LG Display Co., Ltd.

Hello. Thank you for joining us today. We will now begin the LG Display 2020 2nd Anniversary Performance Announcement Conference Call. This conference call will be held after the announcement from the LG Display. We will have a Q&A session with the investors who participated. If you have any questions, please press the star and number on the call button. We will now begin the announcement from the LG Display. Good morning and good evening. First of all, thank you all for joining this conference call. And now we'll begin the conference out of fiscal year 2020 second quarter earnings results by LG display. This conference will start with a presentation followed by a division of Q&A session. If you have a question, please press start one, that is start and one on your phone during the Q&A. Now we shall commence the presentation on the fiscal year 2020 second quarter earnings results by LG display.

Good afternoon. This is Kim Hee-yeon in charge of LG Display's IR. On behalf of the company, let me thank all the participants at this conference call. TV Marketing Kim Chang-han, IT Marketing Kwon Jae-young, participated.

Today, I am joined by the CFO, D.H. Seo, Seung-min Im, in charge of Corporate Business Management, Matthew Kim of TV Marketing, and Jae-young Kwon of IT Marketing.

The actual presentation will be held for about an hour, and will be held in the same way. 2020년 2분기 경영 실적 및 전망에 이어서 질의응답 순서로 진행하도록 하겠습니다.

This conference call will be conducted for one hour in both Korean and English, starting with a presentation on the financial results of Q2 2020 and the company's outlook, followed by Q&A.

2분기 실적과 관련된 상세 자료는 당사 홈페이지 내 투자 정보의 IR presentation 문서를 참조하시기 바라며

Please refer to the IR presentation document in the company's website for more details on the financial results of Q2 2020. For those joining through the webcast, please refer to the details under widget on your screen. Before we begin the presentation, please take a moment to read the disclaimer.

Please note that today's results are based on consolidated KIFRS standards prepared for your benefit

and have not yet been audited by an outside auditor.

그러면 지금부터 2분기 실적을 발표하도록 하겠습니다.

With that said, we will now start with the presentation on Q2 2020 earnings results. 먼저 2분기 경영 실적입니다. Let me start off with our business performance in Q2.

매출액은 코로나 이슈로 인한 TV 및 모바일 제품 출하 부진에도 불구하고 IT 제품 출하 증가에 힘입어 전분기 대비 12% 상승한 5조 3,070억 원을 기록했습니다.

Revenue in Q2 was 5.307 trillion won, up 12% quarter on quarter. There was increase in IT product shipment despite the slowdown in TV and mobile shipment due to COVID-19.

Operating loss was 517 billion won, showing an increase quarter on quarter.

Despite the growth in revenue, fixed cost burden increased following the production adjustment to respond to demand uncertainty, and also because of the demand volatility and seasonality due to the contraction in the upstream industries like the smartphone.

The sales profit rate is minus 10%, EBITDA margin rate is 8%, and the short-term loss is 5,038 billion won.

Operating margin was minus 10%, EBITDA margin 8%, and net loss was 503.8 billion won.

Next is area shipment and ASP. Corona 기간 중 유통 매장 폐쇄로 TV 중심을 출하 부진이 주된 요인입니다.

Area shipment in Q2 was 6.7 million square meters, down 4% QOQ. It is owed mostly to slowdown in TV shipments following retail shutdowns under COVID-19.

반면 면적당 판가는 자사가 강점을 보유한 IT 제품의 출하 확대로 인해 전분기대비 15%,

ASP was $654, up 15% QOQ and up 44% YOY. This is due to growth in shipment of IT products where the company has unique strengths.

The company's production capacity was reduced by 4% QOQ as downsizing of low-margin TV fab continues.

It is a decrease by 29% YOY. Next is Q2 Revenue Breakdown by Product Segment.

TV panel chura gamso, What is noteworthy in Q2 revenue is that share of IT was 52%, going over the 50% mark.

