LG Display Co., Ltd.

Good morning and good evening. Thank you all for joining the conference call for the LG Display Earnings Results. This conference will start with a presentation followed by a Q&A session. If you have a question, please press star and 1 on your phone during the Q&A. Now we will begin the presentation on LG Display's fourth quarter of fiscal year 2025 earnings results.

Hello. I am Team Leader, Heo Seok of the LG Display IR team. Thank you to those who attended the 4th quarter performance announcement conference call in 2025. Today's conference call includes CEO Kim Sung-hyun, CEO Cho Seung-hyun, CEO Kim Kyu-dong, CEO Lee Ki-young, CEO Kim Jong-deok, CEO Ahn Yu-shin, CEO Baek Seung-ryong, Good afternoon.

This is Heo Seok, leader of the LG Display IR team. Thank you for joining our fourth quarter 2025 earnings conference call. Joining us today are CFO Kim Sung Hyun, Vice President Cho Seung Hyun in charge of business control and management, Vice President Kim Kyu Dong in charge of finance and risk management, Lee Ki Young in charge of business intelligence, Vice President Kim Jong-duk, in charge of large display planning and management. Ahn Yoo-shin, in charge of medium display planning and management. Baek Seung-yong, in charge of small display planning and management. And Son Ki-hwan, head of auto marketing.

The conference call will be held in the same way as the Gugyeomun conference call. The details of the results will be available on the website or on the website.

Today's conference call will be conducted in both Korean and English. For detailed performance-related materials, please refer to our disclosure or the investor relations section in the company website. Please refer to the disclaimer before we begin the presentation.

Please be informed that the financial figures presented in today's earnings release are consolidated figures prepared in accordance with international financial reporting standards.

These figures have not yet been audited by an external auditor and are provided for the convenience of our investors.

These figures have not yet been audited by an external auditor and are provided for the convenience of our investors.

As a result, revenue rose slightly QOQ,

to 7.2008 trillion won.

Operating profit declined QOQ to 168.5 billion won. It is owed to lower shipment of certain small and medium OLED models, QOQ, together with one-off costs related to strengthening the company's profit structure and future competitiveness.

앞서 지난 분기 실적 컨퍼런스 콜에서 언급되었던 인력구조 효율화를 위한 국내외 임직원 대상의 희망 퇴직 관련 비용은 foreign foreign foreign foreign

As noted in last quarter's earnings call for the purpose of raising the efficiency of manpower structure, costs associated with voluntary retirement program for domestic and overseas employees exceeded $90.1 billion. In addition, fourth quarter included incentive payments as rewards to employees for achieving the company's first annual turnaround in four years, and as motivation to further bolster the company's competitiveness. Calls for activities, such as reducing low-margin products and inventory rationalization, were also included in Q4 results, which were part of the initiative to adjust the company's business and product portfolio. It was intended to strengthen our profit structure and operational efficiency.

In addition to the cost-effectiveness factor that occurred in the last quarter,

operating performance in q4 excluding these one of cost expanded both qoq and yoy demonstrating continued improvement in our business fundamentals and profitability

There was net loss of 351.2 billion won down QOQ, primarily due to foreign currency translation loss stemming from the higher year-end exchange rate.

EBITDA in Q4 was 1.162 trillion won with an EBITDA margin of 16%. Next is shipment area and ASP trends.

EBITDA in Q4 was 1.162 trillion won with an EBITDA margin of 16%. In addition to the flow of strategic panel purchases that have been linked to this, the difference between customers and product strategies per panel company is showing a different look. In particular, the company's low-profit model of the medium LCD product group is continuously decreasing due to the operation of product portfolios centered on profitability.

What we are seeing recently is that panel shipments by product have diverged from traditional seasonality, reflecting instead the downstream conditions, customers' inventory levels, and strategic panel buying trends, as well as differences in customer and or product strategies among panel suppliers. Particularly for the company, as we maintain profitability-focused product portfolio,

Shipments of low-margin, mid-sized LCD models continue to shrink.

