Cash flows from operating activities
₩
777,354
Cash flows used in investing activities
(979,167)
Cash flows from financing activities
365,898
Effect of exchange rate fluctuations on cash and cash equivalents
(3,571)
Net increase in cash and cash equivalents
160,514
Cash and cash equivalents at January 1
153,561
Cash and cash equivalents at December 31
314,075
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-18
1.
Reporting Entity, Continued
(In millions of won)
2024
LG Display
High-Tech
(China) Co., Ltd.
Percentage of ownership in non-controlling interests (%)
30
Current assets
₩
5,666,246
Non-current assets
1,964,675
Current liabilities
2,193,788
Non-current liabilities
1,806,321
Net assets
3,630,812
Book value of non-controlling interests
1,087,857
Revenue
₩
2,482,999
Profit for the year
432,402
Profit attributable to non-controlling interests
129,721
Cash flows from operating activities
₩
1,252,886
Cash flows used in investing activities
(1,290,367)
Cash flows used in financing activities
(213,400)
Effect of exchange rate fluctuations on cash and cash equivalents
19,378
Net decrease in cash and cash equivalents
(231,503)
Cash and cash equivalents at January 1
314,075
Cash and cash equivalents at December 31
82,572
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-19
2.
Basis of Presenting Financial Statements
(a)
Application of accounting standards
These consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (“IFRS”) Accounting Standards as issued by the International Accounting Standards Board.
The consolidated financial statements were authorized for issuance by the Group's management on April 17,
2025.
(b)
Basis of Measurement
The consolidated financial statements have been prepared on the historical cost basis except for the following
material items in the consolidated statement of financial position:
▪
derivative financial instruments at fair value, financial assets at fair value through profit or loss
(“FVTPL”), financial assets at fair value through other comprehensive income (“FVOCI”), financial
liabilities at fair value through profit or loss (“FVTPL”), and
▪
net defined benefit liabilities (defined benefit assets) recognized at the present value of defined benefit
obligations less the fair value of plan assets
(c)
Functional and Presentation Currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the
primary economic environment in which each entity operates (the “functional currency"). The consolidated
financial statements are presented in Korean won, which is the Parent Company’s functional and presentation
currency.
(d)
Estimates and Judgments
As the resulting accounting estimates will, by definition, seldom equal the related actual results, it can contain a
significant risk of causing a material adjustment.
Estimates and assumptions are continuously evaluated and taken into account future events that are reasonably
predictable in light of past experiences and current situations. Changes in accounting estimates are recognized
during the period which the estimates have been changed and the future period to be affected.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are discussed below. Additional information of
significant judgement and assumptions of certain items are included in relevant notes.
(i)
Impairment of goodwill, etc.
The recoverable amount of a cash generating unit (CGU) is determined based on value-in-use calculations (Note
10).
(ii)
Income Tax
The Group’s taxable income generated from these operations are subject to income taxes based on tax laws and
interpretations of tax authorities in numerous jurisdictions. There are many transactions and calculations for
which the ultimate tax determination is uncertain. The Group estimates the income tax effects expected to be
incurred in the future as a result of its operating activities up to the end of the reporting period, and recognizes
them as current and deferred income taxes. However, the actual future income tax burden may not match the
recognized related assets and liabilities, and such differences may affect the current and deferred income tax
assets and liabilities at the time the expected income tax effects are realized.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-20
2.
Basis of Presenting Financial Statements Continued
(d)
Estimates and Judgments Continued
In addition, deferred tax assets are recognized to the extent that it is probable that taxable income will be
generated during the periods when temporary differences, unused tax losses, and tax credits are realized.
Significant judgments are made to determine the book value of deferred tax assets that can be recognized based
on the timing and level of future taxable income.
(iii)
Net defined benefit liabilities (defined benefit assets)
The present value of defined benefit obligations can vary depending on various factors determined by actuarial
methods. The assumptions applied to determine the net cost (profit) of retirement benefits include the discount
rate, which represents the interest rate that should be applied to determine the present value of the estimated
future cash outflows expected to occur upon the settlement of defined benefit obligations. An appropriate
discount rate is determined by considering the yield on high-quality corporate bonds with maturities similar to
the duration of the related pension liabilities, expressed in the currency in which the pension is paid. Other key
assumptions related to defined benefit obligations are based on current market conditions.
3.
Material Accounting Policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise stated.
(a)
Consolidation
(i)
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed, or has right
to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. The financial statements of subsidiaries are included in the consolidated financial
statements from the date on which control is acquired until the date on which control is lost.
(ii)
Non-controlling interests
Non-controlling interests (“NCI”) are measured at their proportionate share of the acquiree’s identifiable net
assets at the acquisition date. Profit or loss and other comprehensive income (loss) of subsidiaries are attributed
to owners of the Parent Company and non-controlling interests.
Changes in the Group’s interest in subsidiaries that do not result in a loss of control are accounted for as equity
transactions.
(iii)
Loss of Control
If the Parent Company loses control of subsidiaries, the Parent Company derecognizes the assets and liabilities
of the former subsidiaries from the consolidated statement of financial position and recognizes the gain or loss
associated with the loss of control attributable to the former controlling interest. Meanwhile, the Parent Company
recognizes any investment retained in the former subsidiaries at its fair value when control is lost.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-21
3.
Material Accounting Policies, Continued
(a)
Consolidation, Continued
(iv)
Associates and joint ventures (equity method investees)
Associates are those entities in which the Group has significant influence, but not control or joint control, over
the financial and operating policies. A joint venture is an arrangement in which the parties have joint control,
whereby the parties have rights to the net assets of the arrangement, rather than rights to its assets and obligations
for its liabilities.
Investments in associates and joint ventures are initially recognized at cost and subsequently accounted for using
the equity method of accounting. The carrying amount of investments in associates and joint ventures is
increased or decreased to recognize the Group's share of the profits or losses and changes in the Group's
proportionate interest of the investee after the date of acquisition. Distributions received from an investee reduce
the carrying amount of the investment.
If an associate or a joint venture uses accounting policies different from those of the Parent Company for like
transactions and events in similar circumstances, appropriate adjustments are made to the consolidated financial
statements. As of and during the periods presented in the consolidated financial statements, no adjustments were
made in applying the equity method.
When the Group’s share of losses exceeds its interest in an equity accounted investee, the carrying amount of
that interest, including any long-term investments, is reduced to nil, and the recognition of further losses is
discontinued except to the extent that the Group has an obligation or has made payments on behalf of the
investee.
(v)
Transactions eliminated on consolidation
Intra-group balances and transactions, including income and expenses and any unrealized income and expenses
and balance of trade accounts and notes receivable and payable arising from intra-group transactions, are
eliminated. Unrealized gains arising from transactions with equity accounted investees are eliminated against
the investment to the extent of the Group’s interest in the investee. Unrealized losses are eliminated in the same
way as unrealized gains, but only to the extent that there is no evidence of impairment.
(b)
Foreign Currency Translation
Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at
exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies
are translated to the functional currency at the exchange rate on the reporting date. Non-monetary assets and
liabilities denominated in foreign currencies that are measured at fair value are translated to the functional
currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising
on translation are recognized in profit or loss, except for differences arising on an investment in equity
instruments designated as at FVOCI and a financial asset and liability designated as a cash flow hedge, which
are recognized in other comprehensive income. Exchange differences arising on the settlement of monetary
items or on translating monetary items at rates different from those at which they were translated on initial
recognition are recognized in profit or loss in the period in which they arise. Foreign currency differences arising
from assets and liabilities in relation to the investing and financing activities including borrowings, bonds and
cash and cash equivalents are recognized in finance income (costs) in the consolidated statement of
comprehensive income (loss) and foreign currency differences arising from assets and liabilities in relation to
activities other than investing and financing activities are recognized in other non-operating income (expense)
in the consolidated statement of comprehensive income (loss). Foreign currency differences are presented in
gross amounts in the consolidated statement of comprehensive income (loss).
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-22
3.
Material Accounting Policies, Continued
(b)
Foreign Currency Translation Continued
If the presentation currency of the Group is different from a foreign operation’s functional currency, the financial
position and financial performance of the foreign operation are translated into the presentation currency using
the following methods. The assets and liabilities of foreign operations, whose functional currency is not the
currency of a hyperinflationary economy are translated to the Group’s functional currency at exchange rates at
the reporting date. The income and expenses of foreign operations are translated to the Group’s functional
currency at exchange rates at the dates of the transactions and foreign currency differences are recognized in
other comprehensive income (loss). Relevant proportionate shares of foreign currency differences are allocated
to the controlling interests and non-controlling interests. When a foreign operation is disposed of in its entirety
or partially such that control, significant influence or joint control is lost, the cumulative amount in the translation
reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. If
the Group disposes part of its interest in a subsidiary but retains control, then the relevant proportion of the
cumulative amount is reattributed to NCI. When the Group disposes of only part of an associate or joint venture
while retaining significant influence or joint control, the relevant proportion of the cumulative amount is
reclassified to profit or loss.
Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying
amounts of assets and liabilities arising on the acquisition of that foreign operation is treated as assets and
liabilities of the foreign operation. Thus, they are expressed in the functional currency of the foreign operation
and translated at the at each reporting date’s exchange rate.
(c)
Cash and cash equivalents
Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original
maturity of three months or less that are readily convertible into known amounts of cash.
(d)
Inventories
Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the
weighted-average method, and includes expenditures incurred in acquiring the inventories, production or
conversion costs and other costs incurred in bringing them to their existing location and condition. Net realizable
value is the estimated selling price in the ordinary course of business less the estimated costs of completion and
the estimated selling expenses. In the case of manufactured inventories and work-in-process, cost includes an
appropriate share of production overheads based on the actual capacity of production facilities. However, the
normal capacity is used for the allocation of fixed production overheads if the actual level of production is lower
than the normal capacity.
(e)
Financial Instruments
(i)
Non-derivative financial assets
Recognition and initial measurement
Trade receivables and debt instruments issued are initially recognized when they are originated. All other
financial assets are recognized in statement of financial position when, and only when, the Group becomes a
party to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) is initially measured
at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or
issue. A trade receivable without a significant financing component is initially measured at the transaction price.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-23
3.
Material Accounting Policies, Continued
(e)
Financial Instruments, Continued
Classification and subsequent measurement
i)
Financial assets
On initial recognition, a financial asset is classified as measured at: financial assets at amortized cost; financial
assets at FVOCI; financial assets at FVTPL. Financial assets are not reclassified subsequent to their initial
recognition unless the Group changes its business model for managing financial assets, in which case all affected
financial assets are reclassified on the first day of the subsequent reporting period following the change in the
business model.
A financial asset is measured as at amortized cost if it meets both of the following conditions and is not
designated as at FVTPL:
-
it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
-
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at
FVTPL:
-
it is held within a business model whose objective is achieved by both collecting contractual cash flows
and selling financial assets; and
-
the contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
For investments in equity instruments that are not held for trading, this will depend on whether the Group has
made an irrevocable election at the time of initial recognition to account for the equity investment at fair value
through other comprehensive income.
All financial assets not classified as measured at amortized cost or FVOCI as described above are measured as
at FVTPL. This includes all derivative financial assets. At initial recognition, the Group may irrevocably
designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI
as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
ii)
Financial assets: business model
The Group makes an assessment of the objective of the business model in which a financial asset is held at a
portfolio level because this best reflects the way the business is managed and information is provided to
management. The information considered includes:
-
the stated policies and objectives for the portfolio and the operation of those policies in practice (these
include whether management’s strategy focuses on earning contractual interest income, maintaining a
particular interest rate profile, matching the duration of the financial assets to the duration of any related
liabilities or expected cash outflows or realizing cash flows through the sale of the assets);
-
how the performance of the portfolio is evaluated and reported to the Group’s management;
-
the risks that affect the performance of the business model (and the financial assets held within that
business model) and how those risks are managed; and
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-24
3.
Material Accounting Policies, Continued
(e)
Financial Instruments, Continued
-
the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales
and expectations about future sales activity.
Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not
considered sale for this purpose.
A financial asset that is held for trading or is managed and whose performance is evaluated on a fair value basis
is measured at FVTPL.
iii)
Financial assets: Assessment whether contractual cash flows are solely payments of principal and interest
For the purpose of the assessment, “principal” is defined as the fair value of the financial asset on initial
recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated
with the principal amount outstanding during a particular period of time and for other basic lending risks and
cost (e.g. liquidity risk and administrative costs), as well as profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers
the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual
term that could change the timing or amount of contractual cash flows such that it would not meet this condition.
In making this assessment, the Group considers:
-
contingent events that would change the amount or timing of cash flows:
-
terms that may adjust the contractual coupon rate, including variable-rate features;
-
prepayment and extension features; and
-
terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features)
A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment
amount substantially represents unpaid amounts of principal and interest or the principal amount outstanding,
which may include reasonable additional compensation for early termination of the contract.
Additionally, for a financial asset acquired at a discount or premium to its contractual par amount, a feature that
permits or requires prepayment at an amount that substantially represents the contractual par amount plus
accrued but unpaid contractual interest (which may also include reasonable additional compensation for early
termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant
at initial recognition.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-25
3.
Material Accounting Policies, Continued
(e)
Financial Instruments, Continued
iv)
Financial assets: Subsequent measurement and gains and losses
Financial assets at
FVTPL
These assets are subsequently measured at fair value. Net gains and losses,
including any interest or dividend income, are recognized in profit or loss.
Financial assets at
amortized cost
These assets are subsequently measured at amortized cost using the effective
interest method. The amortized cost is reduced by impairment losses. Interest
income, foreign exchange gains and losses and impairment are recognized in profit
or loss. Any gain or loss on derecognition is recognized in profit or loss.
Debt investments at
FVOCI
These assets are subsequently measured at fair value. Interest income calculated
using the effective interest method, foreign exchange gains and losses and
impairment are recognized in profit or loss. Other net gains and losses are
recognized in OCI. On derecognition, gains and losses accumulated in OCI are
reclassified to profit or loss.
Derecognition
The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, it
transfers the rights to receive the contractual cash flows of the financial asset in a transaction in which
substantially all the risks and rewards of ownership of the financial asset are transferred, or it transfers or does
not retain substantially all the risks and rewards of ownership of a transferred asset, and does not retain control
of the transferred asset.
If the Group has retained substantially all the risks and rewards of ownership of the transferred asset, the Group
continues to recognize the transferred asset.
(ii)
Non-derivative financial liabilities
The Group classifies financial liabilities into two categories, financial liabilities at FVTPL and other financial
liabilities in accordance with the substance of the contractual arrangement and the definitions of financial
liabilities, and recognizes them in the consolidated statement of financial position when the Group becomes a
party to the contractual provisions of the instrument.
Financial liabilities at FVTPL include financial liabilities held for trading and designated as such upon initial
recognition at FVTPL. After initial recognition, financial liabilities at FVTPL are measured at fair value, and
changes therein are recognized in profit or loss. Upon initial recognition, transaction costs that are directly
attributable to the issuance of financial liabilities are recognized in profit or loss as incurred.
Non-derivative financial liabilities other than financial liabilities classified as at FVTPL are classified as other
financial liabilities and measured initially at fair value minus transaction costs that are directly attributable to
the issuance of financial liabilities. Subsequent to initial recognition, these financial liabilities are measured at
amortized cost using the effective interest method. As of December 31, 2024, non-derivative financial liabilities
comprise borrowings, bonds, trade accounts and notes payable, other accounts payable and others.
The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or
expired.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-26
3.
Material Accounting Policies, Continued
(e)
Financial Instruments, Continued
(iii)
Derivative financial instruments
Derivatives are initially recognized at fair value. Subsequent to initial recognition, derivatives are measured at
fair value, and changes therein are accounted for as described below.
Hedge Accounting
If necessary, the Group designates derivatives as hedging items to hedge the risk of changes in the fair value of
assets, liabilities or firm commitments (a fair value hedge) and foreign currency risk of highly probable
forecasted transactions or firm commitments (a cash flow hedge).
On initial designation of the hedge, the Group’s management formally designates and documents the relationship
between the hedging instrument(s) and hedged item(s), including the risk management objectives and strategy
in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of
the hedging relationship, both at the inception of the hedge relationship as well as on an ongoing basis.
i)
Fair value hedges
Change in the fair value of a derivative hedging instrument designated as a fair value hedge and the hedged item
is recognized in profit or loss, respectively. The gain or loss from remeasuring the hedging instrument at fair
value and the gain or loss on the hedged item attributable to the hedged risk are recognized in profit or loss in
the same line item of the statement of comprehensive income (loss). The Group discontinues fair value hedge
accounting if the hedging instrument expires or is sold, terminated or exercised; or if the hedge no longer meets
the criteria for hedge accounting.
ii)
Cash flow hedges
When a derivative designated as a cash flow hedging instrument meets the criteria of cash flow hedge
accounting, the effective portion of changes in the fair value of the derivative is recognized in other
comprehensive income and the ineffective portion of changes in the fair value of the derivative is recognized in
profit or loss. The Group discontinues cash flow hedge accounting if the hedging instruments expires or is sold,
terminated or exercised; or if the hedge no longer meets the criteria for hedge accounting. The cumulative gain
or loss on the hedging instrument that has been recognized in other comprehensive income is reclassified to
profit or loss in the periods during which the forecasted transaction occurs. If the forecasted transaction is no
longer expected to occur, then the balance in other comprehensive income is recognized immediately in profit
or loss.
Embedded derivative
Embedded derivatives are separated from the host contract and accounted for separately if the host contract is
not a financial asset and certain criteria are met.
Other derivative financial instruments
Other derivative financial instruments are measured at fair value and changes of their fair value are recognized
in profit or loss.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-27
3.
Material Accounting Policies, Continued
(f)
Property, Plant and Equipment
(i)
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses. Cost includes an expenditure that is directly attributable to the acquisition of the asset. The
cost of self-constructed assets includes the cost of materials and direct labor, any costs directly attributable to
bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items
and restoring the site on which they are located and borrowing costs on qualifying assets.
The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the
difference between the net disposal proceeds, if any, and the carrying amount of the item and recognized in other
non-operating income or other non-operating expenses.
(ii)
Subsequent costs
Subsequent expenditure on an item of property, plant and equipment is recognized as part of its cost only if it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item
can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognized
in profit or loss as incurred.
(iii)
Depreciation
Land is not depreciated and depreciation of other items of property, plant and equipment is recognized in profit
or loss on a straight-line basis, reflecting the pattern in which the asset's future economic benefits are expected
to be consumed by the Group. The residual value of property, plant and equipment is zero.
Typical estimated useful lives of the assets are as follows:
Typical estimated
useful lives (years)
Buildings and structures
20~40
Machinery
4, 5
Furniture and fixtures
4
Equipment, tools and vehicles
2, 4, 12
Right-of-use assets
(*)
(*) The Group depreciates the right-of-use assets from the commencement date to the earlier of the end of the
useful life of the right-of-use asset or the end of the lease term.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-28
3.
Material Accounting Policies, Continued
(f)
Property, Plant and Equipment, Continued
Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if
appropriate and any changes are accounted for as changes in accounting estimates.