This is largely attributable to the COVID triggered increase in work from home and online education. TV's revenue share was 23%, down 8 percentage points, QOQ, due to decrease in TV panel shipment and LCD panel price. Mobile and other products share was 25%, down 7 percentage points, QOQ, due to demand slowdown in upstream industries like smartphone and auto. Next is the company's financial position and ratios. The company's inventory at the end of Q2 was 2.0394 trillion won. Down 12% QOQ. There was production adjustment in response to the pandemic-related demand slowdown and uncertainties. As for financial ratios, liabilities-to-equity ratio and net debt-to-equity ratio rose slightly QOQ. Cash flow at the end of the quarter was 3.5991 trillion won, staying flat from the previous quarter despite the increase in net loss thanks to stronger financial management such as more efficiency in working capital.

마지막으로 자사의 2020년 3분기 가이던스입니다.

Next is the company's guidance for Q3 2020.

3분기는 코로나 사태 장기화에 따른 리스크 요인은 여전하나, 자사의 경우 중국 OLED 펩 양산 본격화 및 스마트폰용 플라스틱 OLED 출하 확대, IT 차별화 제품의 공급 확대 등으로 매출 확대와 손익 개선이 기대됩니다.

In Q3, although the risks from COVID-19 continue as the pandemic lingers on, revenue growth and profitability improvement are expected for the company. Mass production will begin at Chinese OLED FAB, shipment of P-OLED for smartphones is likely to grow, and differentiated IT products will increase. As a result, it is expected that the company will recover the revenue before the LCD structure innovation, thanks to realignment around high-value ad businesses despite the capacity decrease following SAP downsizing.

Next is presentation by the company CFO, D.H.

Seo.

Hello, I'm D.H. Seo, CFO of LG Display.

Good morning to our shareholders, investors, and analysts. I am D.H. Seo, CFO of LG Display.

COVID-19 and its repercussions are lasting longer than expected, heightening uncertainties in the market and business environment.

First and foremost, I wish everyone in your family health and safety.

Allow me to add some more details on the company's Q2 performance.

There were both positive and negative impact from COVID-19.

COVID-19 COVID-19 COVID-19

and subsequent offline retail shutdowns, market demand for mobile products also shrank.

On the other hand, the spread of home work and online classes is a new life style and a new opportunity factor. This leads to an increase in the sales of IT products with different strengths, and the evaluation of the area increased by 15% compared to the previous year, and increased by 44% compared to the previous year,

On the other hand, work from home and online schooling have emerged as new opportunities as part of our new lifestyle. This has led to increase in sales of IT products where the company has unique strengths. ASP rose 15% QOQ and 44% YOY, while total revenue was up 12% QOQ. ASP recovered to the mid-$650 level, the highest in 22 quarters since Q4 2014, as the company's business realignment around OLED steadily progressed.

Despite the growth in revenue, operating loss increased QOQ.

There was production adjustment of TV and mobile products in response to demand uncertainty and slowdown in upstream industry, which increased the fixed cost burden. And there was also decline in ASP, mostly coming from LCD, which put a further drag on profitability. Next is Q3 2020 outlook and the company's direction.

Although the macro environment in Q3 will not be favorable due to the lingering COVID impact,

the company will be able to show part of the outcome of its business realignment efforts, such as mainstreaming large OLED, P-OLED business turnaround, and LCD structural innovation.

OLED TV had difficulties in dispatching its technology due to the COVID-19 pandemic, but we have established the best conditions for production, and have started production in Gwangju PEP since July. Compared to domestic PEPs,

For OLED TV, there were some challenges due to COVID-19, such as difficulty sending our engineers, but we were able to establish the optimum conditions for mass production and enabled mass production to begin in July. As the fab has newer equipment compared to domestic fabs, which can support high efficiency and productivity, we will start seeing valuable impact soon.

Based on this, we will do our best to improve the production demand of the 77-inch, 48-inch, and 65-inch, 55-inch MMG lines to the existing level in the short term and to meet the demand demand in the second half. based on this we will improve the mass production yield for 77 inch 48 inch and 65 inch 55 inch mmg line to the existing fab level

in a short period of time and ensure that we can respond to the market demand in the second half. The annual sales target is planned at high 4 million to 5 million, but given the persistent COVID risks, we will remain flexible to the market environment as we try to maximize sales opportunities.