Specifically, in Q4, shipment area for TV and notebook PC panels grew quarter-on-quarter, while shipment for monitor and tablet panels declined. As a result, despite the strong seasonality, total shipment area rose modestly, QOQ, to 4.0 million square meters.

In terms of area-to-area evaluation, some models in the small OLED product group ASP per square meter was $1,297.

down 5% quarter-on-quarter, largely because shipment of certain small and mid-sized OLED models were concentrated in Q3. Although it fell QOQ, it is up 49% year-on-year, reflecting continued progress in upgrading the business structure toward OLED and supporting expectations that the high level will be maintained going forward.

다음으로 제품군별 매출 비중을 말씀드리겠습니다. Next is revenue share by product group. Overall revenue share remained largely unchanged from Q3. First, mobile and others accounted for 40% of revenue, up 1% is point QOQ, mainly due to shifts in the product mix.

IT revenue share remained almost unchanged at 36%, down 1 percentage point QOQ, reflecting the differing shipment across product categories as described earlier.

TV-용 및 모니터용 화이트 OLED 패널 출하가 증가하며, 전풍기 대비 1%포인트 소폭 상승하였습니다. 오토 부문의 매출 비중은 전풍기 대비 1%포인트 하락한

TV's share out of revenue rose slightly by 1 percentage point as shipments of white OLED panels for TV and monitor increased. Auto revenue share rose to 7%, down 1 percentage point QOQ.

In total sales, the proportion of OLED products This is the same as the previous quarter, 65%, which is a number that has risen by 5% compared to the previous year. In the past year, it recorded 61%, which rose by 6% from 55%. As such, the business structure and performance of OLED Center are steadily expanding, and future growth and profitability are also being further strengthened.

OLED products accounted for 65% of total revenue in Q4, unchanged QOQ and up 5 percentage points YOY. Year-to-date, OLED share rose to 61% from 55% last year, up 6 percentage points. The continued upgrade toward OLED-centric business structure is steadily broadening and strengthening our growth and profitability base.

Next is our financial position and key indicators.

Cash and cash equivalents at quarter end were 1.573 trillion won, largely unchanged, to QOQ. As we wind down non-strategic businesses such as LCD TV and improve operating efficiency, the level of required operating capital has remained lower than in the past.

The end-of-year stock assets were also reduced by 2.54 billion won last year, Inventory at quarter end declined YOY to 2.546 trillion won.

reflecting progress from our efficiency improvement efforts. Total debt decreased by $1.886 trillion from the end of 2024 to $12.664 trillion won, and net debt fell by $1.437 trillion won YOY to $11.0910 trillion won.

Debt-to-equity ratio improved to 243%, and net debt-to-equity ratio to 141%.

lower by 20 percentage points and 10 percentage points, respectively, QOQ, and lower by 64 percentage points and 14 percentage points, YOY, further strengthening our financial soundness.

다음은 1분기 가이던스입니다.

I will now move on to guidance for Q1.

1분기는 계절적 비수경향으로 전 제품군에서의 출하 면적 감소가 예상됩니다. On the other hand, in the case of each area, it will fall slightly compared to the previous quarter, but as a result of the high-strength business structure and effort by OLED Center, it is expected to fall slightly compared to the same quarter in the past.

Shipment area is expected to fall across all categories in Q1 due to seasonality. While ASP per square meter is also expected to fall slightly QOQ, It will be tempered compared to the same quarters in the past due to the strong and sustained upgrade to OLED-centric business structure.

The overall exit area will decrease by about 20% compared to the previous quarter, and the market price per area will drop by about 0.5%. In particular, the market price per area is expected to rise by $1,200 in the first quarter,

Total shipment area is projected to decrease by low 20% level from the previous quarter and ASP per square meter to decline by mid-single-digit percent. Notably, ASP per square meter is expected to remain above the $1,200 line even through the seasonality of Q1. up by more than 50% YOY.

I will now hand over to our CFO, Kim Sung Hyun.

