LG Display (034220.KS) has effectively dominated the OLED panel market for Apple Watch. As rival Japan Display Inc. (JDI) withdrew from the business due to deteriorating profitability, LG Display has become the sole supplier of all Apple Watch panels. With a firm monopoly established in the smartwatch panel market — widely regarded as a high-margin segment — the company's earnings momentum is expected to accelerate further this year.
Rival's Exit Fully Absorbed — Market Share Hits All-Time High
LG Display's revenue share in the smartwatch OLED panel market reached 43.7% last year, according to market research firm Omdia on Tuesday. That represents a 4.0 percentage point increase from 39.7% the previous year, marking the highest level since the company's founding. Industry observers say the figure effectively reflects the achievement of supplying 100% of Apple Watch panels.
JDI's Apple Watch panel shipments plunged from 850,000 units in the first quarter of last year to just 5,000 in the third quarter, before falling to zero in the fourth quarter as the company exited the market entirely. LG Display, by contrast, shipped 5.8 million units in the first quarter, 7.8 million in the second quarter, and 11.2 million in the third quarter. In the fourth quarter, after its competitor fully withdrew, LG Display shipped 7.1 million units as the sole supplier, completely filling the void.
Behind this dominant position lies LG Display's differentiated technology. The company supplies low-temperature polycrystalline oxide (LTPO) OLED panels, a highly advanced technology that reduces power consumption significantly by lowering the screen refresh rate to as low as 1Hz. The technology is essential for "Always-On Display (AOD)" functionality, which keeps the screen continuously active. Leveraging this high-barrier technology, LG Display is maximizing revenue by covering the entire Apple Watch lineup — from the standard series and the budget SE model to the top-tier Ultra.
Unrivaled LTPO OLED Technology Creates High Entry Barriers
The expanded market position is translating into clear expectations for earnings improvement. The consensus estimate among securities analysts for LG Display's operating profit this year stands at 1.3043 trillion won ($960 million), according to financial data provider FnGuide. That would represent a 152% surge from 517 billion won last year.
Operating Profit Forecast at 1.3 Trillion Won — "Focusing on Strengthening Fundamentals"
Samsung Securities also projected in a recent report that LG Display will turn profitable this year across all OLED segments, including mobile, TV, and tablets. "The shift in mobile clients' sales strategies toward higher-end models will increase the share of premium products, while losses in the IT segment are expected to narrow," analyst Jang Jeong-hun at Samsung Securities said. The company's LCD business for IT applications is also accelerating its structural overhaul by reducing the share of low-margin products.
Meanwhile, LG Display plans to continue investing for future growth while focusing on strengthening its financial fundamentals. As disclosed at this month's shareholders' meeting, the company will execute capital expenditure in the mid-2 trillion won range this year, within limits that do not compromise financial soundness. The strategy prioritizes upgrading existing production lines and concentrating on new technology research and development, rather than building new production lines.