As for pOLED, the favorable seasonality is expected to pull up the shipment of new products for the strategic client.

There have been many challenges but we were able to stabilize the product quality and yield, and we'll now focus on ensuring reliable supply.

In the case of IT, it is decided that the opportunity factors of home work and online classes, which have become a new trend since the COVID-19 pandemic, will continue. We will continue to expand the opportunity factors by responding closely to customers' demands, focusing on IT products that have their own distinctive strengths.

For IT, the new COVID-led trends of working from home and online education are expected to remain opportunities. The company will keep capturing such opportunities by responding without delay to clients' needs with IT products where the company has unique strengths.

Let me also say a few words about the path of our LCD structural innovation.

The purpose of this is to further strengthen the company's already competitive fab and products. This is especially so for IT. And for TV, we will also keep strengthening our competitiveness based on the Guangzhou FAB, where the company has market competitiveness.

However, for more fundamental business normalization, the results of the three key tasks Based on the performance to be achieved in our major business areas, significant improvement in profitability is also expected in Q3 from the previous quarter.

But to make sure we have a fundamentally sound business structure, we need to see results from the three core projects at the same time. The company's performance will be on an upward trend, but there will be some ups and downs from quarter to quarter, depending on factors like COVID-19 or demand for individual products like the smartphone.

Next, I'd like to talk about management and financial management activities.

Next is management direction and financial management.

The ongoing pandemic defies easy prediction.

To respond to an environment with growing volatility, the company will undertake early financing and stronger capex and working capital management under the worst-case scenario. That concludes the company's presentation on Q2 performance and Q3 outlook. I hope to come back to you at the next earnings release in October with more improved performance and outlook.

Thank you very much for your attention.

That brings us to the end of earnings presentation for Q2 2020. We will now take questions.

Operator, please commence with the Q&A session. Now Q&A session will begin. Please press Start 1, that is Start N1, if you have any questions. Questions will be taken according to the order you have pressed the number Start 1. For cancellation, please press Start 2, that is Start N2, on your phone. In order to allow as many Q&A chances as possible within the restricted time, we do appreciate only two questions per participant. The first question will be presented by Dongwon Kim from KB Securities. Please go ahead with your question.

Yes, thank you for your question. I have two questions for OLED. First, I would like to ask about the plan for the ramp-up of the Gwangju Line in the second half of the year and the strategy for the large-scale OLED paneling in the future. Next, I would like to ask about the plan for the I have two questions about OLED.

First is about the ramp-up plan at the Guangzhou line in the second half of this year. And along with that, what is the company's plan for the production of large OLED? And the second question is about P-OLED. So what is your outlook for the P-OLED utilization as well as plans for improving profitability?

Yes, I will answer the first question. As I mentioned earlier, there have been some difficulties, but we have started mass production in July. As long as there are no major changes to the future ramp-up, we will continue to improve the level of loading capacity uh foreign However, due to the COVID-19 situation, there will be a change in the economic blockade or distribution clause of each country. This will affect our sales, but we have been through many difficult situations in the second quarter, so even if there is an issue with some distribution, we will continue to promote online sales, Now, this is in response to your first question.

As was reported earlier, there have been many challenges in the early part of this year. But in the end, we were able to start mass production in July this year. And also, based on this, the ramp-up will move on as scheduled. In other words, we will try to enable loading of the full capacity, 60,000, as soon as possible. And for the year, now, of course, in the second quarter, there was sales slowdown because of the COVID-19 impact. But then, for the year, the target is to have the high 4 million to 5 million units. according to our sales plan. Of course, this also depends on the situation with COVID-19. For example, the lockdowns in many economies or the reopening of the economies and also the retail shutdown or reopening of the shutdown. So, of course, there would be still an impact from COVID-19. But then, since we have already gone through the difficulties and challenges in the second quarter, we now have the experience to deal with these challenges. So now if there are continuing difficulties, then let's say if there are continued shutdown in the retail side, then we could do some expansion of sales on the online channels or also work with the customers to have promotions or other events in order to drive sales. So we believe that through such efforts, we will be able to meet the sales plan of high 4 million to 5 million units.