(g)
Borrowing Costs
The Group capitalizes borrowing costs, which includes interests and exchange differences arising from foreign
currency borrowings to the extent that they are regarded as an adjustment to interest costs, directly attributable
to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. A qualifying
asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. To the
extent that the borrowings are directly attributable to the purpose of obtaining a qualifying asset, the Group
determines the amount of borrowing costs eligible for capitalization as the actual borrowing costs incurred on
that borrowing during the period less any investment income on the temporary investment of those borrowings.
The Group immediately recognizes other borrowing costs as an expense.
(h)
Government Grants
In case there is reasonable assurance that the Group will comply with the conditions attached to a government
grant, the government grant is recognized as follows:
(i)
Grants related to the purchase or construction of assets
A government grant related to the purchase or construction of assets is deducted in calculating the carrying
amount of the asset. The grant is recognized in profit or loss over the life of a depreciable asset as a reduced
depreciation expense and cash related to grant received is presented in investing activities in the statement of
cash flows.
(ii)
Grants for compensating the Group’s expenses incurred
A government grant that compensates the Group for expenses incurred is recognized in profit or loss as a
deduction from relevant expenses on a systematic basis in the periods in which the expenses are recognized.
(iii)
Other government grants
A government grant that becomes receivable for the purpose of giving immediate financial support to the Group
with no compensation for expenses or losses already incurred or no future related costs is recognized as other
non-operating income of the period in which it becomes receivable.
(i)
Intangible Assets
Intangible assets are initially measured at cost. Subsequently, intangible assets are measured at cost less
accumulated amortization and accumulated impairment losses.
(i)
Goodwill
Goodwill arising from business combinations is recognized as the excess of the acquisition cost of a business
over the net fair value of the identifiable assets acquired and liabilities assumed. Any deficit is a bargain purchase
that is recognized in profit or loss. Goodwill is measured at cost less accumulated impairment losses.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-29
3.
Material Accounting Policies, Continued
(i)
Intangible Assets, Continued
(ii)
Research and development
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical
knowledge and understanding, is recognized in profit or loss as incurred. Development activities involve a plan
or design of the production of new or substantially improved products and processes. Development expenditure
is capitalized as intangible assets only if the Group can demonstrate all of the following:
-
the technical feasibility of completing the intangible asset so that it will be available for use or sale,
-
its intention to complete the intangible asset and use or sell it,
-
its ability to use or sell the intangible asset,
-
how the intangible asset will generate probable future economic benefits (among other things, the Group
can demonstrate the usefulness of the intangible asset by existence of a market for the output of the
intangible asset or the intangible asset itself if it is to be used internally),
-
the availability of adequate technical, financial and other resources to complete the development and to
use or sell the intangible asset, and
-
its ability to measure reliably the expenditure attributable to the intangible asset during its development.
Development projects are divided into research activities and development activities. Expenditures on research
activities are recognized in profit or loss and qualifying development expenditures on development activities are
capitalized.
The expenditure capitalized includes the cost of materials, direct labor and overhead costs that are directly
attributable to preparing the asset for its intended use and borrowing costs on qualifying assets.
(iii)
Other intangible assets
Other intangible assets include intellectual property rights, software, customer relationships, technology,
memberships and others. The Group currently has a number of patent license agreements related to product
production. When the amount of payments is determined, it is recognized as intangible assets as intellectual
property rights and other account payables, respectively, and the intangible assets are amortized on a straight-
line basis over the patent license period.
(iv)
Subsequent costs
Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in the
specific intangible asset to which they relate. All other expenditures, including expenditures on internally
generated goodwill and brands, are recognized in profit or loss as incurred.
(v)
Amortization
Amortization is calculated on a straight-line basis over the estimated useful lives of intangible assets, other than
goodwill, from the date that they are available for use. The residual value of intangible assets is zero. However,
as there are no foreseeable limits to the periods over which condominium and golf club memberships are
expected to be available for use, these intangible assets are regarded as having indefinite useful lives and not
amortized.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-30
3.
Material Accounting Policies, Continued
(i)
Intangible Assets, Continued
Typical estimated useful lives of the intangible assets are as follows:
Typical estimated
useful lives (years)
Intellectual property rights
5, 10, (*1)
Software
4, (*1)
Technology
10
Development costs
(*2)
Condominium and golf club memberships
Indefinite
(*1) Patent royalty (included in intellectual property rights) and software license are amortized over the useful
lives considering the contract period.
(*2) Capitalized development costs are amortized over the useful lives considering the life cycle of the developed
products.
Amortization periods and the amortization methods for intangible assets with finite useful lives are reviewed at
each financial year-end. The useful lives of intangible assets with indefinite useful lives are reviewed at each
financial year-end to determine whether events and circumstances continue to support indefinite useful life
assessments for those assets. If appropriate, the changes are accounted for as changes in accounting estimates.
(j)
Investment Property
Property held to earn rentals or for capital appreciation or both is classified as investment property. Investment
properties are initially measured at cost, including transaction costs incurred at the time of acquisition, and
subsequently, measured at cost less accumulated depreciation and accumulated impairment loss.
Subsequent expenditure on an item of investment property is recognized as part of its cost only if it is probable
that future economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. The carrying amount of those parts that are replaced is derecognized. All other subsequent
expenditures are expensed in the period in which it is incurred.
Among investment properties, land is not depreciated, and investment properties except land are depreciated on
a straight-line basis by applying 20 years of the building according to the economic depreciation period.
Depreciation methods, useful lives and residual values of investment properties are reviewed at each reporting
period-end and if appropriate, the changes are accounted for as changes in accounting estimates.
(k)
Impairment
(i)
Financial assets
Financial instruments
The Group recognizes loss allowance for financial assets measured at amortized cost and debt investments at
FVOCI at the ‘expected credit loss’ (ECL).
The Group recognizes a loss allowance for the life-time expected credit losses except for following, which are
measured at 12-month ECLs:
-
debt instruments that are determined to have low credit risk at the reporting date; and
-
other debt instruments and bank deposits for which credit risk (i.e. the risk of default occurring over the
expected life of the financial instrument) has not increased significantly since initial recognition.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-31
3.
Material Accounting Policies, Continued
(k)
Impairment, Continued
When determining whether the credit risk of a financial asset has increased significantly since initial recognition
and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and
available without undue cost or effort. This includes both qualitative and quantitative information and analysis,
based on the Group’s historical experience and informed credit assessment including forward-looking
information.
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial
instrument.
12-month ECLs are the portion of the ECLs that result from default events that are possible within the 12 months
after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the
Group is exposed to credit risk.
Estimation of expected credit losses
Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured using the
present value of the difference between the contractual cash flows and the expected contractual cash flows. The
expected credit losses are discounted using effective interest rate of the financial assets.
Credit-impaired financial assets
At each reporting period-end, the Group assesses whether financial assets carried at amortized cost and debt
instruments at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that
have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable data:
-
significant financial difficulty of the issuer or the borrower;
-
the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty,
having granted to the borrower a concession(s) that the lender(s) would not otherwise consider;
-
it is probable that the borrower will enter bankruptcy or other financial reorganization; or
-
the disappearance of an active market for a security because of financial difficulties.
Presentation of loss allowance for ECL in the consolidated statement of financial position
Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of
the assets. For debt instruments at FVOCI, the loss allowance is charged to profit or loss and is recognized in
OCI instead of reducing the carrying amount of financial assets in the consolidated statement of financial
position.
Write-off
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations for
recovering the financial asset in its entirety or a portion thereof. The Group assess whether there are reasonable
expectations of recovering the contractual cash flows from customers and individually assess the timing and
amount of write-off. The Group expects no significant recovery from the amount written-off. However, financial
assets that are written off could still be subject to enforcement activities in order to comply with the Group’s
procedures for recovery of amounts due.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-32
3.
Material Accounting Policies, Continued
(k)
Impairment, Continued
(ii)
Non-financial assets
The carrying amounts of the Group’s non-financial assets, other than assets arising from employee benefits,
inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any
indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For
goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, irrespective
of whether there is any indication of impairment, the recoverable amount is estimated each year.
Recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount
of the individual asset, the Group determines the recoverable amount of the cash-generating unit to which the
asset belongs. The cash-generating unit (“CGU”) is the smallest group of assets that includes the asset and
generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. In
identifying whether cash inflows from an asset or group of assets are largely independent of the cash inflows
from other assets or groups of assets, the Group considers various factors including how management monitors
the entity’s operations or how management makes decisions about continuing or disposing of the entity’s assets
and operations. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are
expected to benefit from the synergies of the combination. The recoverable amount of an asset or cash-generating
unit is determined as the greater of its value in use and its fair value less costs to sell. In assessing value in use,
the estimated future cash flows are discounted to their present value using a discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset or CGU. Fair value less costs
to sell is based on the best information available to reflect the amount that the Group could obtain from the
disposal of the asset in an arm's length transaction between knowledgeable, willing parties, after deducting the
costs of disposal.
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable
amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of a CGU
are allocated first to reduce the carrying amount of any goodwill allocated to the unit, and then to reduce the
carrying amounts of the other assets in the unit on a pro rata basis.
In respect of assets other than goodwill, impairment losses recognized in prior periods are assessed at each
reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed
if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is
reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have
been determined, net of accumulated depreciation or amortization, if no impairment loss had been recognized
from the acquisition cost. An impairment loss in respect of goodwill is not reversed.
(l)
Leases
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration.
(i)
As a lessee
At commencement or on modification of a contract that contains a lease component, the Group allocates the
consideration in the contract to each lease and non-lease component on the basis of its relative stand-alone price.
For certain leases, the Group accounts for the lease and non-lease components as a single lease component by
applying the practical expedient not to separate non-lease components.
The Group recognizes a right-of-use asset and lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of
costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is
located less any lease incentives received.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-33
3.
Material Accounting Policies, Continued
(l)
Leases Continued
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date
to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end
of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In
that case, the right-of-use asset will be depreciated over the useful life of the underlying asset, which is
determined on the same basis as those of property and equipment. In addition, the right-of-use asset is
periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate
as the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing
sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
-
fixed payments, including in-substance fixed payments;
-
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at
the commencement date;
-
amounts expected to be payable under a residual value guarantee; and
-
the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments
in an optional renewal period if the Group is reasonably certain to exercise an extension option, and
penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there
is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s
estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its
assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-
substance fixed lease payment.
When the lease liability is remeasured, the Group recognizes the amount of the remeasurement of the lease
liability as an adjustment to the right-of-use asset. However, if the carrying amount of the right-of-use asset is
reduced to zero and there is a further reduction in the measurement of the lease liability, the Group recognizes
any remaining amount of the remeasurement in profit or loss.
The Group presents right-of-use assets that do not meet the definition of investment property in ‘property, plant
and equipment’ and lease liabilities in ‘financial liabilities’ in the consolidated statement of financial position.
The Group has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets and
short-term leases. The Group recognizes the lease payments associated with these leases as an expense on a
straight-line basis over the lease term.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-34
3.
Material Accounting Policies, Continued
(l)
Leases, Continued
(ii)
As a lessor
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an
operating lease.
To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of
the risks and rewards incidental to ownership of the underlying asset. If the lease transfers substantially all of
the risks and rewards incidental to ownership of the underlying asset, then the lease is a finance lease; if not,
then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether
the lease is for the major part of the economic life of the asset.
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease
separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from
the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group
applies the exemption described above, then it classifies the sub-lease as an operating lease.
Contracts may contain both lease and non-lease components. The Group allocates the consideration in the
contract to the lease and non-lease components based on their relative stand-alone prices.
At the commencement date, the Group recognizes assets held under a finance lease in its consolidated statement
of financial position and present them as a receivable at an amount equal to the net investment in the lease and
recognize finance income over the lease term, based on a pattern reflecting a constant periodic rate of return on
the lessor’s net investment in the lease.
The Group recognizes lease payments received under operating leases as income on a straight-line basis over
the lease term as part of ‘other revenue’.
(m)
Provisions
A provision is recognized as a result of a past event, if the Group has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle
the obligation.
The risks and uncertainties that inevitably surround events and circumstances are taken into account in reaching
the best estimate of a provision. Where the effect of the time value of money is material, provisions are
determined at the present value of the expected future cash flows. The unwinding of the discount is recognized
as finance cost.
Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it
is no longer probable that an outflow of resources embodying economic benefits will be required to settle the
obligation, the provision is reversed.
The Group recognizes a liability for warranty obligations based on the estimated costs expected to be incurred
under its basic limited warranty. This warranty covers defective products and is normally applicable for a
warranty period from the date of purchase. These liabilities are accrued when product revenues are recognized.
Factors that affect the Group’s warranty liability include historical and anticipated rates of warranty claims on
those repairs and cost per claim to satisfy the Group’s warranty obligation. Warranty costs primarily include
raw materials and labor costs. As these factors are impacted by actual experience and future expectations,
management periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as
necessary. Accrued warranty obligations are included in the current and non-current provisions.
Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources,
are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or
remediation can be reasonably estimated.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-35
3.
Material Accounting Policies, Continued
(n)
Non-current Assets (liabilities) Held for Sale
Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is
highly probable that they will be recovered primarily from sale rather than through continuing use. In order to
be classified as held for sale, the asset (or disposal group) is available for immediate sale in its present condition
and its sale is highly probable. The assets (or disposal groups) that are classified as non-current assets (liabilities)
held for sale are measured at the lower of their carrying amount and fair value less costs to sell on initial
classification. The Group recognizes an impairment loss for any subsequent decrease in fair value of the asset
(or disposal group) for which an impairment loss was recognized on initial classification as held-for-sale and a
gain for any subsequent increase in fair value in profit or losses, up to the cumulative impairment loss previously
recognized.
The Group does not depreciate a non-current asset while it is classified as held for sale or while it is part of a
disposal group classified as held for sale.
(o)
Employee Benefits
(i)
Short-term employee benefits
Short-term employee benefits that are due to be settled within twelve months after the end of the period in which
the employees render the related service are recognized in profit or loss on an undiscounted basis. The expected
cost of profit-sharing and bonus plans and others are recognized when the Group has a present legal or
constructive obligation to make payments as a result of past events and a reliable estimate of the obligation can
be made.
(ii)
Other long-term employee benefits
The Group’s net obligation in respect of long-term employee benefits other than pension plans is the amount of
future benefit that employees have earned in return for their service in the current and prior periods.
(iii)
Defined contribution plan
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions
into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for
contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or
loss in the period during which services are rendered by employees.
(iv)
Defined benefit plan
A defined benefit plan is a post-employment benefit plan other than defined contribution plans. The Group’s net
obligation in respect of its defined benefit plan is calculated by estimating the amount of future benefit that
employees have earned in return for their service in the current and prior periods; that benefit is discounted to
determine its present value. The fair value of any plan assets is deducted.
The calculation is performed annually by an independent actuary using the projected unit credit method. The
discount rate is the yield at the reporting date on high quality corporate bonds that have maturity dates
approximating the terms of the Group’s obligations and that are denominated in the same currency in which the
benefits are expected to be paid. The Group recognizes remeasurement gains and losses arising from experience
adjustments and changes in actuarial assumptions related to the defined benefit plans in other comprehensive
income and transfers immediately to retained earnings.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-36
3.
Material Accounting Policies, Continued
(o)
Employee Benefits, Continued
The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period
by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period
to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability
(asset) during the period as a result of contributions and benefit payments. Consequently, the net interest on the
net defined benefit liability (asset) now comprises: interest cost on the defined benefit obligation, interest income
on plan assets, and interest on the effect on the asset ceiling.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates
to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Group
recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.
(v)
Termination benefits
The Group recognizes expense for termination benefits at the earlier of the date when the entity can no longer
withdraw the offer of those benefits and when the entity recognizes costs for a restructuring involving the
payment of termination benefits. If the termination benefits are not expected to be settled wholly before twelve
months after the end of the annual reporting period, the Group measures the termination benefit with present
value of future cash payments.
(p)
Revenue from contracts with customers
Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the
consideration received or receivable, net of estimated returns, trade discounts, volume rebates and other cash
incentives paid to customers.
The Group recognizes revenue according to the five stage revenue recognition model (①Identifying the
contract→② Identifying performance obligations →③ Determining transaction price→④ Allocating the
transaction price to performance obligations →⑤ Recognizing revenue for performance obligations).
The Group generates revenue primarily from sale of display panels. Product revenue is recognized when a
customer obtains control over the Group’s products, which typically occurs upon shipment or delivery depending
on the terms of the contracts with the customer.
The Group includes return option in the sales contract of display panels with its customers and the consideration
receivable from the customer is subject to change due to returns. The Group estimates an amount of variable
consideration by using the expected value method with which the Group expects to better predict the amount of
consideration. The Group includes in the transaction price an amount of variable consideration estimated only
to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized
will not occur during the return period when the uncertainty associated with the variable consideration is
subsequently resolved. The Group recognizes a refund liability and an asset for its right to recover products from
customers if the Group receives consideration from a customer and expects to refund some or all of that
consideration to the customer. Sales taxes or value-added taxes collected from customers and remitted to
governmental authorities are accounted for on a net basis and are excluded from revenues in the consolidated
statement of comprehensive income (loss).
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-37
3.
Material Accounting Policies, Continued
(q)
Operating Segments
An operating segment is a component of the Group that: 1) engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with other
components of the group, 2) whose operating results are reviewed regularly by the Group’s chief operating
decision maker (“CODM”) in order to allocate resources and assess its performance, and 3) for which discrete
financial information is available. The CODM does not receive and therefore does not review discrete financial
information for any component of the Group. Consequently, no operating segment information is included in
these consolidated financial statements. Entity wide disclosures of geographic and product revenue information
are provided in Note 17 to these consolidated financial statements.
(r)
Finance Income and Finance Costs
Finance income comprises interest income on funds invested (including debt instruments measured at FVOCI),
dividend income, gains on disposal of debt instruments measured at FVOCI and changes in fair value of financial
instruments at FVTPL. Interest income is recognized as it accrues in profit or loss, using the effective interest
method. Dividend income is recognized in profit or loss on the date that the Group’s right to receive payment is
established.
Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions, gain and losses
from financial instruments measured at FVTPL and impairment losses recognized on financial assets. Borrowing
costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as
part of the cost of that asset.
(s)
Income Tax
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or
loss except to the extent that it relates to a business combination, or items recognized directly in equity or in
other comprehensive income.
(i)
Current tax
Current tax comprises the expected tax payable or receivable on the taxable profit or loss for the year, using tax
rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of
previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected
to be paid or received that reflects uncertainty related to income taxes, if any. The taxable profit is different from
the accounting profit for the period since the taxable profit is calculated excluding the temporary differences,
which will be taxable or deductible in determining taxable profit (tax loss) of future periods, and non-taxable or
non-deductible items from the accounting profit.
(ii)
Deferred tax
Deferred tax is recognized, using the asset and liability method, in respect of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period
when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or
substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and deferred
tax assets reflects the tax consequences that would follow from the manner in which the Group expects, at the
end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-38
3.