Good afternoon and evening to everyone. I am Kim Sung Hyun, the CFO. Thank you very much for joining today's conference call.

If we look back at the results of last year, we can say that we achieved the biggest achievement of the year by improving the profit of over 1 trillion won based on the efforts and efforts of all employees. Despite the uncertainty of the competition environment and the volatility of the global market situation, we continued to expand the share of OLED sales and promoted business quality improvement at a high level,

Looking back to last year's performance, our most significant achievement was delivering a meaningful scale of turnaround after four years, improving profitability by more than 1 trillion won YOY thanks to the hard work and dedication of all our members. Despite elevated external uncertainty and volatility in global markets, we continued to expand OLED revenue share and persisted with intensive structural improvements. As a result, we reduced our loss by roughly 2 trillion won in 2024 versus 23 and further improved results by about 1 trillion won in 2025.

In terms of overall sales, the percentage of OLED products recorded 61% per year, the highest ever. The percentage of OLED sales, which was only 32% in the 20s, which started with a high-end structure and promotion, has been continuously expanded to 44% in 2022 and 55% in 2024, and in 2025, the large LCD business will end with the end of the Guangzhou LCD factory.

OLED's share out of revenue reached a record high of 61% for the year. It was only 32% when we began business structure upgrade in 2020 and rose to 44% in 2022, then again to 55% in 2024. We believe that we are moving much closer to the complete solidification of our OLED-centric business structure, having terminated the large LCD business with the sell-off of Guangzhou LCD plant in 2025.

I would like to talk about the specific background of the one-off factor that occurred in the fourth quarter. Regarding the cost of retirement, In October last year, there was a guide on the background and approximate size at the actual conference school, and there is no major difference compared to the existing guide for the actual cost of 900 billion won. In this regard, the company's overseas production strategy will be supplemented by the company's overseas production strategy Allow me to explain the one-off cost in Q4.

THERE WERE EXPLANATION AND GUIDANCE FOR COSTS RELATED TO VOLUNTEER RETIREMENT PROGRAM PROVIDED AT LAST YEAR'S OCTOBER EARNINGS CALL. AND THE ACTUAL COST INCURRED, ROUGHLY 90 BILLION WON, IS LARGELY IN LINE WITH THE GUIDANCE. THESE COSTS INCLUDE, BESIDES WORKFORCE RATIONALIZATION TO STRENGTHEN OUR BUSINESS FUNDAMENTALS, LOCAL WORKFORCE ADJUSTMENT COSTS THAT WERE INCURRED while trying to improve our overseas production strategies to proactively address changes in trade and tariff environment, as well as customers' production strategies. Financial impact from the volunteer retirement cost is unchanged from what we described at last quarter. The one-off cost will be offset from about 18 months after implementation and will contribute positively to future results.

Next, as I mentioned in the explanation of the 4th quarter performance, the success of the annual performance turnaround in 4 years was reflected in the last year's business performance. We expect to continue to increase our performance by focusing more on quality improvement as a technology-centered company and increasing our performance with a sustainable revenue structure.

In addition, as mentioned as part of the Q4 performance briefing, incentive payments tied to last year's business performance were also reflected. It is to recognize our members' role in achieving the first annual turnaround in four years and to motivate them further going forward. The incentive is intended to further support our ability to shift towards a technology-centric company By focusing more on improving our fundamentals, build a sustainable profit structure, and better achieve our future goals.

The last factor is the cost reflection for strengthening profitability and improving operational efficiency. Through this, the company will further strengthen future profitability, reduce low-income products, and continue management activities centered on operational efficiency,

Last item is the cost associated with strengthening profitability and improving operating efficiency. It will enable the company to boost future profitability and broader push to improve operational efficiency such as reducing low margin products or consolidating inventory and is expected to strengthen business performance overall.

foreign foreign foreign The company's business structure and revenue structure have been continuously strengthened due to expanded performance compared to the previous year.