Yes, I will answer the second question. In the second half of the year, we have GumiPAP and PazPAP, but PazPAP is probably planning to operate as a full-fledged system. Therefore, from a profit-oriented point of view, if we use a full-fledged system, I think it will be a very meaningful profit-oriented improvement. I will answer this question.

And regarding your second question about the utilization of the small to medium P-OLED in the second half of this year, of course, we have the FAB in Kumi and Paju. But especially for the Paju FAB, the plan is to have full utilization. So assuming full utilization, then we believe that this is also going to have a meaningful impact on improving profitability.

다음 질문 부탁드립니다. 다음으로 질문해 주실 분은 DB 투자증권의 권성률 님입니다. The next question will be presented by Sungryul Kwon from DB Financial Investment. Please go ahead with your question.

네, 안녕하세요. 질문 기회 주셔서 감사하고요. 저는 두 가지 질문드리겠습니다. 첫 번째는 IT용 패널인데요. 어떻게 보면 이 IT용 패널이 It may be considered the most commodity, but on the other hand, it is also the most profitable product among our items, but I would like to hear the explanation of the factors that can cause such high profits, that is, the factors that make it different from other companies. And if it becomes money for IT, if other display companies allocate more capa for IT, this is also too much. I'm actually a little worried about whether we'll be able to step on the train of LCD TVs. The first question is about what kind of replacement options are available. The second question is about the use of plastic OLEDs, that is, pure red lines. I'd like to hear a little more about that. So E6 page 2, E6 page 1, E5 line. In the second half of the year, these lines are mature for overseas strategy customers. You talked about full operation earlier, but if it becomes the second half of next year, there are a lot of concerns about how to turn this line. So, if we want to take it to a stable level, we have to overcome the second half well, and we have to think more about how to use each line, but I want to hear more about how to use each line of this P-OLED. That's all.

Now, I also have two questions. Now, first is about the panel for IT products. Now, perhaps the IT panel products have become the, let's say, they have become the most commodified. But also, on the other hand, we see that it is the most profitable for the company. So how do you see as the, so what do you see as the success factors in the high profitability for the company's IT products? So in other words, how do you differentiate yourselves in your IT products from other companies? And also related question is, now if the products for IT are so profitable, then it's also likely that the peers might decide to allocate more capacity to IT products as well. Then does this mean that it's likely that the IT products would also walk the path of LCD TV like before? So does the company have any plans against this possible scenario? And the second question is about your plans to utilize the plastic OLED line, so specifically the E6, page 2, page 1, the E5 line. So, of course, in the second half, given that this is the high season for the overseas strategic client, I'm sure that there are no worries about utilization of the lines, so much so that you even mentioned full utilization. But then going into next year, then the situation is going to be different. So to make sure that you have stable operation of the lines for the year, then this means that you also have to wisely overcome the non-high season, the slow season. So that means that you need to have careful planning on utilization of each line. So I would just like to hear about such details if there are.

First of all, I would like to answer your question. You asked about expectations and concerns about IT. We understood the reason why we can make high profits from IT products and where they have a different competitiveness.

Regarding your first question, that was about expectations or concerns about IT products. So I take it that your question was about the reasons for the company's high profitability being gained from IT products and how we are able to differentiate ourselves in our IT products from others.

The IT panel is running 100% with IPS, and the part that can be more discriminatory is the oxide technology. So, based on IPS, we are adding the oxide technology, and I think it has a discriminatory competitiveness in that area. And then, until that process comes, for example, in the laptop, As you would know, for our IT panel, we have 100% IPS.