Material Accounting Policies, Continued
(s)
Income Tax, Continued
The Group recognizes a deferred tax liability for all taxable temporary differences associated with investments
in subsidiaries, associates, and interests in joint ventures, except to the extent that the Group is able to control
the timing of the reversal of the temporary differences and it is probable that the temporary differences will not
reverse in the foreseeable future. A deferred tax asset is recognized for all deductible temporary differences to
the extent that it is probable that the differences relating to investments in subsidiaries, associates and joint
ventures will reverse in the foreseeable future and taxable profit will be available against which the temporary
difference can be utilized.
The Group reviews the carrying amount of deferred tax assets at the end of each reporting period, considering
the likelihood of generating taxable income against which temporary differences, unused tax loss carryforwards,
and tax credit carryforwards can be utilized. The potential taxable income is estimated based on business plans
approved by management, historical experience of taxable income estimates, and tax policies including the
transfer pricing of the consolidated entity. Additionally, future taxable income includes the anticipated
permanent differences, considering the realization effect of temporary differences consistent with the business
plan and the dividend policy of the consolidated entity. The Group recognizes deferred tax assets to the extent
that it is probable that sufficient taxable income will be generated in the future, or there are sufficient taxable
temporary differences available to utilize unused tax losses, etc.
The Group offsets deferred tax assets and deferred tax liabilities if, and only if the Group has a legally
enforceable right to set off current tax assets against current tax liabilities and the deferred tax assets and the
deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable
entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or
to realize the assets and settle the liabilities simultaneously.
(t)
Earnings Per Share
The Parent Company presents basic and diluted earnings per share (“EPS”) data for its common shares. Basic
EPS is calculated by dividing the profit or loss attributable to common shareholders of the Parent Company by
the weighted average number of common shares outstanding during the period. Diluted EPS is determined by
adjusting the profit or loss attributable to common shareholders and the weighted average number of common
shares outstanding, adjusted for the effects of all dilutive potential common shares such as convertible bonds
and others.
(u)
Accounting standards and Interpretation issued and adopted by the Group
The Group has applied the following standards and amendments for the first time for their annual reporting
period commencing January 1, 2024.
(i)
Amendments to IAS 1 Presentation of Financial Statements – Classification of Liabilities as Current or
Non-current, and Non-current Liabilities with Covenants
The amendments clarify that liabilities are classified as either current or non-current, depending on the
substantive rights that exist at the end of the reporting period. Classification is unaffected by the likelihood that
an entity will exercise right to defer settlement of the liability or the expectations of management. Also, the
settlement of liability includes the transfer of the entity’s own equity instruments, however, it would be excluded
if an option to settle them by the entity’s own equity instruments if compound financial instruments is met the
definition of equity instruments and recognized separately from the liability. In addition, covenants that an entity
is required to comply with after the end of the reporting period would not affect classification of a liability as
current or non-current at the reporting date. When an entity classifies a liability that is subject to the covenants
which an entity is required to comply with within twelve months of the reporting date as non-current at the end
of the reporting period, the entity shall disclose information in the notes to understand the risk that non-current
liabilities with covenants could become repayable within twelve months after the reporting period. The
amendments do not have a significant impact on the financial statements.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-39
3.
Material Accounting Policies, Continued
(u)
Accounting standards and Interpretation issued and adopted by the Group, Continued
(ii)
Amendments to IAS 7 Statement of Cash Flows, IFRS 7 Financial Instruments: Disclosures – Supplier
finance arrangements
When applying supplier finance arrangements, an entity shall disclose information about its supplier finance
arrangements that enables users of financial statements to assess the effects of those arrangements on the entity’s
liabilities and cash flows and on the entity’s exposure to liquidity risk.(See Note 25)
(iii)
Amendments to IFRS 16 Leases – Lease Liability in Sale and Leaseback
When subsequently measuring lease liabilities arising from a sale and leaseback, a seller-lessee shall determine
lease payments or revised lease payments in a way that the seller-lessee would not recognize any amount of
the gain or loss that relates to the right of use retained by the seller-lessee. The amendments do not have a
significant impact on the financial statements.
(v)
New standards and interpretations not yet adopted by the Group
The following new accounting standards and interpretations have been published that are not mandatory for
December 31, 2024 reporting periods and have not been early adopted by the Group.
(i)
Amendments to IAS 21 Effect of Exchange Rate Fluctuations, Amendments to IFRS 1 First-time Adoption
of International Financial Reporting Standards - Lack of exchangeability
The amendment requires the entity to disclose the relevant information when an entity estimates a spot exchange
rate because the exchangeability between two currencies is lacking. The amendments will take effect in fiscal
years beginning on or after January 1, 2025, and will allow for early application. The amendments do not have
a significant impact on the financial statements.
(ii)
Amendments to the Classification and Measurement of Financial Instruments - Amendments to IFRS 9
Financial Instruments, IFRS 7 Financial Instruments: Disclosure
IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures have been amended to respond to
recent questions arising in practice, and to include new requirements. The amendments should be applied for
annual periods beginning on or after January 1, 2026, and earlier application is permitted.
-
Clarify the date of recognition and derecognition of some financial assets and liabilities, with a new
exception for some financial liabilities settled through an electronic cash transfer system
-
Clarify and add further guidance for assessing whether a financial asset meets the solely payments of
principal and interest (SPPI) criterion
-
Add new disclosures of impact on the entity and the extent to which the entity is exposed for each type of
financial instruments if the timing or amount of contractual cash flow changes due to amendment of
contract term
-
Update the disclosures for equity instruments designated at fair value through other comprehensive income
(FVOCI)
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-40
3.
Material Accounting Policies, Continued
(v)
New standards and interpretations not yet adopted by the Group, Continued
(iii)
Annual Improvement to IFRS Accounting Standards - Volume 11
Annual Improvement to IFRS Accounting Standards - Volume 11 shall be effective for fiscal years beginning
on or after January 1, 2026, and early application is effective. The amendments are not expected to have a
significant impact on the financial statements.
-
Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards: Hedge
accounting by a first-time adopter
-
Amendments to IFRS 7 Financial Instruments : Disclosure: Gain or loss on derecognition and
implementation guidance
-
Amendments to IFRS 9 Financial Instruments : Derecognition of lease liabilities and definition of
transaction price
-
Amendments to IFRS 10 Consolidated Financial Statements : Determination of a ‘de facto agent’
-
Amendments to IAS 7 Statement of Cash Flows : Cost Method
(iv)
IFRS 18 Presentation and Disclosure in Financial Statements
IFRS 18 will replace IAS 1 Presentation of financial statements, introducing new requirements that will help to
achieve comparability of the financial performance of similar entities and provide more relevant information
and transparency to users. Even though IFRS 18 will not impact the recognition or measurement of items in the
financial statements, its impacts on presentation and disclosure are expected to be pervasive, in particular those
related to the statement of financial performance and providing management-defined performance measures
within the financial statements. The Group is in the process of assessing the impact from meeting the new
disclosure requirements.
(v)
IFRS 19 Subsidiaries without Public Accountability: Disclosures
Issued in May 2024, IFRS 19 allows for certain eligible subsidiaries of parent entities that report under IFRS
Accounting Standards to apply reduced disclosure requirements. This standards do not have a significant impact
on the financial statements.
(vi)
Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosure
IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures have been amended to clarify the
financial effects of nature-dependent electricity contracts, which are often structured as power purchase
agreements, including new disclosure requirements to enable investors to understand the effect of these contracts
on a company’s financial performance and cash flows. These amendments are required to be applied for annual
reporting periods beginning on or after January 1, 2026 and earlier application is permitted. The amendments
do not have a significant impact on the financial statements.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-41
4.
Cash and Cash Equivalents and Deposits in Banks
Details of Cash and cash equivalents and deposits in banks as of December 31, 2023 and 2024 are as follows:
(In millions of won)
December 31, 2023
December 31, 2024
Current assets
Cash and cash equivalents
Cash
₩
3
—
Deposits (*1)
2,257,519
2,021,640
Total
₩
2,257,522
2,021,640
Deposits in banks
Time deposits (*2)
₩
905,971
600
Non-current assets
Deposits in banks
Deposit for checking account
₩
11
11
(*1) As of December 31, 2024, deposits of W158,415 million are classified as assets held for sale.
(*2) As of December 31, 2023, it includes funds deposited under agreements on mutually beneficial cooperation to
aid LG Group companies’ suppliers, restricted deposits pledged to guarantee the Parent Company and subsidiaries’
borrowings and others.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-42
5.
Trade Accounts and Notes Receivable, and Other Accounts Receivable
(a)
Details of trade accounts and notes receivable and other accounts receivable as of December 31, 2023 and 2024
are as follows:
(In millions of won)
December 31, 2023
December 31, 2024
Trade accounts and notes receivable
₩
3,218,093
3,624,477
Other accounts receivable
Non-trade receivables, net
₩
112,739
227,477
Accrued income, net
14,246
22,552
Subtotal
126,985
250,029
Total
3,345,078
3,874,506
(b)
The aging of trade accounts and notes receivable, and other accounts receivable as of December 31, 2023 and
2024 are as follows:
(In millions of won)
December 31, 2023
Original amount
Allowance for doubtful account
Trade accounts
and notes
receivable
Other
accounts
receivable
Trade
accounts
and notes
receivable
Other
accounts
receivable
Not past due
₩
3,212,514
123,919
(932)
(191)
1-15 days past due
3,077
1,357
(1)
—
16-30 days past due
3,435
156
—
(2)
31-60 days past due
—
168
—
(2)
More than 60 days past due
—
1,592
—
(12)
Total
₩
3,219,026
127,192
(933)
(207)
(In millions of won)
December 31, 2024
Original amount
Allowance for doubtful account
Trade accounts
and notes
receivable
Other
accounts
receivable
Trade
accounts
and notes
receivable
Other
accounts
receivable
Not past due
₩
3,609,870
207,928
(1,369)
(464)
1-15 days past due
15,951
37,722
(14)
(2)
16-30 days past due
4
1,915
—
(1)
31-60 days past due
35
350
—
(3)
More than 60 days past due
—
2,592
—
(8)
Total
₩
3,625,860
250,507
(1,383)
(478)
The movement in the allowance for doubtful account in respect of trade accounts and notes receivable and other
accounts receivable for the years ended December 31, 2022, 2023 and 2024 are as follows:
(In millions of won)
Trade accounts and notes receivable
2022
2023
2024
Beginning balance
₩
1,204
875
933
(Reversal of) bad debt expense
(329)
58
450
Ending balance
₩
875
933
1,383
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-43
5.
Trade Accounts and Notes Receivable, and Other Accounts Receivable Continued
(In millions of won)
Other accounts receivable
2022
2023
2024
Beginning balance
₩
2,005
1,778
207
(Reversal of) bad debt expense
(227)
(239)
271
Write-off
—
(1,332)
—
Ending balance
₩
1,778
207
478
6.
Other Financial Assets
Details of other financial assets as of December 31, 2023 and 2024 are as follows:
(In millions of won)
December 31, 2023
December 31, 2024
Current assets
Financial assets at fair value through profit or loss
Derivatives (*1)
₩
136,762
186,676
Fair value hedging derivatives
Derivatives (*2)
₩
—
99,116
Financial assets at amortized cost
Deposits
₩
1,356
10,429
Short-term loans
26,375
26,098
Subtotal
₩
27,731
36,527
Other financial assets
Lease receivables
₩
4,130
6,302
Total
₩
168,623
328,621
Non-current assets
Financial assets at fair value through profit or loss
Equity securities
₩
87,027
120,501
Convertible securities
3,127
1,470
Derivatives (*1)
32,941
69,575
Subtotal
₩
123,095
191,546
Fair value hedging derivatives
Derivatives (*2)
₩
—
19,982
Financial assets at amortized cost
Deposits
₩
17,022
6,318
Long-term loans
33,509
11,045
Subtotal
₩
50,531
17,363
Other financial assets
Lease receivables
₩
—
3,761
Total
₩
173,626
232,652
(*1) The derivatives, which are not designated as hedging instruments, arise from cross currency interest rate swap contracts
and others for the purpose of managing currency and interest rate risks associated with foreign currency denominated
borrowings and bonds.
(*2) The derivatives, which are designated as hedging instruments, arise from forward exchange contracts for the purpose
of managing currency risk associated with advances received in foreign currency.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-44
7.
Inventories
Details of inventories as of December 31, 2023 and 2024 are as follows:
(i)
As of December 31, 2023
(In millions of won)
Cost
Valuation
allowance
Carrying
amount
Finished goods
₩
811,580
(60,805)
750,775
Work-in-process
1,222,991
(77,385)
1,145,606
Raw materials
485,876
(28,520)
457,356
Supplies
199,908
(25,917)
173,991
Total
₩
2,720,355
(192,627)
2,527,728
(ii)
As of December 31, 2024
(In millions of won)
Cost
Valuation
allowance
Carrying
amount
Finished goods
₩
995,999
(51,305)
944,694
Work-in-process
1,184,516
(82,655)
1,101,861
Raw materials
477,929
(17,648)
460,281
Supplies
184,869
(20,463)
164,406
Total
₩
2,843,313
(172,071)
2,671,242
For the years ended December 31, 2022, 2023 and 2024, the amount of inventories recognized as cost of sales and
inventory write-downs included in cost of sales and usage of inventory write-downs are as follows:
(In millions of won)
2022
2023
2024
Cost of sales
₩
25,027,703
20,985,643
24,039,928
Including: Inventory write-downs
245,619
192,627
175,262
Usage of inventory write-downs
224,576
245,619
192,627
There were no significant reversals of inventory write-downs recognized during the years ended December
31, 2022, 2023 and 2024.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-45
8.
Investments in Equity Accounted Investees
(a)
Details of investments in associates as of December 31, 2023 and 2024 are as follows:
(In millions of won)
December 31, 2023
December 31, 2024
Associates
Location
Closing
Date of
incorporation
Business
Percentage
of
ownership
Carrying
amount
Percentage
of
ownership
Carrying
amount
Paju Electric Glass Co., Ltd.
Paju,
South Korea
December
January
2005
Production of
glass for
display
40%
₩
24,200
40%
₩ 29,479
WooRee E&L Co., Ltd. (*1)
Ansan,
South Korea
December
June
2008
Production of
LED
back light
unit
packages
13%
7,106
—
—
YAS Co., Ltd. (*1)
Paju,
South Korea
December
April
2002
Development
and
production of
deposition
equipment for
OLEDs
16%
28,564
—
—
AVATEC Co., Ltd. (*1)
Daegu,
South Korea
December
August
2000
Processing
and
sales of glass
for display
14%
20,871
—
—
Arctic Sentinel,
Inc.
Los Angeles,
U.S.A.
March
June
2008
Development
and
production of
tablet for kids
10%
—
10%
—
Cynora GmbH
Bruchsal,
Germany
December
March
2003
Development
of organic
light
emitting
materials
for displays
and lighting
devices
10%
—
10%
—
Material Science Co.,
Ltd.(*2)
Seoul,
South Korea
December
January
2014
Development,
production,
and
sales of
materials
for display
16%
3,588
14%
3,698
Total
₩
84,329
33,177
(*1) For the year ended December 31, 2024, due to loss of significant influence, it has been reclassified from Investments in
associates to financial assets at fair value through profit or loss.
(*2) For the year ended December 31, 2024, due to the investee’s disposal of treasury shares and issuance of new shares, the
Parent Company’s percentage of ownership decreased from 16% to 14%.
Although the Parent Company’s respective share interests in Arctic Sentinel, Inc., Cynora GmbH and Material Science Co.,
Ltd. are below 20%, the Parent Company is able to exercise significant influence through its right to appoint one or more
directors to the board of directors of each investee. Accordingly, the investments in these investees have been accounted for
using the equity method.
Dividend income recognized from associates for the year ended December 31, 2024 amounted to W200 million (dividend
income recognized from associates for the year ended December 31, 2022: W4,461 million, 2023 : W15,200 million).
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-46
8.
Investments in Equity Accounted Investees Continued
(b)
Summary of financial information as of December 31, 2023 and 2024 and for the years ended December 31,
2022, 2023 and 2024 are as follows:
Paju Electric Glass Co., Ltd.
(In millions of won)
December 31, 2023
December 31, 2024
Total assets
₩
109,992
123,520
Current assets
94,705
110,055
Non-current assets
15,287
13,465
Total liabilities
47,875
48,088
Current liabilities
47,459
47,418
Non-current liabilities
416
670
(In millions of won)
2022
2023
2024
Revenue
₩
319,264
184,880
277,093
Profit (loss) for the year
6,192
(2,655)
10,015
Other comprehensive income (loss)
(10,216)
(4,894)
3,301
Total comprehensive income (loss)
(4,024)
(7,549)
13,316
(c)
Reconciliation from financial information of the significant associate to its carrying amount in the consolidated
financial statements as of December 31, 2023 and 2024 are as follows:
(i)
As of December 31, 2023
(In millions of won)
Company
Net asset
Ownership
interest
Net asset
(applying
ownership
interest)
Intra-group
transaction
Carrying
amount
Paju Electric Glass Co., Ltd.
₩
62,117
40%
24,847
(647)
24,200
(ii)
As of December 31, 2024
(In millions of won)
Company
Net asset
Ownership
interest
Net asset
(applying
ownership
interest)
Intra-group
transaction
Carrying
amount
Paju Electric Glass Co., Ltd.
₩
75,432
40%
30,173
(694)
29,479
(d)
Carrying amount of other associates, in aggregate, as of December 31, 2023 and 2024 are as follows:
(i)
As of December 31, 2023
(In millions of won)
Net profit (loss) of associates (applying ownership interest)
Book value
Profit (loss) for the
year
Other
comprehensive
income (loss)
Total
comprehensive
income (loss)
Other associates
₩
60,129
(1,634)
(722)
(2,356)
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-47
8.
Investments in Equity Accounted Investees Continued
(ii)
As of December 31, 2024
(In millions of won)
Net profit (loss) of associates (applying ownership interest)
Book value
Profit (loss) for the
year
Other
comprehensive
income (loss)
Total
comprehensive
income (loss)
Other associates
₩
3,698
1,455
1,912
3,367
(e)
Changes in investments in associates accounted for using the equity method for the years ended December 31,
2023 and 2024 are as follows:
(In millions of won)
2023
Company
January 1
Dividends
received
Equity loss on
investments
Other
comprehensive
loss
Other loss
December 31,
Associates
Paju Electric Glass
Co., Ltd.
₩
42,784
(15,200)
(1,427)
(1,957)
—
24,200
Others
66,335
—
(1,634)
(722)
(3,850)
60,129
Total
₩
109,119
(15,200)
(3,061)
(2,679)
(3,850)
84,329
(In millions of won)
2024
Company
January 1
Disposals
and others
Dividends
received
Equity
income on
investments
Other
comprehensive
income
Other gain
December 31,
Associates
Paju Electric Glass
Co., Ltd.
₩
24,200
—
—
3,957
1,322
—
29,479
Others
60,129
(60,581)
(200)
1,455
1,912
983
3,698
Total
₩
84,329
(60,581)
(200)
5,412
3,234
983
33,177
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-48
9.