Total non-recurring cost impact in Q4 was in the high 300 billion won range, which is the result of the company's activities and work to strengthen our profit structure and future competitiveness. Excluding these items, Q4 operating profit was roughly mid-500 billion won, exceeding market expectations. It is an improvement, QOQ and YOY, underscoring continued improvement in our business fundamentals and profit structure.

The uncertainty of the global economy and the change in the global market will continue this year. The real demand and demand, the change in the normal environment, Looking ahead, we expect external uncertainty and product level volatility in the downstream market to persist this year.

While numerous factors persist in our business environment, like macroeconomic driven real demand, changes in the trade environment, and supply chain stability, we will remain focused on stabilizing our business performance by growing our OLED business and driving cost innovation and operational efficiency activities.

Next, I would like to briefly talk about business plans and strategies. In the case of commercial mobile businesses, we are planning to expand the panel and increase business performance and stability based on differentiated technology leadership and strengthened partnership with customers. At the same time, we will carry out institutional activities such as research, development, and new technology investment to prepare for the future.

Next, let me briefly remark on our plan and strategy by business. For small mobile, we will expand panel shipment, leveraging differentiated technological leadership and strengthened customer partnerships to enhance business performance and stability. At the same time, we will systematically execute R&D and new technology investments to grow our future opportunities.

In the case of the OLED segment among medium-sized businesses, we will respond based on the accumulated technology leadership and mass production experience for the current high-end market demand for each product group. At the same time, we will actively respond to the changing environment, including market demand and customer requests, through the efficient utilization of the infrastructure that the company currently owns. We will also respond to the changes in the market demand

We will respond to high-end market demand across product segments by leveraging our technological leadership and mass production experience. We will also respond proactively to shifting market demand and customer requests. by more efficiently utilizing existing infrastructure. As to the demand for OLED conversion by product, which is expected to grow, we will carefully assess market size and conversion pace to enhance competitiveness in ways that will differentiate us.

IT LCD 부문은 동기별 출하 동향과 실적에서도 확인이 되듯, We continue to reduce low-income products and focus on B2B products and differentiated high-end HD areas. Through this, there is a significant growth in profitability every year, and we are focusing on improving the performance of our current activities so that we can show a turnaround this year.

For IT LCD, as reflected in recent quarterly shipment trend and results, we are keeping our focus on B2B and differentiated high-end LCD while continuing to reduce low-margin products. It is leading to meaningful profitability improvement every year. We will intensify execution of what is already underway to achieve possibility for a turnaround this year.

The large-scale business is well-known in the market for its distinctive competitiveness of white OLEDs, and we will continue to dominate the premium market through a variety of TV and game OLED panel lineups based on close cooperation with strategic customers. Based on this, we will expand our business performance and make even more efforts to improve the price.

For large panels, we will solidify our leadership in the premium market through our differentiated and diversified TV and gaming OLED panel lineup. On the back of growing recognition of white OLED's competitiveness and close collaboration with strategic customers, We will expand business results and pursue rigorous cost improvement to maintain stable operations.

We will expand business results and pursue rigorous cost improvement to maintain stable operations. We will expand business results and pursue rigorous cost improvement to maintain stable operations. We will expand business results and pursue rigorous cost improvement to maintain stable operations.

And for automotive, we will sustain our competitive advantage and create customer value based on our market leadership and differentiated products and technology portfolio.

As a result of the activity of investment efficiency, CapEx has finished at a medium level of 1.1 trillion won in 25 years. In 26 years, we are expecting CapEx execution of 2.1 trillion won, which is expected to be increased by the previous year, considering investment implementation for strengthening OLED technology competitiveness and investment activities for strengthening OLED business and preparing for the future. We will communicate with the market without hesitation about the newly decided investment.

Finally, on investment, we maintain a CAPEX policy focused on investments in our future readiness and structural upgrade. After investment optimization activities, CAPEX in 2025 was completed at mid $1 trillion. In 2026, CAPEX is expected at $2 trillion level up YOY. This includes execution of the plan investment to enhance OLED technological competitiveness and investment to strengthen OLED business and future readiness. For any new investment decision, we will communicate with the market without delay.