So it is 100% based on IPS, and on top of that, there is the oxide technology that we utilize. So I believe that this is the combination of this IPS and oxide technology that give us the differentiating factor compared to other peers and thus the competitiveness. And also in the course of that, we have also restructured the low-value-add businesses or the products like the TN type, for example, for notebooks. So the fact that we have focused on the high-value ad products, I believe, is the success factor in the IT products today.

And then, in the same way as the competitors, like the LCD TVs, we have been using wireless technology for 3-4 years, depending on the technology we have. I think we have no choice but to use a strategy that looks ahead and is prepared in advance. In the field of oxide-based technology, we are especially concerned about the possibility of discrimination in the field of oxide. So, through technology, we are making a lot of efforts to expand the catch-up strategy of competitors.

And also regarding your question on concerns over the perhaps the possible repeat of the LCD business in the plastic OLED as well, in the IT products as well. Now, yes, I think in this case, all we can do is make sure that we look ahead one to two years or even three years in terms of our technology, especially for oxide. And in the oxide-based technology, we already have our strength and competitiveness, but I believe that we need to continue to differentiate so that even as the peers try to catch up with us, we would be able to keep the distance between ourselves and the rest. And regarding this point, the representative from marketing side will deliver further details.

I think there are many factors that can continuously differentiate between high-quality, high-precision, low-consumption power, and design discrimination. Especially, as CF said, when we look at these trends, we can see that assets can be used for IPS technology, oxide technology, This is Jae Young Kwon of IT Marketing.

Now, when we look at the trends in the IT products, then we see that there is still much room for further differentiation. For example, high resolution or high pixels and low power design. So these are the areas where we can continue to differentiate. And also, as the CFO has explained, now the company already has competitiveness in IPS technology as well as oxide technology. And it is based on such technological competitiveness that we will continue to keep up with the trends and continue to lead so that we will be able to maintain our competitive advantage and continue to lead the IT market.

Before I tell you about the POPEC management plan, I'd like to add one more thing regarding LCD. And before I move on to the second question, I would like to say a few words about the LCD business.

Now, after the one of our peers announced that they would be withdrawing from the LCD business. There appears to be some misunderstanding in the market and industry that the company might also withdraw from the LCD business entirely.

We talked about the direction of the LCD structure, but in the end, strong PEPs with different competitiveness uh, uh, uh, uh, uh, uh, uh, uh, uh, uh, But as I have explained already, as I was explaining about the direction of the company's LCD structural innovation, what we intend to do with the LCD business innovation

is to strengthen the competitiveness of the already competitive fab and products. And so we already have the strong fabs and products. And what we are trying to do is make sure that they will become even more competitive. So in such a case, I would say that our portfolio of IT products are very much different from the competitor. So in terms of the product volume or the customer base or the product portfolio, we are quite differentiated from the peer and from the other players. So what we are planning to do is to innovate the LCD business structure so that the IT products will remain a key driver of revenue for the company, and we will continue to promote this business sector. So I do hope that there would be no misunderstanding about the company's LCD business.

Yes, I would like to talk about the operation of the plastic OLED PAP. As you explained earlier, I think we can't avoid the big trend of the smartphone's seasonality. But when we look at the balance between the flow of the market and the size of Kepa, if we try our best, if we can get enough trust from customers and provide stable products, I think that part will be the key to overcome our seasonality.

And now moving on to your question about the utilization of plastic OLED fab. Now, of course, it is true that there is seasonality in the smartphone, so there is probably no avoiding the trend of low demand in the first half and high demand in the second half. But then when we look at our capacity and also the market trend and combining that with our capacity balance, So if we can, so on top of this, if we can continue to have trust from the customers and have a stable supply, then I believe we will be able to overcome this seasonality.