Property, Plant and Equipment
(a)
Changes in property, plant and equipment for the years ended December 31, 2023 and 2024 are as follows:
(i)
2023
(In millions of won)
Land
Buildings
and
structures
Machinery
and
equipment
Furniture
and
fixtures
Construction
-in-progress
(*1)
Right-of-
use asset
Others
(*2)
Total
Acquisition cost as of
January 1, 2023
₩
476,045
8,699,292
50,722,745
902,477
10,145,865
271,761
1,299,892
72,518,077
Accumulated depreciation as
of January 1, 2023
—
(4,348,201)
(42,744,139)
(719,862)
—
(151,550)
(962,598)
(48,926,350)
Accumulated impairment loss
as of January 1, 2023
—
(447,145)
(1,794,407)
(13,397)
(356,155)
(7,553)
(26,137)
(2,644,794)
Book value as of
January 1, 2023
₩
476,045
3,903,946
6,184,199
169,218
9,789,710
112,658
311,157
20,946,933
Additions
—
—
—
—
3,392,876
74,611
—
3,467,487
Depreciation (*3)
—
(376,264)
(2,837,242)
(75,727)
—
(68,349)
(279,200)
(3,636,782)
Disposals
(330)
(758)
(506,420)
(1,896)
—
—
(43,368)
(552,772)
Impairment loss (*4)
—
8
(53,513)
(6)
—
—
(6,554)
(60,065)
Others (*5)
(2,902)
1,494,070
3,963,010
60,585
(5,900,151)
—
374,182
(11,206)
Government grants received
—
—
(7,417)
—
—
—
—
(7,417)
Effect of movements in
exchange rates
—
9,189
39,066
964
3,626
326
983
54,154
Book value as of
December 31, 2023
₩
472,813
5,030,191
6,781,683
153,138
7,286,061
119,246
357,200
20,200,332
Acquisition cost as of
December 31, 2023
₩
472,813
10,192,281
52,107,890
942,376
7,571,687
245,149
1,448,688
72,980,884
Accumulated depreciation as
of December 31, 2023
₩
—
(4,715,087)
(43,466,025)
(775,953)
—
(119,804)
(1,062,377)
(50,139,246)
Accumulated impairment loss
as of December 31, 2023
₩
—
(447,003)
(1,860,182)
(13,285)
(285,626)
(6,099)
(29,111)
(2,641,306)
(*1) As of December 31, 2023, construction-in-progress mainly relates to construction of manufacturing facilities.
(*2) Others mainly consist of tools and equipment.
(*3) The Group has classified the depreciation as manufacturing overhead costs, selling expenses, administrative expenses
and research and development expenses. It includes capitalized development costs.
(*4) Impairment losses are recognized for the difference between the carrying amount and the recoverable amount of
property, plant and equipment.
(*5) Others mainly represent the reclassification of construction-in-progress to other property, plant and equipment.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-49
9.
Property, Plant and Equipment, Continued
(ii)
2024
(In millions of won)
Land
Buildings
and
structures
Machinery
and
equipment
Furniture
and
fixtures
Construction
-in-progress
(*1)
Right-of-
use asset
Others
(*2)
Total
Acquisition cost as of
January 1, 2024
₩
472,813
10,192,281
52,107,890
942,376
7,571,687
245,149
1,448,688
72,980,884
Accumulated depreciation
as of January 1, 2024
—
(4,715,087)
(43,466,025)
(775,953)
—
(119,804)
(1,062,377)
(50,139,246)
Accumulated impairment loss
as of January 1, 2024
—
(447,003)
(1,860,182)
(13,285)
(285,626)
(6,099)
(29,111)
(2,641,306)
Book value as of January 1, 2024
₩
472,813
5,030,191
6,781,683
153,138
7,286,061
119,246
357,200
20,200,332
Additions
—
—
—
—
1,499,468
33,865
—
1,533,333
Depreciation (*3)
—
(444,982)
(3,424,197)
(80,195)
—
(68,445)
(305,354)
(4,323,173)
Disposals
(47,344)
(28,598)
(132,473)
(178)
—
—
(52,377)
(260,970)
Impairment loss (*4)
—
(28)
(58,660)
(1,275)
(27,000)
—
(7,249)
(94,212)
Others (*5)
873
948,851
4,186,807
42,191
(5,565,372)
—
385,812
(838)
Government grants received
—
—
(2,307)
—
—
—
—
(2,307)
Effect of movements
in exchange rates
—
265,665
350,074
7,520
106,339
23,058
9,741
762,397
Classified as held for sale
—
(545,867)
(24,526)
(4,050)
(9,778)
(18,791)
(8,677)
(611,689)
Book value as of
December 31, 2024
₩
426,342
5,225,232
7,676,401
117,151
3,289,718
88,933
379,096
17,202,873
Acquisition cost as of
December 31, 2024
₩
426,342
10,529,816
53,029,839
925,048
3,581,525
225,250
1,570,421
70,288,241
Accumulated depreciation
as of December 31, 2024
₩
—
(4,813,622)
(43,403,177)
(793,522)
—
(129,395)
(1,161,523)
(50,301,239)
Accumulated impairment loss
as of December 31, 2024
₩
—
(490,962)
(1,950,261)
(14,375)
(291,807)
(6,922)
(29,802)
(2,784,129)
(*1) As of December 31, 2024, construction-in-progress mainly relates to construction of manufacturing facilities.
(*2) Others mainly consist of tools and equipment.
(*3) The Group has classified the depreciation as manufacturing overhead costs, selling expenses, administrative expenses
and research and development expenses. It includes capitalized development costs.
(*4) Impairment losses are recognized for the difference between the carrying amount and the recoverable amount of
property, plant and equipment.
(*5) Others mainly represent the reclassification of construction-in-progress to other property, plant and equipment.
(b)
Capitalized borrowing costs and capitalization rate for the years ended December 31, 2022, 2023 and 2024 are
as follows:
(In millions of won)
2022
2023
2024
Capitalized borrowing costs
₩
152,074
258,168
41,826
Capitalization rate
3.11%
5.18%
5.64%
(c)
The Group provides a portion of property, plant and equipment as an operating lease. For the year ended
December 31, 2024, rental income from property, plant and equipment is W1,755 million (2022: W2,806
million, 2023: W2,271 million).
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-50
10.
Intangible Assets
(a)
Changes in intangible assets for the years ended December 31, 2023 and 2024 are as follows:
(i)
2023
(In millions of won)
Intellectual
property rights
Software
Member-
ships
Development
costs
Construction-
in-progress
Technology
Good-will
Total
Acquisition cost as of January 1, 2023
₩
2,074,083
1,340,637
27,170
2,016,477
28,169
12,763
108,519
5,607,818
Accumulated amortization as of January 1, 2023
(1,115,014)
(1,108,459)
—
(1,358,446)
—
(11,411)
—
(3,593,330)
Accumulated impairment loss as of January 1, 2023
(61,413)
(20,605)
(1,700)
(92,812)
—
(43)
(84,958)
(261,531)
Book value as of January 1, 2023
₩
897,656
211,573
25,470
565,219
28,169
1,309
23,561
1,752,957
Additions – internally generated
—
—
—
493,608
—
—
—
493,608
Additions – external purchases
118,344
—
—
—
117,443
—
—
235,787
Amortization (*1)
(187,819)
(105,285)
—
(363,162)
—
(163)
—
(656,429)
Disposals
(202)
(396)
(3,796)
—
—
—
—
(4,394)
Impairment loss (*2)
(1,633)
(425)
242
(52,775)
—
—
—
(54,591)
Others (*3)
—
115,275
—
(1,429)
(112,568)
—
—
1,278
Effect of movements in exchange rates
2,433
2,712
6
—
(8)
—
596
5,739
Book value as of December 31, 2023
₩
828,779
223,454
21,922
641,461
33,036
1,146
24,157
1,773,955
Acquisition cost as of December 31, 2023
₩
2,189,071
1,403,157
23,463
2,295,468
33,036
12,763
109,115
6,066,073
Accumulated amortization as of December 31, 2023
₩
(1,299,655)
(1,160,702)
—
(1,509,575)
—
(11,574)
—
(3,981,506)
Accumulated impairment loss as of December 31,
2023
₩
(60,637)
(19,001)
(1,541)
(144,432)
—
(43)
(84,958)
(310,612)
(*1) The Group has classified the amortization as manufacturing overhead costs, selling expenses, administrative expenses
and research and development expenses.
(*2) The Group recognized an impairment loss amounting to W52,775 million for development projects which are not likely
to generate probable future economic benefits.
(*3) Others mainly represent the reclassification of construction-in-progress to intangible assets.
(ii)
2024
(In millions of won)
Intellectual
property
rights
Software
Member-
ships
Development
costs
Construction
-in-progress
Technology
Good-will
Total
Acquisition cost as of January 1, 2024
₩
2,189,071
1,403,157
23,463
2,295,468
33,036
12,763
109,115
6,066,073
Accumulated amortization as of
January 1, 2024
(1,299,655)
(1,160,702)
—
(1,509,575)
—
(11,574)
—
(3,981,506)
Accumulated impairment loss as of January 1, 2024
(60,637)
(19,001)
(1,541)
(144,432)
—
(43)
(84,958)
(310,612)
Book value as of January 1, 2024
₩
828,779
223,454
21,922
641,461
33,036
1,146
24,157
1,773,955
Additions - internally generated
—
—
—
548,224
—
—
—
548,224
Additions - external purchases
49,818
—
—
—
110,616
—
—
160,434
Amortization (*1)
(188,058)
(122,539)
—
(546,377)
—
(164)
—
(857,138)
Disposals
—
(187)
(6,433)
—
—
—
—
(6,620)
Impairment loss (*2)
(1,931)
(4,517)
—
(66,028)
—
—
—
(72,476)
Others (*3)
—
128,986
—
—
(128,148)
—
—
838
Effect of movements in exchange rates
1,224
5,568
73
—
24
—
5,076
11,965
Classified as held for sale
—
(775)
—
—
—
—
—
(775)
Book value as of December 31, 2024
₩
689,832
229,990
15,562
577,280
15,528
982
29,233
1,558,407
Acquisition cost as of December 31, 2024
₩
2,275,735
1,482,559
15,562
2,357,041
15,528
12,763
114,191
6,273,379
Accumulated amortization as of
December 31, 2024
₩ (1,525,276)
(1,228,377)
—
(1,715,408)
—
(11,738)
—
(4,480,799)
Accumulated impairment loss as of December 31, 2024
₩
(60,627)
(24,192)
—
(64,353)
—
(43)
(84,958)
(234,173)
(*1) The Group has classified the amortization as manufacturing overhead costs, selling expenses, administrative expenses
and research and development expenses.
(*2) The Group recognized an impairment loss amounting to W66,028 million for development projects which are not likely
to generate probable future economic benefits.
(*3) Others mainly represent the reclassification of construction-in-progress to intangible assets.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-51
10.
Intangible Assets, Continued
(b)
The book value and remaining amortization period of development costs and intellectual property rights as of
December 31, 2023 and 2024 are as follows:
Development costs
(i)
As of December 31, 2023
(In millions of won and in years)
Classification
Category
Book Value
Remaining
amortization
period(*)
TV
₩
43,956
0.8
Development completed
IT
63,049
0.6
Mobile and others
190,487
3.0
Subtotal
₩
297,492
TV
₩
46,368
—
Development in process
IT
175,023
—
Mobile and others
122,578
—
Subtotal
₩
343,969
Total
₩
641,461
(*) Weighted average of the remaining useful life based on the book value at the end of the reporting period as each product
has a different remaining amortization period.
(ii) As of December 31, 2024
(In millions of won and in years)
Classification
Category
Book Value
Remaining
amortization
period(*)
TV
₩
49,705
0.8
Development completed
IT
49,615
0.7
Mobile and others
255,128
2.7
Subtotal
₩
354,448
TV
₩
14,802
—
Development in process
IT
37,737
—
Mobile and others
170,293
—
Subtotal
₩
222,832
Total
₩
577,280
(*) Weighted average of the remaining useful life based on the book value at the end of the reporting period as each product
has a different remaining amortization period.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-52
10.
Intangible Assets, Continued
Intellectual property rights
(i)
As of December 31, 2023
(In millions of won and in years)
Classification
Category
Book Value
Remaining
amortization period
(*1)
Patent
Direct additions
₩
214,634
7.1
Licenses agreement (*2)
611,801
5.5
Subtotal
₩
826,435
Other
2,344
3.6
Total
₩
828,779
(*1) Weighted average of the remaining useful life based on the book value at the end of the reporting period as each
patent has a different remaining amortization period.
(*2) The Group’s rights under contracts with the patent company.
(ii)
As of December 31, 2024
(In millions of won and in years)
Classification
Category
Book Value
Remaining
amortization period
(*1)
Patent
Direct additions
₩
237,364
7.0
Licenses agreement (*2)
449,617
5.1
Subtotal
₩
686,981
Other
2,851
3.7
Total
₩
689,832
(*1) Weighted average of the remaining useful life based on the book value at the end of the reporting period as each
patent has a different remaining amortization period.
(*2) The Group’s rights under contracts with the patent company
(c)
The total amount of research and development expenditure recognized as an expense for the year ended
December 31, 2024 is W1,447,706 million (2022: W1,382,406 million, 2023: W1,379,653 million).
(d)
Details of impairment assessment on CGU as of December 31, 2023
As of December 31, 2023, the Group’s cash-generating units consist of Display CGU, Display (Large OLED)
CGU and Display (AD PO) CGU. As of December 31, 2023, the Group performed impairment assessment for
Display CGU. All the goodwill balance as of December 31, 2023 is allocated to the Display CGU.
The recoverable amount of CGU is determined based on its value in use. Value in use is calculated using the
estimated cash flow based on 5-year business plan approved by management. The estimated operating
performance of the Group’s products used in the forecast was determined considering external sources and the
Group’s historical experience. Management estimated the future cash flows based on its past performance and
forecasts on market growth. The key assumptions used in the estimation of value in use for Display CGU include
the future operating performance for the forecast period and discount rate. Terminal growth rate and the discount
rate used in the estimation of value in use are as follows:
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-53
10.
Intangible Assets, Continued
(d)
Details of impairment assessment on CGU as of December 31, 2023, Continued
Classification
Pre-tax
discount rate(*)
Post-tax
discount rate(*)
Terminal
growth rate
Display CGU
10.9%
9.0%
1.0%
(*) The discount rate was calculated using the weighted average cost of equity capital and debt and the beta of equity
capital was calculated as the average of five global listed companies in the same industry and the Group. Cost
of debt was calculated using the yield rate of non-guaranteed corporate bond considering the Group’s credit
rating and debt ratio was determined using the average of the debt ratios of the five global listed companies in
the same industry and the Group. The Group calculates the value in use of the CGU using post-tax cash flows
and a post-tax discount rate, and the result is not significantly different from the value in use calculated using
pre-tax cash flows and pre-tax discount rate.
As a result of impairment assessment for Display CGU to which goodwill is allocated, the recoverable amount
exceeded its carrying amount by W975,459 million. Management has identified that a reasonably possible
change in certain key assumption could cause the carrying amount to exceed the recoverable amount. The value
in use determined for this CGU is sensitive to the discount rate used in the discounted cash flow model.
Specifically, the discount rate would need to increase by 0.92% (holding all the other assumptions constant) for
the estimated recoverable amount to be equal to the carrying amount.
(e)
Details of impairment assessment on CGU, as of December 31, 2024
As of December 31, 2024, the Group’s cash-generating units consist of Display CGU, Display (Large OLED)
CGU and Display (AD PO) CGU. As of December 31, 2024, the Group performed impairment assessment for
Display CGU, Display (Large OLED) CGU and Display (AD PO) CGU. All the goodwill balance as of
December 31, 2024 is allocated to the Display CGU.
The recoverable amount of CGU is determined based on its value in use. Value in use is calculated using the
estimated cash flow based on 5-year business plan approved by management. The estimated operating
performance of the Group’s products used in the forecast was determined considering external sources and the
Group’s historical experience. Management estimated the future cash flows based on its past performance and
forecasts on market growth. The key assumptions used in the estimation of value in use for each Display CGU
include the future operating performance for the forecast period and discount rate. Terminal growth rate and the
discount rate used in the estimation of value in use are as follows:
Classification
Pre-tax
discount rate(*)
Post-tax
discount rate(*)
Terminal
growth rate
Display CGU
9.3%
7.6%
1.0%
Display (Large OLED) CGU
9.5%
7.6%
1.0%
Display (AD PO) CGU
9.9%
7.6%
0.0%
(*) The discount rate was calculated using the weighted average cost of equity capital and debt and the beta of equity
capital was calculated as the average of seven global listed companies in the same industry and the Group. Cost
of debt was calculated using the yield rate of non-guaranteed corporate bond considering the Group’s credit
rating and debt ratio was determined using the average of the debt ratios of the seven global listed companies in
the same industry and the Group. The Group calculates the value in use of the CGU using post-tax cash flows
and a post-tax discount rate, and the result is not significantly different from the value in use calculated using
pre-tax cash flows and pre-tax discount rate.
As a result of impairment assessment for Display CGU to which goodwill is allocated, the recoverable amount
exceeded its carrying amount by W1,250,028 million. Management has identified that a reasonably possible
change in certain key assumption could cause the carrying amount to exceed the recoverable amount. The value
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-54
in use determined for this CGU is sensitive to the discount rate used in the discounted cash flow model.
Specifically, the discount rate would need to increase by 0.98% (holding all the other assumptions constant) for
the estimated recoverable amount to be equal to the carrying amount.
On the other hand, as a result of impairment assessment for Display (Large OLED) CGU and Display (AD PO)
CGU, the recoverable amount exceeded its carrying amount by W1,463,528 million and W2,734,516 million,
respectively.
11.
Investment Property
(a)
Changes in investment properties for the years ended December 31, 2023 and 2024 are as follows:
(In millions of won)
2023
2024
Beginning balance
₩
28,269
32,995
Transfer from property, plant and equipment
9,928
—
Depreciation
(4,962)
(5,084)
Others
(240)
—
Ending balance
₩
32,995
27,911
(b)
For the year ended December 31, 2024, rental income from investment property is W8,891 million (2023:
W5,478 million) and rental cost is W5,468 million (2023: W5,429 million).
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-55
12.
Financial Liabilities
(a)
Details of financial liabilities as of December 31, 2023 and 2024 are as follows:
(In millions of won)
December 31, 2023
December 31, 2024
Current
Short-term borrowings
₩
1,875,635
969,595
Current portion of long-term borrowings
2,934,693
4,907,390
Current portion of bonds
369,716
611,882
Derivatives (*1)
26,193
3,762
Fair value hedging derivatives (*2)
7,392
—
Lease liabilities
48,666
34,821
Total
₩
5,262,295
6,527,450
Non-current
Long-term borrowings
₩
10,230,658
7,535,290
Bonds
1,118,427
525,957
Derivatives (*1)
37,333
7,006
Fair value hedging derivatives (*2)
28,660
—
Lease liabilities
24,698
23,154
Total
₩
11,439,776
8,091,407
(*1) The derivatives, which are not designated as hedging instruments, arise from cross currency interest rate swap
contracts and others for the purpose of managing currency and interest rate risks associated with foreign currency
denominated borrowings and bonds.