This completes our report on Q4 business performance and review of 2025.

Thank you very much.

This completes our presentation of business highlights for Q4 2025.

We will now take your questions.

Operator, please commence the Q&A session. Now, Q&A session will begin.

Please press star 1, that is star and 1, if you have any questions. Questions will be taken according to the order you have pressed the number star 1. For cancellation, please press star 2, that is star and 2 on your phone. In order to allow as many Q&A chances as possible within the restricted time, we would appreciate only two questions per each participant.

The first question will be provided by Kango Park from Daishin Securities.

Please go ahead with your question. Congratulations on the 4th year of artistic turnaround. I would like to ask two questions. The first is, in China in 2025, the OLED ratio increased a lot as the business trial was held and the LCD law was published. As a result, the business quality has been continuously strengthened and the demand for alcohol has been greatly improved. As a result, sales growth is expected due to the increase in the proportion of OLADs this year. Please comment on how you are predicting the prospects and business performance of each business this year. In particular, in the short term, the core of our LGD's negative recognition change is to completely cut off the low-income income in the first half of the year. I would like to ask you to comment on what will happen in the second half of this year compared to the past. Secondly, we know that we have made strong efforts to improve the efficiency of operation, including asset innovation, reduced investment in facilities, and high-quality stock. From that point of view, in the next 26 years or three to four years in the future, Thank you very much for taking my question.

And first of all, congratulations on achieving a turnaround for the first time in four years. Now, I would like to ask two questions broadly about the company overall. The first is, in 2025, the company sold off its LCD company in China and continued with the business upgrade, and it has also increased the share of OLED out of the total revenue, which has then improved the business performance as well as the profitability. So looking ahead to this year, then it appears that the share of OLED appears to be set to keep growing, which is likely, hopefully, to keep driving up the revenue. So then my question is, what is the company's outlook for each business, and also what is the expected business performance for the year? And also for the short term, I believe what the company needs in order to quell the negative perception about LG display is to sever the trend of entering into loss in the first half of the year. So can we expect a better trend in the first half of this year? And the second question is, The company for the past few years has been focused on improving financial soundness, for example, improving the cost efficiency and also lowering the facilities and lowering the inventory level and also improving the overall operational efficiency. Now then again, looking ahead to 2026 and also from a more mid- to long-term perspective, what is going to be the company's new strategic priorities or strategic tasks down the road? And especially for the CFO personally, what would be your priorities or what would be the important parts of your action plan?

First of all, the questions are very detailed and I think you are presenting the answers together. I will answer all the questions at once through my own interpretation.

Now, thank you very much for the question, which was quite specific and also appeared to have the answers embedded in them already.

Now, I would just like to provide my response at once based on my own interpretation of the questions.

Now, of course, so far there have been work to upgrade our business structure and also improve our operational efficiency. And the result or the performance out of that is, I believe, meeting up to our commitment to the market. Perhaps not 100% satisfactorily, but we have done the job.

But the process that has been going on for the past few years

But that does not mean that we can put an end to the process or the efforts that we have carried on for the past few years. Rather, they need to continue with new tasks in new phases.

Now for the mid to long term, what is important and

fundamental to the company is that, first of all, we need to keep growing, and second, we need to be steadfastly profitable every quarter.

Now, that would be my short answer to questions number one and two.

But then now in order to enable the points that I have just made, and there are some points that we also need to reach and allow me to explain a bit more.

Now today, an important theme for the company is to turn into a technology-centric company.

But then looking around to our external environment, then again in 2026, as you would all know, the environment is still full of uncertainties and also unpredictable elements. So then what should be the end goal for the company is, what I envision is that we need to become a normalized and competitive company. And this is because as we went through some tough times in the past few years, I see that the company has become perhaps a bit not typical and also perhaps that has eroded our competitiveness somewhat.