As you know, PajuPEP is a factory specialized in smartphones. Next, Gumi Fab is preparing and producing a variety of products. So, Gumi Fab is preparing various things to be suitable for mass production. For example, we are also producing auto products in Gumi. Next, I think wearable products will also be produced in Gumi soon. And specifically about the operation plan for PajuFab and GumiFab,

Now, for Paju Fab, as you would know, it is specialized for smartphones, whereas for Kumi Fab, it produces a diversity of products. So we are already producing a diversity of products, and also we are making preparation for further diversity. So we are currently making preparation for small volume production of a variety of products in the Kumi Fab. So, for example, auto products are already being produced at the Kumi Fab, and also the wearable products will be produced in the Kumi Fab soon. And also for the future products that we are preparing, for example, foldable, they will also be produced out of Kumi. And aside from that, there can be many other attempts that can be made based on plastic OLED, and they would mostly be produced out of Kumi Fab as well.

Yes, we will take the next question.

The next question will be presented by Nicola Godoa from UBS. Please go ahead with your question.

Hi. Good afternoon. Thanks for taking my question. If you could first of all comment a little bit about automotive and OLED you just mentioned. You announced a couple of weeks ago a design win with Mercedes, and that comes after another one from Carrier this year. So if you take a five-year view, how much do you think automotive could become of total RGB OLED revenues for LG display? And how profitable are those automotive contracts compared to mobile? And then, secondly, if I may, a clarification on what you said earlier on profitability for RGB OLED and specifically plastic OLED for the Badrufab. Did you actually say that even at full utilization rates, you may actually not reach profitability later this year? Thank you.

There are two questions. The first is related to the auto segment. It's about the auto, OLED. A few weeks ago, you made a presentation about Mercedes and OLED design, and you also made a presentation about Cadillac at the beginning of this year. So, when you look at the next five years, how much do you think the auto segment will be in the small OLED segment? Also, what is the proportion of OLEDs in the auto field compared to smartphones? The second question is a confirmation question. While answering the question about plastic OLEDs, I will ask you to confirm whether I heard it correctly.

Now then, let me clarify first

So that is to your second question. What I mentioned earlier was that assuming full utilization, there is going to be meaningful or significant improvement in our profitability.

Next, you asked about the plastic OLED auto business. In the next five years, And coming back to your first question about the plastic OLED auto business,

And the question I took in was that for the next five years, how much growth do we foresee from the RGB OLED auto business? Now, if I may explain first about the status quo, out of all the orders that we receive for auto, about 20% is for plastic OLED business.

Uh, uh, uh, It depends on how fast the penetration of the plastic OLED can be done. I think the volume and projection will be a little different in five years. It's a very early stage right now, so we're continuing to review the possibilities of various transactions and auto adoption. It's a very flexible part, so we'll talk about this after we're done with the study. I'll do that so that I can tell you as much as possible.

And as for the next five-year projection, now we are looking at the market from various angles. And as far as I understand, we have about 25% global market share in the auto display market. And so then the question is, out of the auto display, how fast and how wide can we penetrate with the plastic OLED? That would largely determine the numbers for the next five years. But then this being so early in the current trend, we are still having a lot of discussions about various possibilities with the different customers. And because of this, the situation is quite fluid, and because of that, it is very difficult to give you any numbers at this point.

Next, you asked about the profitability of the auto PO business. The nature of the auto business is that we have to deliver for a long period of time, at least for more than five years, and we have the characteristic of a large number of deliveries. So, considering the nature of the auto water business, we are targeting the level of profitability that can cover various risks, so from the point of view of whether it is better or worse than other PO products,

And about the profitability of the auto plastic OLED, now the very nature of the auto business demands that the supply continues for a long period, for at least like five years. And this also is a small volume, multiple variety product. So in this case, what is important for us is not just the absolute profitability, but the question is whether we would have profitability that is enough to cover the risks that would come from such long-term supply. So it's not about the auto plastic profitability being higher or lower than compared to other plastic OLED products, but then it's about whether it is enough to overcome or the enough to manage the risks involved with such long-term supply. So that is our target, that kind of profitability.

The next question will be presented by Hyunsoo Kim from Hana Financial Investments. Please go ahead with your question.