(*2) The derivatives, which are designated as hedging instruments, arise from forward exchange contracts for the
purpose of managing currency risk associated with advances received in foreign currency.
(b)
Details of short-term borrowings as of December 31, 2023 and 2024 are as follows:
(In millions of won)
Description
Annual interest rate
as of
December 31, 2024
(%)
December 31, 2023
December 31, 2024
Working capital and others
3.50 ~ 6.41
₩
1,875,635
969,595
(c)
Details of Korean won denominated long-term borrowings as of December 31, 2023 and 2024 are as follows:
(In millions of won)
Description
Latest Maturity
date
Annual interest rate
as of
December 31, 2024
(%)
December 31, 2023
December 31, 2024
Facility capital and others
March 2025 ~ March 2030
2.41 ~ 6.06
₩
4,490,967
4,668,538
Less: current portion of long-term
borrowings
(776,000)
(1,861,000)
Total
₩
3,714,967
2,807,538
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-56
12.
Financial Liabilities, Continued
(d)
Details of foreign currency denominated long-term borrowings as of December 31, 2023 and 2024 are as
follows:
(In millions of won, USD and CNY)
Description
Latest Maturity
date
Annual interest rate
as of
December 31, 2024
(%)
December 31, 2022
December 31,
2024
Facility capital and others
January 2025 ~ July 2029
2.13 ~ 7.06
₩
8,674,384
7,774,142
Foreign currency equivalent of
foreign currency borrowings
USD 3,222
USD 2,528
CNY 24,991
CNY 20,164
Less: current portion of
long-term borrowings
(2,158,693)
(3,046,390)
Total
₩
6,515,691
4,727,752
(e)
Details of bonds issued and outstanding as of December 31, 2023 and 2024 are as follows:
(In millions of won and USD)
Maturity
Annual interest rate
as of
December 31, 2024
(%)
December 31,
2023
December 31,
2024
Korean won denominated bonds at amortized cost (*1)
Publicly issued bonds
February 2025 ~ February 2027
2.79~3.66
₩
1,025,000
655,000
Privately issued bonds
January 2025 ~ January 2026
7.20~7.25
337,000
337,000
Less: discount on bonds
(2,120)
(705)
Less: current portion
(369,716)
(611,882)
Subtotal
₩
990,164
379,413
Foreign currency denominated bonds at amortized cost (*2)
Privately issued bonds
April 2026
6.52
₩
128,940
147,000
Foreign currency equivalent
of foreign currency denominated bonds
USD 100
USD 100
Less: discount on bonds
(677)
(456)
Less: foreign currency equivalent of discount on
bonds of foreign currency denominated bonds
USD (1)
USD (0)
Subtotal
₩
128,263
146,544
Total
₩
1,118,427
525,957
(*1) Principal of the won denominated bonds is to be repaid at maturity and interests are paid quarterly.
(*2) Principal of the foreign currency denominated bonds is to be repaid at maturity and interests are paid quarterly.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-57
13.
Post-Employment Benefits
(i)
Defined benefit plans
The Parent Company and certain subsidiaries’ defined benefit plans provide a lump-sum payment to an employee
based on final salary rates and length of service at the time the employee leaves the Parent Company or certain
subsidiaries.
The defined benefit plans expose the Group to actuarial risks, such as the risk associated with expected periods of
service, interest rate risk, market (investment) risk, and others.
(a)
Details of net defined benefit liabilities (defined benefit assets) recognized as of December 31, 2023 and 2024
are as follows:
(In millions of won)
December 31, 2023
December 31, 2024
Present value of defined benefit obligations
₩
1,491,146
1,444,252
Fair value of plan assets
(1,897,025)
(1,603,911)
Total
₩
(405,879)
(159,659)
Defined benefit liabilities, net
₩
1,559
1,093
Defined benefit assets, net
₩
(407,438)
(160,752)
(b)
Changes in the present value of the defined benefit obligations for the years ended December 31, 2023 and 2024
are as follows:
(In millions of won)
2023
2024
Defined benefit obligations at January 1
₩
1,602,697
1,491,146
Current service cost
173,879
148,868
Interest cost
83,793
67,426
Remeasurements (before tax)
(65,505)
142,422
Benefit payments
(287,100)
(399,549)
Net transfers from (to) related parties
(16,551)
(5,975)
Others
(67)
(86)
Defined benefit obligations at December 31
₩
1,491,146
1,444,252
Weighted average remaining maturity of defined benefit obligations as of December 31, 2024 is 9.98 years
(December31, 2023 : 12.20 years).
(c)
Changes in fair value of plan assets for the years ended December 31, 2023 and 2024 are as follows:
(In millions of won)
2023
2024
Fair value of plan assets at January 1
₩
2,048,687
1,897,025
Interest income
107,735
86,280
Remeasurements (before tax)
(870)
(11,781)
Contributions by employer directly to plan assets
2,219
1,499
Benefit payments
(260,528)
(369,112)
Net transfers from (to) related parties
(218)
—
Fair value of plan assets at December 31
₩
1,897,025
1,603,911
The Group is considering the amount of recent contributions and the size of plan assets when estimating the
contributions expected to be paid in the fiscal year commencing after the end of the reporting period.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-58
13.
Post-Employment Benefits, Continued
(d)
Details of plan assets as of December 31, 2023 and 2024 are as follows:
(In millions of won)
December 31, 2023
December 31, 2024
Time deposits in banks
₩
1,897,025
1,603,911
As of December 31, 2024, the Group maintains the plan assets primarily with Shinhan Bank, KEB Hana Bank and
others.
(e)
Details of expenses related to defined benefit plans recognized in profit or loss for the years ended December
31, 2022, 2023 and 2024 are as follows:
(In millions of won)
2022
2023
2024
Current service cost
₩
173,534
173,879
148,868
Net interest cost
(5,274)
(23,942)
(18,854)
Total(*)
₩
168,260
149,937
130,014
(*) The total cost related to the defined benefit plans includes capitalized amounts of W9,885 million (2022: W12,704
million, 2023: W15,085 million).
Details of expenses are recognized in the consolidated statements of comprehensive income (loss) as follows:
(In millions of won)
2022
2023
2024
Cost of sales
₩
116,002
99,141
89,052
Selling expenses
8,017
7,138
6,201
Administrative expenses
18,780
16,865
14,271
Research and development expenses
12,757
11,708
10,605
Total(*)
₩
155,556
134,852
120,129
(*) The total cost recognized in the comprehensive income (loss) statement related to the defined benefit plans excludes
capitalized amounts of W9,885 million (2022: W12,704 million, 2023: W15,085 million).
(f)
Details of remeasurements of net defined benefit liabilities (assets) included in other comprehensive income
(loss) for the years ended December 31, 2022, 2023 and 2024 are as follows:
(In millions of won)
2022
2023
2024
Balance at January 1
₩
(125,293)
(2,900)
47,087
Remeasurements
Actuarial profit or loss arising from:
Experience adjustment
(83,376)
66,461
(21,525)
Demographic assumptions
(8,020)
(85)
7,487
Financial assumptions
287,304
(871)
(128,384)
Return on plan assets
(30,044)
(870)
(11,781)
Group’s share of associates regarding remeasurements
32
170
(85)
Subtotal
₩
165,896
64,805
(154,288)
Income tax
₩
(43,503)
(14,818)
22,368
Balance at December 31
₩
(2,900)
47,087
(84,833)
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-59
13.
Post-Employment Benefits, Continued
(g)
Details of principal actuarial assumptions as of December 31, 2023 and 2024 (expressed as weighted averages)
are as follows:
December 31, 2023
December 31, 2024
Expected rate of salary increase
4.0%
4.0%
Discount rate for defined benefit obligations
4.6%
3.9%
(h)
Reasonably possible changes to respective relevant actuarial assumptions would have affected the defined
benefit obligations by the following amounts as of December 31, 2024:
(In millions of won)
Defined benefit obligations
1% increase
1% decrease
Discount rate for defined benefit obligations
₩
(127,037)
146,746
Expected rate of salary increase
151,241
(132,836)
(ii)
Defined contribution plan
The amount recognized as an expense in relation to the defined contribution plan in 2024 is W19,057 million (2022: W1,097
million2023: W8,534 million).
14.
Provisions
Changes in provisions for the years ended December 31, 2023 and 2024 are as follows:
(i) 2023
(In millions of won)
Litigation
Warranties (*)
Others
Total
Beginning balance
₩
1,680
249,368
8,432
259,480
Additions (reversal)
126
101,846
(2,552)
99,420
Usage
—
(177,419)
—
(177,419)
Ending balance
₩
1,806
173,795
5,880
181,481
Current
₩
1,806
109,990
5,880
117,676
Non-current
₩
—
63,805
—
63,805
(*) The Group provides warranty on defective products for warranty periods after sales. The provision is calculated based
on the assumption of expected number of warranty claims and costs per claim considering historical experience.
(ii) 2024
(In millions of won)
Litigation
Warranties (*)
Others
Total
Beginning balance
₩
1,806
173,795
5,880
181,481
Additions
5,673
113,689
117
119,479
Usage
—
(134,801)
—
(134,801)
Ending balance
₩
7,479
152,683
5,997
166,159
Current
₩
7,479
91,775
5,997
105,251
Non-current
₩
—
60,908
—
60,908
(*) The Group provides warranty on defective products for warranty periods after sales. The provision is calculated based
on the assumption of expected number of warranty claims and costs per claim considering historical experience.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-60
15.
Contingent Liabilities and Commitments
(a)
Legal Proceedings
Anti-trust litigations
The Group and other LCD panel manufacturers have been sued by individual claimants on allegations of
violating EU competition laws. While the Group continues its vigorous defense of this pending proceedings. As
of December 31, 2024, the Group cannot predict the final outcomes of the lawsuits that have been filed.
Others
The Group is involved in various lawsuits and disputes in addition to the pending proceeding described above.
The Group cannot reliably estimate the timing and amount of outflows of resources embodying economic
benefits relating to the disputes.
(b)
Commitments
Factoring and securitization of accounts receivable
The Parent Company has discount agreements with Korea Development Bank and other banks for accounts
receivable related to export sales transactions with its subsidiary, up to USD 1,000 million (W 1,470,000
million). As of December 31, 2024, there is no discounted accounts receivable that have not yet matured in
connection with these agreements. In relation to the above agreements, the financial institutions have the
recourse for accounts receivable that are past due.
The Group has assignment agreements with Standard Chartered Bank and other banks for accounts receivable
related to domestic and export sales transactions, up to W4,483,500 million. As of December 31, 2024, the
amount of the accounts receivable assigned that have not matured in connection with these agreements is
W1,314,003 million. In relation to the above agreements, the financial institutions do not have the right of
recourse for accounts receivable that are past due.
Loan commitment
As of December 31, 2024, the Group has entered into agreements with Hana Bank and other banks for credit
lines and opening of letter of credits up to W3,544,726 million.
Payment guarantees
The Parent Company received payment guarantees of USD 900 million (W1,323,000 million) from KB
Kookmin Bank and other banks for advances received related to the long-term supply agreements.
The Group is provided with the guarantees for the borrowings amounting to USD 1,025 million (W 1,506,750
million) by the Export-Import Bank of Korea and Korea Trade Insurance Corporation.
The Group has entered into guarantee agreements with Seoul Guarantee Insurance Co., Ltd., China Construction
Bank Corporation and other banks up to W2,021 million, CNY 913 million (W183,760 million), JPY 900 million
(W8,428 million), VND 76,157 million (W4,394 million), and USD 0.2 million (W269 million) for the payment
of consumption tax, import value-added tax, customs duties, and electricity charges.
License agreements
The Group has a trademark license agreement with LG Corp, for use of the “LG” name. Under the terms of the
current agreement, we are required to make monthly payments to LG Corp. in the aggregate amount per year of
0.2% of our sales after deducting advertising expenses.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-61
15.
Contingent Liabilities and Commitments, Continued
Long-term Supply Agreement
As of December 31, 2024, in connection with long-term supply agreements with customers, the Parent Company
recognized advances received amounting to USD 750 million (W1,102,500 million). The advances received will
be used to offset against accounts receivable arising from future product sales after a certain period of time from
the date of receipt. In relation to this, the Parent Company received payment guarantees of USD 900 million
(W1,323,000 million) from KB Kookmin Bank and other banks (see note 15(b) payment guarantees).
Collateral
Details of collateral provided by the Group are as follows:
(In millions of won and CNY)
Collateral
Carrying
amount
Maximum bond
amount
Secured creditor
Collateral
borrowings
amount
Property, plant and equipment and others
₩
437,583
1,200,000
LG Electronics Inc.
1,000,000
Property, plant and equipment and others
67,974
326,400
Korea Development Bank
and others
136,000
Property, plant and equipment and others (*)
237,283
780,000
Korea Development Bank
and others
650,000
Property, plant and equipment and others
746,738
—
China Construction Bank
Corporation and others
CNY 6,000
(*) The carrying amount of collateral amounting to W237,283 million includes the collateral of W67,974 million for
collateralized borrowings of W136,000 million from Korea Development Bank and other banks.
Commitments for asset acquisition
The amount committed to acquire property, plant, equipment and intangible assets not recognized on the
financial statements as of December 31, 2024 is W465,422 million.
16.
Equity
(a)
Share capital and Share Premium
The total number of shares to be issued by the Parent Company is 500,000,000 shares, the number of shares
issued is 500,000,000 shares (December 31, 2023: 357,815,700 shares), and the par value per share is W5,000.
The Parent Company conducted a paid-in capital increase as below based on the resolution of the board of
directors on December 18, 2023, and the newly issued shares were listed on the Korea Exchange (KRX) on
March 26, 2024.
With the new shares of common stock, the share capital increased by W710,921 million to W2,500,000
million.
Classification
Description
Purpose
Funding for capital and operating expenditures and repayment of debts
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-62
Type of shares issued
Common stock
Number of shares issued
142,184,300 shares
The amount per shares
W 9,090
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-63
16.
Equity, Continued
Capital surplus as of December 31, 2023 and 2024 are as follows:
(In millions of won)
December 31, 2023
December 31, 2024
Share premium
₩
2,251,113
2,821,006
Other capital surplus
—
(47,419)
Total
₩
2,251,113
2,773,587
(b)
Reserves
Reserves consist mainly of the following:
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial
statements of overseas subsidiaries and others.
Other comprehensive income (loss) from associates
The other comprehensive income (loss) from associates comprises the amount related to change in equity of
investments in equity accounted investees.
Other comprehensive income (loss) held for sale
The other comprehensive income (loss) held for sale comprises the translation reserve from the disposal groups held
for sale.
Reserves as of December 31, 2023 and 2024 are as follows:
(In millions of won)
December 31, 2023
December 31, 2024
Foreign currency translation differences
₩
548,792
1,025,319
Other comprehensive loss from associates
(32,816)
(29,496)
Other comprehensive income held for sale
—
291,363
Total
₩
515,976
1,287,186
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-64
16.
Equity, Continued
The movement in reserves for the years ended December 31, 2022, 2023 and 2024 are as follows:
(In millions of won)
Loss on
valuation of
derivatives
Foreign
currency
translation
differences
Other
comprehensive
income (loss) from
associates (excluding
remeasurements)
Other
comprehensive
income (loss) held
for sale
Total
January 1, 2022
₩
(9,227)
566,651
(20,282)
—
537,142
Change in reserves
9,227
(57,031)
(9,710)
—
(57,514)
December 31, 2022
—
509,620
(29,992)
—
479,628
January 1, 2023
—
509,620
(29,992)
—
479,628
Change in reserves
—
39,172
(2,824)
—
36,348
December 31, 2023
—
548,792
(32,816)
—
515,976
January 1, 2024
—
548,792
(32,816)
—
515,976
Change in reserves
—
476,527
3,320
291,363
771,210
December 31, 2024
₩
—
1,025,319
(29,496)
291,363
1,287,186
(c)
Retained earnings (accumulated deficit) as of December 31, 2023 and 2024 are as follows:
(In millions of won)
December 31, 2023
December 31, 2024
Legal reserve (*)
₩
235,416
235,416
Other reserve
68,251
68,251
Defined benefit plan actuarial income (loss)
47,087
(84,833)
Unappropriated retained earnings (accumulated deflict)
2,325,260
(237,346)
Total(*)
₩
2,676,014
(18,512)
(*) The Commercial Code of the Republic of Korea requires the Parent Company to appropriate, as a legal reserve, an
amount equal to a minimum of 10% of cash dividends paid until such reserve equals 50% of its issued share capital.
The reserve is not available for the payment of cash dividends, but may be transferred to share capital or used to
reduce accumulated deficit.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-65
17.
Information about geographical areas and products
Details of information of geographical areas and products for the years ended December 31, 2022, 2023 and 2024 are
as follows:
(a)
Revenue by geography (Customer based)
(In millions of won)
Geography
2022 (*)
2023
2024
Domestic
₩
678,246
633,529
1,007,200
Foreign
China
17,434,407
14,704,357
18,150,480
Asia (excluding China)
2,796,648
2,397,980
3,228,369
North America
3,078,924
2,079,628
2,282,754
Europe
2,376,512
1,515,325
1,946,544
Subtotal
₩25,686,491
20,697,290
25,608,147
Total
₩26,364,737
21,330,819
26,615,347
(*) Revenue for 2022 excludes W212,956 million of forward exchange hedging loss which was reclassified from
accumulated other comprehensive income to revenue when the sales from the hedged forecast transactions are
recognized.
Revenue from Customer A and Customer B amount to W14,281,844 million and W3,767,278 million, respectively,
for the year ended December 31, 2024 (the year ended December 31, 2022: W11,731,702 million and W4,699,282
million, 2023: W11,119,769 million and W3,371,229 million, respectively). The aggregated revenues from the
Group’s top ten customers accounted for 89% of revenue for the year ended December 31, 2024 (the year ended
December 31, 2022: 86%, 2023: 87%).
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-66
17.
Information about geographical areas and products, Continued
(b)
Non-current assets by geography
(In millions of won)
December 31, 2023
December 31, 2024
Geography
Property, plant
and equipment
Intangible
assets
Investment
Property
Property, plant
and equipment
Intangible
assets
Investment
Property
Domestic
₩13,583,136
1,683,116
32,995
11,913,201
1,485,876
27,911
Foreign
China
3,358,395
32,009
—
2,099,653
16,792
—
Vietnam
3,244,729
31,472
—
3,181,152
41,574
—
Others
14,072
27,358
—
8,867
14,165
—
Subtotal
₩ 6,617,196
90,839
—
5,289,672
72,531
—
Total
₩20,200,332
1,773,955
32,995
17,202,873
1,558,407
27,911
(c)
Revenue by type of products and services
(In millions of won)
2022 (*1)
2023
2024
TV
₩ 6,975,269
4,331,474
5,972,637
IT
11,197,954
7,853,034
9,419,615
Mobile and others(*2)
6,371,472
7,146,998
8,942,349
AUTO
1,820,042
1,999,313
2,280,746
Total(*2)
₩26,364,737
21,330,819
26,615,347
(*1) Revenue for 2022 excludes W212,956 million of forward exchange hedging loss which was reclassified from
accumulated other comprehensive income to revenue when the sales from the hedged forecast transactions are
recognized.