As you would know, there were losses to our capital, which made it

impossible for us to pay out dividends. And we were seeing large losses up until two years ago. Our financial position was quite bad, so much so that we had to turn to our shareholders to go into a paid-in capital increase.

And, well, there was a profit last year, but not all of it. Now looking at last year's performance, yes, we were profitable, but not in all businesses.

And what we need to do now is complete a business structure where we will be profitable in each and every one of our businesses. and so that we can also revive trust from the market.

So this means that we also need to reestablish our operations inside the company and across the company.

And there is no other choice but for us to continue with our business structure upgrade and operational efficiency improvement.

But the things that have changed are related to survival in the last period. Now is the time to recover competitiveness.

But although the work and the efforts have to continue, I would say that the purpose has slightly become different. Whereas in the past, it was more for survival, now it is more about improving our competitiveness.

We need to strengthen our technology competitiveness, strengthen our raw materials competitiveness, strengthen our product competitiveness, and strengthen our efficient operating structure.

competitiveness in our technology, competitiveness in our cost, competitiveness in our products, and also competitiveness in our efficient operation. So once we hit all these targets, then I believe we can once again become the market leader.

I think I've told you so many things.

So once we finish that process, then we will once again become a normalized company, win back market trust, and also win back the love from our shareholders. So I have been a little bit long-winded, but I would say that this is a homework that I have assigned upon myself.

The next question will be presented by Jung Hyun Yoon from UBS Securities.

Please go ahead with your question.

Yes, thank you for the opportunity to ask a question. I will ask two questions. The first is a question related to the mobile OLED business. Thank you for telling us how you are looking at the number of smartphone panel releases and the goal of this year's release. In particular, we would appreciate it if you could tell us what kind of opportunity factors you can expect this year, considering the period of product release changes and the direction of competition technology preparation of the major customers. The second is a question related to the previous year. Following the last year's customs, this year, the direction of the memory semiconductor industry Thank you.

My questions are also twofold. Now, first is about the mobile OLED. Now the number for the smartphone panel shipment for last year and also the target for this year. So could you share the information regarding these numbers? And also depending, so there were some changes in the product launch cycle by the customers and also looking at the technological preparedness by competitors. What are some of the opportunity factors that the company can expect? And another question, the following question is with regards to the company overall. So following tariffs last year, this year it appears as if the memory semiconductors trends are going to be the major factor that could affect the business performance of each business segment. So what is the company's perspective and intended response to this trend?

I'm Baek Soon-hee, CEO of Soyeong Geekkal. When we look back at the 25-year success of the smartphone business, in the first half of the year, the number of panels was significantly increased compared to the previous year, and there was a success that could reduce the seasonal change in the upper and lower half of the year. In the second half of the year, there was a difference in the number of mistakes per production model, but based on a multi-changeable product portfolio, we were able to achieve the goal of reaching 70 million panels in the middle of the year.

This is Baek Seung Hyun in charge of a smart size panel. Now looking back to smartphone business performance in 2025, the first half saw meaningful growth in panel shipment, largely reducing the seasonal variation between the first and second half. In the second half, while the actual demand varied by model, the diversified product portfolio enabled our annual panel shipment target of around mid 70 million units as planned.

And typically, panel shipments jump from the third quarter to the fourth quarter.

But last year stood out in that panel shipments were relatively concentrated in the third quarter.

Our smartphone business is generating stable results based on enhanced capabilities across our technology, production, and operations.

This year, we aim to further close the gap between the first and second half while outpacing last year's growth in panel shipment.

It is not appropriate for the company to directly mention the content of the client. However, it is certain that the company's smartphone development and development capabilities are clearly proven and recognized, and we have gathered the know-how to fully respond to various technical needs. By effectively utilizing the current production infrastructure,

Now, please understand that I am not in the position to comment on details about our customers, but what is certain is that our smartphone panel development and production capabilities are proven and recognized, and we have accumulated sufficient know-how to fully address diverse technical needs. And we believe that by efficiently utilizing our existing production infrastructure, we can address swiftly and flexibly both the increasing demand and new technology readiness, and grow our achievements.