Thank you for the question. I have a question about LCD TV and P-OLED. In the case of LCD TV, it is related to the scrap schedule. First of all, the orderly scrap is going on, but recently the demand for TV is recovering very quickly and the price of panels is rising. Also, I would appreciate it if you could tell me if there may be some adjustments to the scrap schedule on the TV side. In addition, I would appreciate it if you could tell me how much the increase in the price of the panel will continue from the current point to the current point. And now, regarding P-OLED, there was a press release on the third line of this six line through a recent press release. There was a press release on the possibility of additional investment. Do you have any plans for this? I have two questions, one about LCD TV, the other about plastic OLED.

Now for the LCD TV, this question is specifically about the scrap schedule. Now I'm sure you have the schedule for sequential scrap in the LCD TV, but then recently we see that there is a very fast recovery in demand for TV and also the panel price is on the rise. So I wonder whether you plan to adjust the schedule for the TV scrap and also looking at the panel price and the current rising trend How far do you believe that this will continue? To what level? And the second question is about the plastic OLED and about the E6 line because there have been media reports recently that the company has plans to make additional investment to the third line of the E6 line. So I wonder whether this is true. And also for the E6 line, now the domestic customer, so your domestic customer, will also be utilizing integrated touch panel in their next product. So what is the company's progress on the TOE technology?

First, I will answer the question related to LCD. I think I have explained enough about the IT field of LCD. From the point of view of LCD structure innovation, I thought a lot about where the most competitive PAP is. As a result, we think that the LCD PAP operated in Guangzhou is the most competitive among the eight-generation PAPs, even from a global point of view. So, the LCD PAP in Guangzhou will be operated as the main factory of LCD TVs in the future.

Regarding your first question about the LCD, now regarding the IT products for the LCD, I believe that I have fully explained earlier, so then more specifically about the TV. In terms of the, when we were thinking about the LCD structure innovation, we were thinking about what would be the most competitive FAB for us. And the answer is probably the Guangzhou LCD FAB. And also we believe that even globally, Among the Gen 8 FABs, this FAB is probably one of the most competitive. And because of this, the Gwangju LCD FAB is going to remain the main FAB for LCD TV for the company.

From that point of view, the consumer LCD TVs produced in Korea, as I mentioned in the last IR, the basic direction is to stop production in Korea. Given that, then, as for the production in Korea,

of the LCD TV for consumers. Now, as I have mentioned earlier in the earlier IR, the plan now is to stop the domestic production of the consumer LCD TVs. So that principle remains unchanged. Now, having said that, because of the COVID situation and because of the situation with some customers, we intend to be flexible for the shorter term. So if I may summarize then, the overall direction remains unchanged. But then for the shorter term, we are thinking about how to be more flexible.

And then the second question you asked, the addition of the E6 line, the third line investment possibility, and then the press release, you said something like this. The concept of the third line of E6 is to invest 15,000 more. I understand what you mean by that. So far, it has not been decided to expand 15,000 more. As for this part, from the company's point of view, there is nothing that can be done with the concept of an additional 15K investment. It's just that there's a part of the landing line. There's a part of the landing line that we already have the equipment for, but I'll tell you that we're investing in the concept of security in the sense of preventing various kephalos that can occur in the development process.

And then regarding your question about some media reports on the company's plan to invest in a third line, in the E6 line. So by third line, I take it that you mean additional 15K. So is there a plan for the company to invest in an additional 15K? So defining the question that way, then let me say that there is no such decision to invest in an additional 15K capacity. and no such investment is currently being made either. Now, having said that, now there is a deposition line, so we do have some deposition equipment. And what we are planning to do is to make improvements on the deposition line so that we will be able to prevent the capacity loss that can occur in the course of development.

Next, I'd like to talk about the third question, about the preparation of technology for TOE. And then pertaining to a question about the competitor at the of the company's readiness for the TOE technology.

Now, as for the technological preparation and the equipment for the TOE, we have already completed the preparation, and I will not be naming the customers, but we are already supplying TOE products to some customers.

Thank you for all the questions. As time is up, LG Display 2020 Thank you very much for your questions and your interest.

With that, we will now close Q2 2020 earnings conference call. Thank you once again for joining us today. Please do contact us at the IR team for any additional questions. Thank you.