(*2) This includes royalties and other revenue.
For the year ended December 31, 2024, the revenue from OLED products comprised 55% (for the year ended
December 31, 2022: 40%, 2023: 48%) of the total revenue.
For the year ended December 31, 2024, the revenue recognized by satisfying performance obligation for the amount
received from the customer in prior reporting periods is W 589,055 million.
For the years ended December 31, 2022 and 2023, the revenue recognized by satisfying performance obligation for
the amount received from the customer in prior reporting periods were not material.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-67
18.
The Nature of Expenses
The classification of expenses by nature for the years ended December 31, 2022, 2023 and 2024 are as follows:
(In millions of won)
2022
2023
2024
Changes in inventories
₩
477,457
345,190
(143,513)
Purchases of raw materials
13,435,265
10,810,985
12,973,989
Depreciation and amortization
4,557,456
4,213,742
5,125,637
Outsourcing
1,147,856
922,565
1,159,520
Labor
3,669,275
3,439,608
3,714,001
Supplies and others
1,212,142
938,568
987,265
Utility
1,189,105
1,193,025
1,397,669
Fees and commissions
834,449
704,763
740,863
Shipping
310,945
124,770
172,081
Advertising
108,315
76,404
67,092
Warranty
251,395
101,846
113,689
Travel
66,428
66,201
53,244
Taxes and dues
144,038
129,784
135,982
Others
832,702
773,532
678,424
Total(*)
₩ 28,236,828
23,840,983
27,175,943
(*) Total expenses consist of cost of sales, selling, administrative, research and development expenses.
19.
Selling and Administrative Expenses
Details of selling and administrative expenses for the years ended December 31, 2022, 2023 and 2024 are as follows:
(In millions of won)
2022
2023
2024
Salaries
₩
354,709
372,966
579,784
Expenses related to defined benefit plans
26,872
24,822
22,596
Other employee benefits
91,396
86,692
84,007
Shipping
213,613
91,960
119,325
Fees and commissions
272,337
253,495
246,020
Depreciation and amortization
263,739
264,982
266,159
Taxes and dues
69,851
65,528
63,382
Advertising
108,315
76,404
67,092
Warranty
251,395
101,846
113,689
Insurance
15,100
13,610
14,216
Travel
17,912
18,421
13,122
Training
15,458
9,775
9,306
Others
126,022
95,186
89,611
Total
₩ 1,826,719
1,475,687
1,688,309
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-68
20.
Other Income and Other Expenses
(a)
Details of other income for the years ended December 31, 2022, 2023 and 2024 are as follows:
(In millions of won)
2022
2023
2024
Foreign currency gain
₩ 3,098,553
1,398,181
1,972,046
Gain on disposal of property, plant and equipment
25,737
34,961
51,792
Gain on disposal of intangible assets
—
1,989
25
Reversal of impairment loss on property, plant and equipment
3,181
7
4,314
Rental income
2,806
2,271
1,755
Others
55,560
34,849
70,511
Total
₩ 3,185,837
1,472,258
2,100,443
(b)
Details of other expenses for the years ended December 31, 2022, 2023 and 2024 are as follows:
(In millions of won)
2022
2023
2024
Foreign currency loss
₩ 2,957,048
1,516,528
2,479,014
Loss on disposal of property, plant and equipment
54,432
102,453
76,771
Impairment loss on property, plant and equipment
1,260,436
60,072
98,525
Impairment loss on intangible assets
136,372
54,833
72,490
Others
38,126
52,348
71,181
Total
₩ 4,446,414
1,786,234
2,797,981
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-69
21.
Finance Income and Finance Costs
Details of finance income and costs recognized in profit or loss for the years ended December 31, 2022, 2023 and 2024 are
as follows:
(In millions of won)
2022
2023
2024
Finance income
Interest income
₩
85,624
134,664
87,692
Foreign currency gain
308,665
560,633
375,557
Gain on transaction of derivatives
49,503
178,610
274,173
Gain on valuation of derivatives
193,570
239,973
145,078
Gain on valuation of financial assets at fair value
through profit or loss
11,678
5,288
532
Gain on valuation of financial liabilities at fair value
through profit or loss
220,240
—
—
Others
3,779
3,126
62
Total
₩ 873,059
1,122,294
883,094
Finance costs
Interest expense
₩ 414,521
723,429
909,640
Foreign currency loss
440,604
512,456
861,409
Loss on sale of trade accounts and notes receivable
37,087
48,600
26,178
Loss on transaction of derivatives
359
—
—
Loss on valuation of derivatives
65,585
316,467
5,771
Loss on valuation of financial assets at fair value
through profit or loss
5,205
18,562
9,122
Others
3,002
15,020
9,792
Total
₩ 966,363
1,634,534
1,821,912
22.
Income Tax Benefit (Expense)
(a)
Details of income tax benefit (expense) for the years ended December 31, 2022, 2023 and 2024 are as follows:
(In millions of won)
2022
2023
2024
Current tax benefit (expense)
Current year
₩
(206,465)
(260,556)
(191,865)
Adjustment for prior years
59,484
67,985
(32,276)
Subtotal
₩
(146,981)
(192,571)
(224,141)
Deferred tax benefit
Changes in temporary differences
₩
384,766
955,283
6,381
Income tax benefit (expense)
₩
237,785
762,712
(217,760)
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-70
22.
Income Tax Benefit (Expense), Continued
(b)
Details of income tax benefit (expense) recognized in equity for the years ended December 31, 2022, 2023, and
2024 are as follows:
(In millions of won)
2022
Before tax
Income tax
effect
Net of tax
Remeasurements of net defined benefit liabilities (assets)
₩
165,864
(43,503)
122,361
Gain (loss) on valuation of derivatives
12,495
(3,268)
9,227
Foreign currency translation differences
(80,718)
(245)
(80,963)
Change in equity of equity method investee
(11,603)
1,925
(9,678)
Total
₩
86,038
(45,091)
40,947
(In millions of won)
2023
Before tax
Income tax
effect
Net of tax
Remeasurements of net defined benefit liabilities (assets)
₩
64,635
(14,818)
49,817
Foreign currency translation differences
43,572
(20,429)
23,143
Change in equity of equity method investee
(2,679)
25
(2,654)
Total
₩
105,528
(35,222)
70,306
(In millions of won)
2024
Before tax
Income tax
effect
Net of tax
Remeasurements of net defined benefit liabilities (assets)
₩
(154,203)
22,368
(131,835)
Foreign currency translation differences
997,729
(71,092)
926,637
Acquisition of non-controlling shareholders' interests in
subsidiaries
(61,512)
14,093
(47,419)
Change in equity of equity method investee
3,235
—
3,235
Total
₩
785,249
(34,631)
750,618
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-71
22.
Income Tax Benefit (Expense), Continued
(c)
Reconciliation of the effective tax rate for the years ended December 31, 2022, 2023, and 2024 are as follows:
(In millions of won)
2022
2023
2024
Loss for the year
₩ (3,195,585)
(2,576,729)
(2,409,300)
Income tax benefit (expense)
237,785
762,712
(217,760)
Loss before income tax
₩ (3,433,370)
(3,339,441)
(2,191,540)
Income tax benefit using the statutory tax rate of each country
738,403
789,941
527,019
Income not subject to tax (Expenses not deductible for tax purposes)
(18,742)
(19,759)
2,704
Tax credits
145,189
207,745
22,854
Change in unrecognized deferred tax assets (*1)
(457,763)
(156,783)
(703,714)
Adjustment for prior years
2,072
10,726
(13,807)
Effect on change in tax rate
(168,372)
(60,134)
(54,821)
Others
(3,002)
(9,024)
2,005
Total
₩
237,785
762,712
(217,760)
Effective tax rate
(*2)
(*2)
(*2)
(*1) The effect of changes in deferred tax assets related to tax loss carryforwards and tax credit carryforwards that are not
realizable based on the estimates of future taxable profit.
(*2) Actual effective tax rate is not calculated due to loss before income tax for the years ended December 31, 2022, 2023
and 2024.
(d)
Global Minimum Tax
Under Pillar Two legislation, the Group is liable to pay a top-up tax for the difference between the GloBE effective tax rate
per jurisdiction and the 15% minimum rate. The Group has assessed its impact of the Pillar Two legislation on its financial
statements. As a result of the assessment, the Group has no current tax expenses related to Pillar Two legislation for the year
ended December 31, 2024.
23.
Deferred Tax Assets and Liabilities
(a)
Details of the recovery and settlement timings for deferred tax assets and liabilities as of December 31, 2023
and 2024 are as follows:
(In millions of won)
2023
2024
Deferred tax assets
Deferred tax asset to be recovered after more than 12 months
₩
3,879,071
3,694,831
Deferred tax asset to be recovered within 12 months
370,009
493,850
Total deferred tax assets
4,249,080
4,188,681
Deferred tax liabilities
Deferred tax liability to be settled after more than 12 months
₩
588,669
496,851
Deferred tax liability to be settled within 12 months
99,619
187,653
Total deferred tax liabilities
688,288
684,504
Deferred tax assets after offsetting
₩
3,560,792
3,504,177
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-72
23.
Deferred Tax Assets and Liabilities, Continued
(b)
Changes in deferred tax assets and liabilities for the years ended December 31, 2023 and 2024 are as follows:
(In millions of won)
January 1,
2023
Profit or loss
for 2023
Other
comprehensive
loss for
2023
December 31,
2023
Profit or loss
for 2024
Other
comprehensive
income (loss)
and others
for 2024
Classified as
held for sale
December 31,
2024
Other accounts
receivable
₩
(2,009)
1,948
—
(61)
(4,409)
—
—
(4,470)
Inventories
62,014
(10,286)
—
51,728
12,897
—
(1,498)
63,127
Defined benefits assets
and others
(95,850)
20,915
(14,818)
(89,753)
53,721
22,368
—
(13,664)
Subsidiaries and
associates
(252,375)
183,130
(20,404)
(89,649)
(3,731)
(56,999)
—
(150,379)
Accrued expenses
111,293
(13,426)
—
97,867
8,902
—
(176)
106,593
Tangible and Intangible
Assets
708,093
(130,785)
—
577,308
(58,721)
—
60,747
579,334
Provisions
57,210
(17,624)
—
39,586
(4,666)
—
—
34,920
Other temporary
differences
86,252
(27,521)
—
58,731
(8,413)
—
(15,100)
35,218
Tax loss carryforwards
1,795,132
971,688
—
2,766,820
14,365
—
(72,338)
2,708,847
Tax credit carryforwards
170,971
(22,756)
—
148,215
(3,564)
—
—
144,651
Deferred tax assets
(liabilities)
₩ 2,640,731
955,283
(35,222)
3,560,792
6,381
(34,631)
(28,365)
3,504,177
(c)
Details of deductible (taxable) temporary differences, tax credit carryforwards and tax credit carryforwards
unrecognized as deferred tax assets (liabilities) as of December 31, 2024, are as follows:
(In millions of won)
Amount
Reason
Investments with its subsidiary
(1,125,864)
Unlikely to reverse (dispose of) in the
foreseeable future
Tax credit carryforwards (*1)
949,968
Uncertainty of future taxable profit
Tax loss carryforwards (*2)
2,946,346
Uncertainty of future taxable profit
(*1) Unrecognized tax credit carryforwards due to the low probability of realization in the future as of December 31, 2024,
will be expired from 2025.
(*2) Unrecognized tax loss carryforwards due to the low probability of realization in the future as of December 31, 2024,
will be expired from 2029.
24.
Loss per Share
(a)
Basic loss per share for the years ended December 31, 2022, 2023 and 2024 are as follows:
(In won and number of shares)
2022
2023
2024
Loss attributable to owners of the
Parent Company for the year
₩ (3,071,564,667,651)
(2,733,741,837,803)
(2,562,606,429,762)
Weighted-average number of common
stocks outstanding
380,884,673
380,884,673
471,252,355
Basic loss per share
₩
(8,064)
(7,177)
(5,438)
Due to paid-in capital increase for the year ended December 31, 2024, the number of outstanding shares has increased.
The weighted-average number of common shares outstanding for comparative periods have been adjusted considering
a bonus element in a rights issue to existing shareholders for the year ended December 31, 2024.
(b)
Diluted loss per share is not different from basic loss per share as there are no dilution effects of potential
common stocks.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-73
25.
Financial Risk Management
The Group is exposed to credit risk, liquidity risk and market risk. The Group identifies and analyzes such risks, and
controls are implemented under a risk management system to monitor and manage these risks at below an acceptable
level.
(a)
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices,
which will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
i)
Currency risk
The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other
than the functional currency of the Parent Company, Korean won (KRW). The currencies in which these transactions
primarily are denominated are USD, CNY, JPY, etc.
Interest on borrowings is accrued in the currency of the borrowing. Generally, borrowings are denominated in
currencies that match the cash flows generated by the underlying operations of the Group, primarily KRW, USD, and
CNY.
The Group adopts policies to ensure that its net exposure is kept to a manageable level by buying or selling foreign
currencies at spot rates when necessary to address short-term imbalances. In respect of monetary assets and liabilities
denominated in foreign currencies, the Group manages currency risk through continuously managing the position of
foreign currencies, measuring the currency risk and, if necessary, using derivatives such as currency forwards, currency
swap and others.
i)
Exposure to currency risk
The Group’s exposure to foreign currency risk for major foreign currencies based on notional amounts as of December
31, 2023 and 2024 is as follows:
(In millions)
Net exposure
December 31, 2023
December 31, 2024
USD
(859)
(215)
JPY
(23,398)
(13,932)
CNY
(19,043)
(26,923)
VND
(1,796,335)
(1,485,175)
Net exposure is the difference between foreign currency assets and liabilities and it includes derivatives assets and
liabilities from cross currency interest rate swap contracts and forward exchange contracts.
Cross currency interest rate swap contracts, USD 500 million (2023: USD 500 million) and CNY 726 million (2023:
CNY 345 million) were entered into to manage currency risk with respect to foreign currency denominated borrowings
and USD 980 million (2023: USD 1,430 million) were entered into to manage currency risk and interest rate risk with
respect to foreign currency denominated borrowings and bonds.
Forward exchange contracts, USD 750 million (2023: USD 1,200 million) were entered into to manage currency risk
with respect to advances received in foreign currency.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-74
25.
Financial Risk Management, Continued
Average exchange rates applied for the years ended December 31, 2022, 2023 and 2024 and the exchange rates as of
December 31, 2023 and 2024 are as follows:
(In won)
Average rate (year-to-date)
Reporting date spot rate
2022
2023
2024
December 31,
2023
December 31,
2024
USD
₩
1,291.15
1,306.12
1,363.09
1,289.40
1,470.00
JPY
9.85
9.32
9.01
9.13
9.36
CNY
191.60
184.28
189.13
180.84
201.27
VND
0.0551
0.0548
0.0544
0.0532
0.0577
ii)
Sensitivity analysis
A weaker won, as indicated below, against the following currencies which comprise the Group’s assets or liabilities
denominated in a foreign currency as of December 31, 2023 and 2024 would have increased (decreased) equity and
profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the
Group considers to be reasonably possible at the end of the reporting period. The analysis assumes that all other
variables, in particular interest rates, would remain constant. The changes in equity and profit or loss would have been
as follows:
(In millions of won)
December 31, 2023
December 31, 2024
Equity
Profit or loss
Equity
Profit or loss
USD (5 percent weakening)
₩
(68,615)
44,361
(7,533)
(27,651)
JPY (5 percent weakening)
(8,160)
(8,480)
(5,001)
(5,123)
CNY (5 percent weakening)
(172,198)
(2)
(270,943)
(1)
VND (5 percent weakening)
(3,683)
(3,683)
(3,303)
(3,303)
A stronger won against the above currencies as of December 31, 2023 and 2024 would have had the equal but opposite
effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.
iii)
Fair value hedging derivatives
In relation to advances received that are denominated in foreign currency, the Group uses derivative instruments to
hedge change of fair value due to foreign currency exchange rate changes.
Hedging
instrument
Contractor
Contract
amount
(In millions)
Contract exchange
rate
Maturity date
Change in
value
(In millions of
won)
Ineffective
portion
of risk
hedging
(In millions of
won)
Forward
Standard Chartered
Bank Korea Limited
and others
USD 750 1,289.11 ~ 1,310.08
2025.01 ~
2026.01
155,149
19,699
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-75
25.
Financial Risk Management, Continued
(ii)
Interest rate risk
Interest rate risk arises principally from the Group’s variable interest-bearing bonds and borrowings. The Group establishes
and applies its policy to reduce uncertainty arising from fluctuations in interest rates and to minimize finance cost and
manages interest rate risk by monitoring of trends of fluctuations in interest rate and establishing plan for countermeasures.
Meanwhile, the Group entered into cross currency interest rate swap contracts amounting to USD 980 million (W1,440,600
million) and interest rate swap contracts amounting to W915,000 million in notional amount to hedge interest rate risk with
respect to variable interest bearing borrowings.
i)
Profile
The interest rate profile of the Group’s interest-bearing financial instruments as of December 31, 2023 and 2024 is as
follows:
(In millions of won)
December 31, 2023
December 31, 2024
Fixed rate instruments
Financial assets
₩
3,163,490
2,023,710
Financial liabilities
(6,333,238)
(4,722,962)
Total
₩
(3,169,748)
(2,699,252)
Variable rate instruments
Financial liabilities
₩
(10,195,891)
(9,827,152)
ii)
Equity and profit or loss sensitivity analysis for variable rate instruments
As of December 31, 2023 and 2024, a change of 100 basis points in interest rates at the reporting date would have
increased (decreased) equity and profit or loss by the amounts shown below for the respective following 12 month
periods. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
(In millions of won)
Equity
Profit or loss
1%p
increase
1%p
decrease
1%p
increase
1%p
decrease
December 31, 2023
Variable rate instruments (*)
₩
(78,590)
78,590
(78,590)
78,590
December 31, 2024
Variable rate instruments (*)
₩
(75,758)
75,758
(75,758)
75,758
(*) Included financial instruments for which interest rate swap contracts, not designated as hedging instruments, were entered
into.
(b)
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails
to meet its contractual obligations and arises principally from the Group’s receivables from customers.
The Group’s exposure to credit risk of trade and other receivables is influenced mainly by the individual
characteristics of each customer. However, management believes that the default risk of the country in which
each customer operates, does not have a significant influence on credit risk since the majority of the customers
are global electronic appliance manufacturers operating in global markets.
The Group establishes credit limits for each customer and each new customer is analyzed quantitatively and
qualitatively before determining whether to utilize third party guarantees, insurance or factoring as appropriate.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-76
25.
Financial Risk Management, Continued
In relation to the impairment of financial assets subsequent to initial recognition, the Group recognizes the
changes in expected credit loss (“ECL”) in profit or loss at each reporting date.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit
risk as of December 31, 2023 and 2024 is as follows:
(In millions of won)
December 31, 2023
December 31, 2024
Financial assets carried at amortized cost
Cash equivalents
₩
2,257,519
2,021,640
Deposits in banks
905,982
611
Trade accounts and notes receivable, net(*)
3,218,093
3,624,477
Non-trade receivables
112,739
227,477
Accrued income
14,246
22,552
Deposits
18,378
16,747
Loans
59,884
37,143
Subtotal
6,586,841
5,950,647
Other financial assets
Lease receivables
4,130
10,063
Subtotal
₩
4,130
10,063
Financial assets at fair value through profit or loss
Convertible securities
₩
3,127
1,470
Derivatives
169,703
256,251
Subtotal
₩
172,830
257,721
Financial assets effective for fair value hedging
Derivatives
—
119,098
Total
₩
6,763,801
6,337,529
(*) As of December 31, 2024, it includes financial assets amounting to W1,123,869 million held under the business model
to achieve the purpose through the receipt of contractual cash flows and the sale of financial assets are included.
Trade accounts and notes receivable are insured in order for the Group to manage credit risk if they do not meet the Group’s
internal credit ratings. Uninsured trade accounts and notes receivable are managed by continuous monitoring of internal
credit rating standards established by the Group and seeking insurance coverage, if necessary.
There are no significant concentrations of credit risk, whether through exposure to individual customers, specific industry
sectors and/or regions.
(c)
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its
financial liabilities that are settled by delivering cash or other financial assets. The Group’s liquidity management
policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to
meet these, monitoring liquidity ratios against internal and external regulatory requirements and maintaining
debt financing plans.
The Group has historically been able to satisfy its cash requirements from cash flows from operations and debt
and equity financing. In addition, the Group maintains a line of credit with various banks.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-77
25.
Financial Risk Management, Continued
The following are the contractual maturities of financial liabilities, including estimated interest payments, as of
December 31, 2023 and 2024.
2023
(In millions of won)
Contractual cash flows in
Carrying
amount
Total
6 months
or less
6-12
months
1-2 years
2-5 years
More
than 5
years
Non-derivative
financial liabilities
Borrowings
₩
15,040,986
16,309,036
3,534,173
1,900,982
6,231,118
4,397,095
245,668
Bonds
1,488,143
1,597,741
111,169
319,011
642,996
524,565
—
Trade accounts and
notes payable(*)
4,175,064
4,175,064
3,969,497
205,567
—
—
—
Other accounts
payable(*)
2,918,903
2,921,719
2,688,979
232,740
—
—
—
Long-term other
accounts payable
357,907
413,255
—
—
129,587
175,358
108,310
Security deposits
received
153,370
190,329
3,120
4,597
1,047
181,565
—
Lease liabilities
73,364
77,246
29,980
21,335
11,848
11,461
2,622
Derivative financial
liabilities
Derivatives
₩
63,526
45,705
18,781
3,988
12,474
10,462
—
Cash outflow
—
1,385,858
657,325
47,527
510,676
170,330
—
Cash inflow
—
(1,340,153)
(638,544)
(43,539)
(498,202)
(159,868)
—
Fair value hedging
derivatives
36,052
36,052
1,514
5,878
20,282
8,378
—
Total
₩
24,307,315
25,766,147
10,357,213
2,694,098
7,049,352
5,308,884
356,600
(*) As of December 31, 2023, it includes W1,092,180 million of payable to credit card companies for utility expenses and
others paid using business credit card for purchases. The Group presented the payable to credit card companies as
other accounts payable and disclosed related cash flows as operating and investing activities since the Group is using
the business credit card for purchases through agreements with suppliers for transactions arising from purchasing of
goods and services, the payment term is within a year from the purchase, as part of the normal operating cycle, and no
collateral is provided.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-78
25.
Financial Risk Management, Continued
2024
(In millions of won)
Contractual cash flows in
Carrying
amount
Total
6 months
or less
6-12
months
1-2 years
2-5 years
More than
5 years
Non-derivative
financial liabilities
Borrowings
₩ 13,412,275
14,453,995
3,730,807
2,609,727
3,941,215
4,146,933
25,313
Bonds
1,137,839
1,185,892
631,539
11,638
416,573
126,142
—
Trade accounts and
notes payable(*)
4,156,149
4,156,149
3,884,788
271,361
—
—
—
Other accounts
payable(*)
1,720,670
1,723,867
1,404,896
318,971
—
—
—
Long-term other
accounts payable
279,774
323,400
—
—
69,090
192,570
61,740
Security deposits
received
160,713
189,214
—
808
6,841
181,565
—
Lease liabilities
57,975
60,653
23,948
12,681
13,889
9,423
712
Derivative financial
liabilities
Derivatives
₩
10,768
11,184
930
3,447
4,495
2,312
—
Cash outflow
—
75,016
21,402
20,467
22,342
10,805
—
Cash inflow
—
(63,832)
(20,472)
(17,020)
(17,847)
(8,493)
—
Total
₩ 20,936,163
22,104,354
9,676,908
3,228,633
4,452,103
4,658,945
87,765
(*) As of December 31, 2024, it includes W1,187,450 million of payable to credit card companies for utility expenses and
others paid using business credit card for purchases. The Group presented the payable to credit card companies as
trade account notes payables and other accounts payable and disclosed related cash flows as operating and investing
activities since the Group is using the business credit card for purchases through agreements with suppliers for
transactions arising from purchasing of goods and services, the payment term is within a year from the purchase, as
part of the normal operating cycle, and no collateral is provided.
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly
different amounts.
(d)
Capital management
Management’s policy is to maintain a capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. Liabilities to equity ratio, net borrowings to equity ratio and
other financial ratios are used by management to achieve an optimal capital structure. Management also monitors
the return on capital as well as the level of dividends to ordinary shareholders. The Group is also responsible for
complying with certain financial ratios as part of capital maintenance conditions imposed externally. To fulfill
this responsibility, the Group regularly monitors these financial ratios and takes proactive measures when
necessary.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-79
25.
Financial Risk Management, Continued
(In millions of won)
December 31, 2023
December 31, 2024
Total liabilities
₩
26,988,754
24,786,759
Total equity
8,770,544
8,072,807
Cash and deposits in banks (*1)
3,163,493
2,022,240
Borrowings (including bonds)
16,529,129
14,550,114
Total liabilities to equity ratio
308%
307%
Net borrowings to equity ratio (*2)
152%
155%
(*1) Cash and deposits in banks consist of cash and cash equivalents and current deposits in banks.
(*2) Net borrowings to equity ratio is calculated by dividing total borrowings (including bonds and excluding lease liabilities
and others) less cash and current deposits in banks by total equity.
(e)
Determination of fair value
(i)
Measurement of fair value
A number of the Group’s accounting policies and disclosures require the determination of fair value, for both
financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or
disclosure purposes based on the following methods. When applicable, further information about the
assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
(ii)
Fair values versus carrying amounts
The fair values of financial assets and liabilities, together with the carrying amounts shown in the consolidated
statements of financial position as of December 31, 2023 and 2024 are as follows:
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-80
25.
Financial Risk Management, Continued
(In millions of won)
December 31, 2023
December 31, 2024
Carrying
amounts
Fair values
Carrying
amounts
Fair values
Financial assets carried at amortized cost
Cash and cash equivalents
₩ 2,257,522
(*1)
2,021,640
(*1)
Deposits in banks
905,982
(*1)
611
(*1)
Trade accounts and notes receivable (*3)
3,218,093
(*1)
3,624,477
(*1)
Non-trade receivables
112,739
(*1)
227,477
(*1)
Accrued income
14,246
(*1)
22,552
(*1)
Deposits
18,378
(*1)
16,747
(*1)
Loans
59,884
(*1)
37,143
(*1)
Financial assets at fair value through profit or
loss
Equity instruments
₩
87,027
87,027
120,501
120,501
Convertible securities
3,127
3,127
1,470
1,470
Derivatives
169,703
169,703
256,251
256,251
Financial assets effective for fair value hedging
Derivatives
—
—
119,098
119,098
Other Financial assets
Lease receivables
4,130
(*1)
10,063
(*1)
Financial liabilities carried at amortized cost
Borrowings
₩ 15,040,986
15,101,258
13,412,275
13,482,726
Bonds
1,488,143
1,479,725
1,137,839
1,142,725
Trade accounts and notes payable
4,175,064
(*1)
4,156,149
(*1)
Other accounts payable
3,276,810
(*1)
2,000,444
(*1)
Security deposits received
153,370
(*1)
160,713
(*1)
Financial liabilities at fair value through profit or
loss
Derivatives
63,526
63,526
10,768
10,768
Financial liabilities effective for fair value
hedging
Derivatives
36,052
36,052
—
—
Other Financial liabilities
Lease liabilities
73,364
(*2)
57,975
(*2)
(*1) Excluded from disclosures as the carrying amount approximates fair value.
(*2) Excluded from the fair value disclosures in accordance with IFRS 7 ‘Financial Instruments: Disclosures’.
(*3) As of December 31, 2024, it includes financial assets amounting to W1,123,869 million held under the business model
to achieve the purpose through the receipt of contractual cash flows and the sale of financial assets are included.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-81
25.
Financial Risk Management, Continued
(iii)
Fair values of financial assets and liabilities
i)
Fair value hierarchy
Financial instruments carried at fair value are categorized into different levels in a fair value hierarchy based on
the inputs used in the valuation techniques. The different levels have been defined as follows:
▪
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
▪
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly
▪
Level 3: inputs for the asset or liability that are not based on observable market data
The Group measures fair value for financial reporting purposes, including fair value measurements categorized
as Level 3, and consults on the fair value assessment process and its results in accordance with the financial
reporting schedule.
ii)
Valuation techniques and inputs for Assets and Liabilities measured by the fair value hierarchy
Fair value hierarchy classifications of the financial instruments that are measured at fair value as of December
31, 2023 and 2024 are as follows:
(In millions of won)
December 31, 2023
Classification
Level 1
Level 2
Level 3
Total
Financial assets at fair value through profit or loss
Equity securities
₩
—
—
87,027
87,027
Convertible securities
—
—
3,127
3,127
Derivatives
—
169,703
—
169,703
Financial liabilities at fair value through profit or loss
Derivatives
₩
—
63,526
—
63,526
Financial liabilities effective for fair value hedging
Derivatives
₩
—
36,052
—
36,052
December 31, 2024
(In millions of won)
Classification
Level 1
Level 2
Level 3
Total
Financial assets at fair value through profit or loss
Equity securities
₩
18,958
—
101,543
120,501
Convertible securities
—
—
1,470
1,470
Derivatives
—
256,251
—
256,251
Financial assets effective for fair value hedging
Derivatives
₩
—
119,098
119,098
Financial liabilities at fair value through profit or loss
Derivatives
₩
—
10,768
—
10,768
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-82
25.
Financial Risk Management, Continued
The valuation techniques and inputs for assets and liabilities measured at fair value those are classified as Level 2 and
Level 3 within the fair value hierarchy as of December 31, 2023 and 2024 are as follows:
(In millions of won)
December 31, 2023
December 31, 2024
Classification
Level 2
Level 3
Level 2
Level 3
Valuation technique
Input
Financial assets at fair value
through profit or loss
Equity securities
₩
—
87,027
—
101,543
Net asset value method
and Comparable
company analysis
Price to book
value ratio
Convertible securities
—
3,127
—
1,470
Blended discount
model and binominal
option pricing model
Discount rate,
stock price and
volatility
Derivatives
169,703
—
256,251
—
Discounted cash flow
Discount rate and
Exchange rate
Financial assets effective for fair
value hedging
Derivatives
₩
—
—
119,098
—
Discounted cash flow
Discount rate and
Exchange rate
Financial liabilities at fair value
through profit or loss
Derivatives
₩
63,526
—
10,768
—
Discounted cash flow
Discount rate and
Exchange rate
Financial liabilities effective for
fair value hedging
Derivatives
₩
36,052
—
—
—
Discounted cash flow
Discount rate and
Exchange rate
iii)
Financial instruments not measured at fair value but for which the fair value is disclosed
Fair value hierarchy classifications, valuation technique and inputs for fair value measurements of the financial
instruments not measured at fair value but for which the fair value is disclosed as of December 31, 2023 and 2024 are
as follows:
(In millions of won)
December 31, 2023
Classification
Level 1
Level 2
Level 3
Valuation technique
Input
Liabilities
Borrowings
₩
—
—
15,101,258
Discounted cash flow
Discount rate
Bonds
—
—
1,479,725
Discounted cash flow
Discount rate
(In millions of won)
December 31, 2024
Classification
Level 1
Level 2
Level 3
Valuation technique
Input
Liabilities
Borrowings
₩
—
—
13,482,726
Discounted cash flow
Discount rate
Bonds
—
—
1,142,725
Discounted cash flow
Discount rate
iv)
The interest rates applied for determination of the above fair value as of December 31, 2023 and 2024 are as
follows:
December 31, 2023
December 31, 2024
Borrowings, bonds and others
4.60%~5.02%
3.70%~3.96%
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-83
25.
Financial Risk Management, Continued
v)
There is no transfer between Level 1, Level 2 and Level 3 for the years ended December 31, 2023 and 2024, and
the changes in financial assets classified as Level 3 of fair value measurements for the years ended December
31, 2023 and 2024 are as follows:
(In millions of won)
Classification
January 1,
2023
Acquisition
Disposal
Valuation
Changes in
Foreign
Exchange
Rates
December 31,
2023
Equity securities
₩
96,064
3,286
(414)
(13,315)
1,406
87,027
Convertible securities
1,797
1,329
—
41
(40)
3,127
(In millions of won)
Classification
January 1,
2024
Acquisition
Disposal
Valuation
Changes in
Foreign
Exchange
Rates
December 31,
2024
Equity securities
₩
87,027
5,470
(128)
(2,809)
11,983
101,543
Convertible securities
3,127
—
(1,838)
—
181
1,470
(f)
Net gains and losses by category of financial instruments
The net gains and losses by category of financial instruments for the years ended December 31, 2022, 2023 and
2024 are as follows:
(In millions of won)
2022
Financial assets
at amortized cost
Financial
liabilities at
amortized cost
Financial
assets at
FVTPL
Financial
liabilities at
FVTPL
Derivatives
(*)
Total
Interest income
₩
85,624
—
—
—
—
85,624
Interest expense
—
(403,415)
—
(11,106)
—
(414,521)
Foreign currency differences
1,061,416
(946,650)
—
(105,492)
—
9,274
Reversal of bad debt expense
569
—
—
—
—
569
Gain or loss on disposal
(37,087)
—
171
(2,672)
—
(39,588)
Gain or loss on valuation
—
—
6,473
220,240
—
226,713
Gain or loss on derivative
—
—
—
—
177,130
177,130
Others
—
—
—
(43)
—
(43)
Total
₩
1,110,522
(1,350,065)
6,644
100,927
177,130
45,158
(*) Derivatives exclude cash flow hedging derivatives.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-84
25.
Financial Risk Management, Continued
(In millions of won)
2023
Financial
assets at
amortized cost
Financial
liabilities at
amortized
cost
Financial
assets at
FVTPL
Financial
assets at
FVOCI
Derivatives
Others
Total
Interest income
₩
134,388
—
—
—
—
276
134,664
Interest expense
—
(720,086)
—
—
—
(3,343)
(723,429)
Foreign currency
differences
108,546
(176,376)
—
—
(36,052)
—
(103,882)
Reversal of bad debt
expense
181
—
—
—
—
—
181
Gain or loss on disposal
(48,600)
—
132
(329)
—
—
(48,797)
Gain or loss on valuation
—
—
(13,274)
—
—
—
(13,274)
Gain or loss on repayment
—
(167)
—
—
—
—
(167)
Gain or loss on derivatives
—
—
—
—
102,116
—
102,116
Total
₩
194,515
(896,629)
(13,142)
(329)
66,064
(3,067)
(652,588)
(In millions of won)
2024
Financial
assets at
amortized cost
Financial
liabilities at
amortized cost
Financial
assets at
FVTPL
Financial
assets at
FVOCI
Derivatives
Others
Total
Interest income
₩
87,510
—
—
—
—
182
87,692
Interest expense
—
(906,766)
—
—
—
(2,874)
(909,640)
Foreign currency
differences
1,189,874
(2,238,150)
—
—
190,906
—
(857,370)
Bad debt expense
(689)
—
—
—
—
—
(689)
Gain or loss on disposal
(7,708)
—
(109)
(18,470)
—
—
(26,287)
Gain or loss on valuation
—
—
(8,590)
—
—
—
(8,590)
Gain or loss on repayment
—
(678)
—
—
—
—
(678)
Gain or loss on
derivatives
—
—
—
—
413,480
—
413,480
Total
₩ 1,268,987
(3,145,594)
(8,699)
(18,470)
604,386
(2,692)
(1,302,082)
26.
Leases
(a)
Leases as lessee
The Group leases buildings, vehicles, machinery and equipment and others. Information about leases for which
the Group is a lessee is presented below.
(i)
Right-of-use assets
Right-of-use assets related to leased properties that do not meet the definition of investment property are
presented as property, plant and equipment (see Note 9(a)).
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-85
26.
Leases, Continued
Changes in right-of-use assets for the years ended December 31, 2023 and 2024 are as follows:
(In millions of won)
2023
Buildings
and
structures
Land
Machinery
and
equipment
Vehicles
Others
Total
Beginning balance
₩ 51,033
51,804
598
8,502
721
112,658
Acquisitions
65,133
—
881
6,698
1,899
74,611
Depreciation
(56,471)
(2,846)
(770)
(7,482)
(780)
(68,349)
Gain or loss on foreign
currency translation
(1,749)
2,291
5
(279)
58
326
Ending balance
₩ 57,946
51,249
714
7,439
1,898
119,246
(In millions of won)
2024
Buildings
and
structures
Land
Machinery
and
equipment
Vehicles
Others
Total
Beginning balance
₩ 57,946
51,249
714
7,439
1,898
119,246
Acquisitions
24,008
1
2,658
7,044
154
33,865
Depreciation
(56,080)
(3,063)
(1,645)
(6,879)
(778)
(68,445)
Gain or loss on foreign
currency translation
13,877
8,410
23
456
292
23,058
Classified as held for sale
(11,599)
(5,585)
—
(1,563)
(44)
(18,791)
Ending balance
₩ 28,152
51,012
1,750
6,497
1,522
88,933
(ii)
Amounts recognized in profit or loss from leases other than leases recorded as right-of-use assets for the
years ended December 31, 2022, 2023 and 2024 are as follows:
(In millions of won)
2022
2023
2024
Interest on lease liabilities
₩
(3,656)
(3,343)
(2,874)
Income from sub-leasing right-of-use assets
541
276
182
Expenses relating to short-term leases
(785)
(241)
(274)
Expenses relating to leases of low-value assets that are not
short-term leases
(632)
(942)
(543)
(iii)
Changes in lease liabilities for the years ended December 31, 2023 and 2024 are as follows:
(In millions of won)
2023
2024
Beginning balance
₩
72,788
73,364
Additions and others
70,716
55,619
Interest expense
3,343
2,874
Repayment of liabilities
(73,483)
(73,882)
Ending balance
₩
73,364
57,975
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-86
26.
Leases, Continued
(iv)
Total cash outflow from leases for the year ended December 31, 2024 amounted to W74,517 million
(2023: W77,733).
(b)
Leases as lessor
(i)
Finance lease
For the years ended December 31, 2023 and 2024, the Group recognized interest income on lease receivables of
W276 million and W182 million, respectively.
The following table sets out a maturity analysis of lease receivables, showing the undiscounted lease payments
to be received after the reporting date.
(In millions of won)
December 31, 2023
December 31, 2024
6 months or less
₩
3,580
3,255
6-12 months
597
3,255
1-2 years
—
3,797
Total undiscounted lease receivable
₩
4,177
10,307
Unearned finance income
(47)
(244)
Net Investment in the lease
₩
4,130
10,063
(ii)
Operating lease
The Group leases out investment property and a portion of property, plant and equipment as operating leases
(see Note 9 and 11).
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-87
27.
Cash Flow Information
(a)
Details of cash flows generated from operations for the years ended December 31, 2022, 2023 and 2024 are as
follows:
(In millions of won)
2022
2023
2024
Loss for the year
₩(3,195,585)
(2,576,729)
(2,409,300)
Adjustments for:
Income tax expense (benefit) (Note 22)
(237,785)
(762,712)
217,760
Depreciation and amortization (Note 18)
4,557,457
4,213,742
5,125,637
Gain on foreign currency translation
(702,144)
(313,378)
(587,019)
Loss on foreign currency translation
449,980
241,701
979,061
Expenses related to defined benefit plans (Note 13)
168,260
149,937
130,014
Gain on disposal of property, plant and equipment
(25,737)
(34,961)
(51,792)
Loss on disposal of property, plant and equipment
54,432
102,453
76,771
Impairment loss on property, plant and equipment
1,260,436
60,072
98,525
Reversal of impairment loss on property, plant and
equipment
(3,181)
(7)
(4,314)
Gain on disposal of intangible assets
—
(1,989)
(25)
Loss on disposal of intangible assets
193
55
388
Impairment loss on intangible assets
136,372
54,833
72,490
Reversal of impairment loss on intangible assets
(1,975)
(242)
(14)
Impairment loss on investments
7,736
—
—
Expense on increase of provision
253,075
101,846
119,141
Finance income
(607,501)
(594,944)
(511,068)
Finance costs
781,205
1,162,598
1,480,007
Equity in loss (income) of equity method accounted
investees, net
(5,558)
3,061
(5,412)
Others
(1,681)
(7,030)
(85,651)
Changes in:
Trade accounts and notes receivable
1,833,491
(1,013,938)
(395,513)
Other accounts receivable
(47,389)
39,377
(142,775)
Inventories
390,672
336,993
(85,850)
Other current assets
435,838
92,983
(14,479)
Other non-current assets
(10,125)
1,151
2,537
Trade accounts and notes payable
(282,082)
323,548
(46,796)
Other accounts payable
(625,606)
(47,798)
(529,621)
Accrued expenses
(514,500)
(47,088)
92,474
Provisions
(259,969)
(179,969)
(134,684)
Advances received
(1,977)
(19,461)
(16,161)
Proceeds from settlement of derivatives
—
—
35,757
Other current liabilities
(4,188)
(33,367)
(4,050)
Defined benefit liabilities, net
(381,405)
(45,123)
(38,018)
Long-term advances received
—
1,580,222
—
Other non-current liabilities
167,868
33,493
5,436
Cash generated from operations
₩ 3,588,627
2,819,329
3,373,456
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-88
27.
Cash Flow Information, Continued
(b)
Changes in liabilities arising from financing activities for the years ended December 31, 2023 and 2024 are as
follows:
(In millions of won)
Non-cash transactions
January 1,
2023
Cash flows from
financing activities
Gain or loss on
foreign currency
translation
Interest expense
Others
December 31, 2023
Short-term borrowings
₩
2,578,552
(716,386)
13,469
—
—
1,875,635
Long-term borrowings
10,964,112
2,139,554
50,174
3,271
8,240
13,165,351
Bonds
1,448,746
35,276
2,237
1,717
167
1,488,143
Lease liabilities
72,788
(73,483)
(312)
—
74,371
73,364
Dividend payable
—
(34,098)
(44)
—
41,444
7,302
Total
₩ 15,064,198
1,350,863
65,524
4,988
124,222
16,609,795
(In millions of won)
Non-cash transactions
January 1,
2024
Cash flows from
financing
activities
Gain or loss on
foreign currency
translation
Interest expense
Classification
of liabilities
held for sale
Others
December 31,
2024
Short-term borrowings
₩
1,875,635
(1,065,878)
159,838
—
—
—
969,595
Long-term borrowings
13,165,351
(726,352)
1,051,834
4,203
(1,060,592)
8,236
12,442,680
Bonds
1,488,143
(370,000)
18,004
1,692
—
—
1,137,839
Lease liabilities
73,364
(71,008)
16,752
—
(6,772)
45,639
57,975
Dividend payable
7,302
(136,519)
268
—
—
135,339
6,390
Total
₩
16,609,795
(2,369,757)
1,246,696
5,895
(1,067,364)
189,214
14,614,479
(c)
Details of significant non-cash transactions for the years ended December 31, 2022, 2023 and 2024 are as
follows:
(In millions of won)
2022
2023
2024
Changes in other accounts payable arising from the purchase
of property, plant and equipment
₩
480,322
(348,046)
(630,267)
Changes in other accounts payable arising from the purchase
of intangible assets
(113,185)
(27,918)
(137,918)
Recognition of right-of-use assets and lease liabilities
54,927
74,611
33,865
Reclassification of the current portion of borrowings/bonds
(3,626,345)
(3,441,686)
(6,559,088)
Classification of assets held for sale
—
—
983,317
Classification of liabilities held for sale
—
—
1,656,841
28.
Related Parties and Others
(a)
Related parties
Details of related parties as of December 31, 2024 are as follows:
Classification
Description
Associates (*)
Paju Electric Glass Co., Ltd. and others
Entity that has significant influence over the
Parent Company
LG Electronics Inc.
Subsidiaries of the entity that has significant
influence over the Parent Company
Subsidiaries of LG Electronics Inc.
(*) Details of associates are described in Note 8.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-89
28.
Related Parties and Others, Continued
(b)
Details of major transactions with related parties for the years ended December 31, 2022, 2023 and 2024 are as
follows:
(In millions of won)
2022
Purchase and others
Sales
and others
Dividend income
Purchase of raw
material and
others
Others (*1)
Associates
AVATEC Co., Ltd.
₩
—
—
64,550
3,617
Paju Electric Glass Co., Ltd.
—
4,361
245,962
2,942
WooRee E&L Co., Ltd.
—
—
12,321
2
YAS Co., Ltd.
—
100
14,291
37,989
Material Science Co., Ltd.
—
—
17
—
Entity that has significant influence over the
Parent Company
LG Electronics Inc.(*2)
₩
238,358
—
19,808
655,179
Subsidiaries of the entity that has significant
influence over the Parent Company
LG Electronics India Pvt. Ltd.
₩
70,514
—
—
519
LG Electronics Vietnam Haiphong Co., Ltd.
468,380
—
—
882
(In millions of won)
2022
Purchase and Others
Sales and others
Dividend income
Purchase of raw
material and
others
Others (*1)
LG Electronics Nanjing New Technology
Co., Ltd.
₩
334,099
—
—
1,178
LG Electronics RUS, LLC
23,458
—
—
414
LG Electronics do Brasil Ltda.
88,835
—
—
200
LG Innotek Co., Ltd.
27,698
—
10,122
79,515
LG Electronics Mlawa Sp. z o.o.
1,178,140
—
—
1,089
LG Electronics Reynosa, S.A. DE C.V.
1,195,146
—
—
958
LG Electronics Egypt S.A.E.
72,055
—
—
372
LG Electronics Japan, Inc.
—
—
—
7,323
P.T. LG Electronics Indonesia
531,543
—
—
1,415
LG Electronics Taiwan Taipei Co., Ltd.
3,433
—
—
615
LG Technology Ventures LLC
—
—
—
4,922
HI-M Solutek Co., Ltd
—
58
9,258
LG Electronics U.S.A., Inc.
—
—
—
2,315
Others
572
—
592
1,521
Total
₩
4,232,231
4,461
367,721
812,225
(*1) Others include the amount of the acquisition of property, plant and equipment.
(*2) Others for LG Electronics Inc. include the amount of the acquisition of property, plant and equipment W517,476 million.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-90
28.
Related Parties and Others, Continued
(In millions of won)
2023
Purchase and Others
Sales and others
Dividend income
Purchase of raw
material and
others
Others (*1)
Associates
AVATEC Co., Ltd.
₩
—
—
43,662
11,003
Paju Electric Glass Co., Ltd.
—
15,200
176,831
4,341
WooRee E&L Co., Ltd.
—
—
7,853
513
YAS Co., Ltd.
—
—
9,832
23,202
Material Science Co., Ltd.
—
—
—
179
Entity that has significant influence over the
Parent Company
LG Electronics Inc.(*2)
₩
231,935
—
22,370
501,094
Subsidiaries of the entity that has significant
influence over the Parent Company
LG Electronics India Pvt. Ltd.
₩
47,031
—
—
270
LG Electronics Vietnam Haiphong Co., Ltd.
434,789
—
—
7,090
(In millions of won)
2023
Purchase and others
Sales and others
Dividend income
Purchase of raw
material and
others
Others (*1)
LG Electronics Nanjing New Technology
Co., Ltd.
₩
350,207
—
—
451
LG Electronics do Brasil Ltda.
29,249
—
—
316
LG Innotek Co., Ltd.
7,754
—
14,970
100,272
LG Electronics Mlawa Sp. z o.o.
811,880
—
—
1,611
LG Electronics Reynosa S.A. DE C.V.
826,547
—
—
810
LG Electronics Egypt S.A.E
20,225
—
—
66
LG Electronics Japan, Inc.
114
—
—
6,278
LG Electronics RUS, LLC
360
—
—
2,359
LG Electronics U.S.A., Inc.
—
—
—
2,177
P.T. LG Electronics Indonesia
448,528
—
—
2,231
LG Electronics Nanjing Vehicle Components
Co.,Ltd.
1,414
—
—
—
LG Technology Ventures LLC
—
—
—
2,596
HI-M Solutek Co., Ltd
—
—
9
7,316
Others
15
—
142
1,502
Total
₩
3,210,048
15,200
275,669
675,677
(*1) Others include the amount of the acquisition of property, plant and equipment.
(*2) Others for LG Electronics Inc. include the amount of the acquisition of property, plant and equipment W320,555 million.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-91
28.
Related Parties and Others, Continued
(In millions of won)
2024
Purchase and others
Sales
and others
Dividend income
Purchase of raw
material and
others
Others (*2)
Associates
AVATEC Co., Ltd.(*1)
₩
—
200
52,983
2,947
Paju Electric Glass Co., Ltd.
—
—
237,002
8,428
WooRee E&L Co., Ltd.(*1)
—
—
5,045
32
YAS Co., Ltd.(*1)
—
—
5,266
7,578
Material Science Co., Ltd.
—
—
3,579
1,512
Entity that has significant influence over the
Parent Company
LG Electronics Inc.(*3)
₩
349,194
—
19,959
354,362
Subsidiaries of the entity that has significant
influence over the Parent Company
LG Electronics India Pvt. Ltd.
₩
52,736
—
—
275
LG Electronics Vietnam Haiphong Co., Ltd.
306,727
—
—
5,945
(In millions of won)
2024
Purchase and Others
Sales and others
Dividend income
Purchase of raw
material and
others
Others (*2)
LG Electronics Nanjing New Technology
Co., Ltd.
₩
379,241
—
—
629
LG Electronics do Brasil Ltda.
32,165
—
—
248
LG Innotek Co., Ltd.
10,999
—
18,166
72,123
LG Electronics Mlawa Sp. z o.o.
977,531
—
—
1,105
LG Electronics Reynosa S.A. DE C.V.
973,432
—
—
746
LG Electronics Egypt S.A.E
24,454
—
—
32
LG Electronics Japan, Inc.
—
—
—
6,250
LG Electronics RUS, LLC
—
—
—
4,005
LG Electronics U.S.A., Inc.
—
—
—
2,128
P.T. LG Electronics Indonesia
482,099
—
—
1,254
HI-M Solutek Co., Ltd
—
—
—
9,636
LG Technology Ventures LLC
—
—
—
1,319
Others
330
—
462
1,579
Total
₩
3,588,908
200
342,462
482,133
(*1) For the year ended December 31, 2024, WooRee E&L Co., Ltd., AVATEC Co., Ltd. and YAS Co., Ltd. were excluded
from related parties and others due to loss of significant influence and transaction amount is the amount prior to
exclusion.
(*2) Others include the amount of the acquisition of property, plant and equipment.
(*3) Others for LG Electronics Inc. include the amount of the acquisition of property, plant and equipment W184,999 million.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-92
28.
Related Parties and Others, Continued
(c)
Trade accounts and notes receivable and payable as of December 31, 2023 and 2024 are as follows:
(In millions of won)
Trade accounts and notes receivable
and others
Trade accounts and notes payable
and others
December 31,
2023
December 31,
2024
December 31,
2023
December 31,
2024
Associates
₩
AVATEC Co., Ltd.(*1)
—
—
4,775
—
Paju Electric Glass Co., Ltd.
—
—
56,136
64,140
WooRee E&L Co., Ltd.(*1)
695
—
2,219
—
YAS Co., Ltd.(*1)
—
—
12,483
—
Material Science Co., Ltd.
—
—
118
261
Entity that has significant influence over the
Parent Company
LG Electronics Inc. (*2)
₩
63,284
179,710
1,140,260
1,071,592
Subsidiaries of the entity that has significant
influence over the Parent Company
LG Electronics India Pvt. Ltd.
₩
2,013
3,317
35
—
LG Electronics Vietnam Haiphong Co., Ltd.
76,952
72,521
1,403
921
LG Electronics Nanjing New Technology
Co., Ltd.
38,502
61,922
27
15
LG Electronics do Brasil Ltda.
6,252
13,184
32
—
LG Innotek Co., Ltd. (*3)
3,002
1,803
216,049
207,258
(In millions of won)
Trade accounts and notes receivable
and others
Trade accounts and notes payable
and others
December 31,
2023
December 31,
2024
December 31,
2023
December 31,
2024
LG Electronics Mlawa Sp. z o.o.
₩
101,357
149,789
—
131
LG Electronics Reynosa, S.A. DE C.V.
64,208
55,500
109
—
LG Electronics Japan, Inc.
114
—
632
548
P.T. LG Electronics Indonesia
46,146
63,719
108
53
LG Electronics Taiwan Taipei Co., Ltd.
—
—
115
63
LG Electronics Egypt S.A.E
369
3,877
1
7
Others
251
261
2,184
5,779
Total
₩
403,145
605,603
1,436,686
1,350,768
(*1) For the year ended December 31, 2024, as it was excluded from related parties and others due to loss of significant
influence, there are no outstanding receivables or payables.
(*2) Trade accounts and note payable and others for LG Electronics Inc. as of December 31, 2023 and 2024 includes long-
term borrowings of W1,000,000 million (see Note 12.(c)).
(*3) Trade accounts and note payable and others for LG Innotek Co., Ltd. as of December 31, 2023 and 2024 includes
deposits received amount W180,000 million from lease agreement.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-93
28.
Related Parties and Others, Continued
(d)
Details of significant financial transactions with related parties and others for the years ended December 31,
2023 and 2024, are as follows:
2023
(In millions of won)
Company Name
Borrowings
Collection of loans
Associates
WooRee E&L Co., Ltd.
₩
—
183
Entity that has significant influence over the
Company
LG Electronics Inc.
1,000,000
—
The Group entered into a loan agreement with LG Electronics Inc. on March 27, 2023 for a total borrowing amount of
W1,000,000 million, and received W650,000 million on March 30, 2023 and W350,000 million on April 20, 2023.
2024
(In millions of won)
Company Name
Capital increase
Collection of loans
Associates
WooRee E&L Co., Ltd.(*)
₩
—
256
Entity that has significant influence over the
Company
LG Electronics Inc.
436,031
—
(*) For the year ended December 31, 2024, it was excluded from related parties and others due to loss of significant influence
and transaction amount is the amount prior to exclusion.
There were no significant financing transactions with related parties for the year ended December 31, 2022.
(e)
Key management personnel compensation
Details of compensation costs of key management for the years ended December 31, 2022, 2023 and 2024 are as follows:
(In millions of won)
2022
2023
2024
Short-term benefits
₩
2,305
2,291
2,397
Expenses related to the defined benefit plan
417
355
604
₩
2,722
2,646
3,001
Key management refers to the registered directors who have significant control and responsibilities over the Parent
Company’s operations and business.
(f)
At the end of the reporting period, the Group did not set an allowance for doubtful accounts on the balance of
receivables for related parties.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-94
29.
Assets and Liabilities Held for Sale (Disposal Group)
For the year ended December 31, 2024, management of the Group decided to sell 80% of its stake in LG Display
(China) Co., Ltd. and 100% of its stake in LG Display Guangzhou Co., Ltd. to TCL CSOT. The contract was signed
on September 26, 2024, and the transaction is expected to be completed within one year. As a result, the assets and
liabilities held by LG Display (China) Co., Ltd. and LG Display Guangzhou Co., Ltd. are presented as assets and
liabilities held for sale.
(a)
Details of assets and liabilities held for sale
(In millions of won)
December 31, 2024
Disposal Group(*)
Cash and cash equivalents
₩
158,415
Trade accounts and notes receivable, net
11,131
Other accounts receivables, net
10,809
Inventories
101,998
Prepaid income taxes
14,402
Other current assets and others
45,733
Property, plant and equipment, net
611,689
Intangible assets, net
775
Deferred tax assets
28,365
Total
₩
983,317
Liabilities in the Disposal Group
Trade accounts and notes payable
₩
466,907
Current financial liabilities
917,620
Other accounts payable
52,097
Accrued expenses
67,181
Advances received
2,364
Other Current liabilities and others
927
Non-current financial liabilities
149,745
Total
₩
1,656,841
(*) There is no impairment loss recognized for assets held for sale, as the net fair value of the disposal group is expected
to exceed the carrying amount.
(b) Accumulated income directly recognized as other comprehensive income in relation to the disposal group classified
as held for sale is W291,363 million of foreign currency translation differences.
LG DISPLAY CO., LTD. AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
For the years ended December 31, 2023 and 2024
F-95
30.
Subsequent Event
The disposal of 80% of its stake in LG Display (China) Co., Ltd. and 100% of its stake in LG Display Guangzhou Co.,
Ltd. to TCL CSOT was completed on April 1, 2025.