I'm Ki-young Lee, a B.I. I'd like to briefly talk about the impact of memory on semiconductor industry. There are two factors that affect the display industry due to the price increase in memory. First, there may be a decrease in demand due to the impact of the set price. Second, it is expected that there will be a panel price or pressure on the client due to the increase in set parts cost.

Now I would like to respond to the question about the impact from the memory semiconductors. Largely there are two types of impact. First is with the increase in the memory price, then there would also be pressure on the display price, meaning that it could also go up. And then this could also increase the, and for the IT, it could also increase the set price, which could dampen demand. And also, the component price could also go up, meaning that there could also be pressure from the customers to lower the panel price.

In the current situation, it is limited to the part that has a short-term impact on the bids, but the volatility is very high in the future, so the company is closely monitoring demand fluctuations and related trends,

Having said that, the impact on the company currently remains limited, but the volatility is quite high, so we are carefully monitoring any changes in the demand as well as the trend, and we'll also try to address any impact that might arise. Thank you.

The following question will be presented by Won Seok Jeong from M Securities.

Please go ahead with your question.

Thank you for your question. I'd like to ask you two questions. As you just said, the price of memory semiconductors is rising recently, and the part that we are concerned about is the IT set, but I think the future of the market is more conservative. So, I'm curious about the future of the IT business strategy and whether it will be able to compete this year. Secondly, competitors' IT OLED investments and mass-produced operations are in full swing, but we are still in a situation where there is no such special movement. In that regard, I would like to ask if there is any disadvantage in allocating with customers. In the future, I would like to ask you to talk about the ITPC OLED strategy. Thank you.

Thank you for taking my questions. They are also twofold. Now, first, as was mentioned earlier, the rise in the memory semiconductor price could also bring some questions about the company's profitability. And so my question regarding the company's profitability is that how about the IT asset? Now, it appears that the outlook for the downstream market for the IT set demand appears to be conservative. So what is the company's outlook for the IT business? And also, what would be the possibility of seeing a turnaround? And a related second question is, now the competition appears to be investing or going into mass production with the 8.6 Gen plans, but the company at this time appears to have no such plans. then wouldn't that place the company at a disadvantage when it comes to a customer's allocation? And also, what is the outlook for the IT, PC, OLED for this year?

I'm Ahn Joo-shin, and I'm in charge of medium-sized planning. The company's medium-sized business has been focusing on customer structure for more than a year with a global high-end customer center, and is actively focusing on increasing low-income products.

For this year, the company's mid-sized business focused on upgrading our customer structure around global high-end clients throughout 2025, while actively reducing low-margin products. At the same time, we sustained rigorous cost-innovation activities, generating meaningful improvement in profitability YOY. We anticipate this trend to continue into 2026.

It is difficult to be sure of a complete recovery of the industry in 2026 due to the rise in the share price at the center of the semiconductor industry, Now given the rising component prices driven by semiconductors, supply chain disruptions,

and lingering uncertainties in the broader external environment, full recovery in the market remains uncertain even in 2026. But we will strive to achieve differentiated results in profitability and future-proofing. We will stick to our two-track strategy with LCD focusing on profitability with high-end LCD and with OLED responding to new demand and preparing for new market with tandem OLED-based differentiated products. We are closely monitoring the potential for OLED market expansion in IT.

We are closely monitoring the potential for OLED market expansion in IT.

We are closely monitoring the OLED market expansion in IT, but there is still insufficient visibility into demand to justify an 8.6 Gen investment decision, and external uncertainties remain high. that could also affect demand. So, for now, the company intends to monitor market conditions before making investment decisions.

The tablet OLED, which has become popular in the market, is based on Tandem OLED's discriminatory competitiveness in the 6th-generation OLED PAP, and has reached a leading position. Monitor OLED is based on the 8th-generation OLED PAP, high-end suyo zunga chusae nungjeongjoguro daewoonghago isseumnida. Notebook OLED gyeonghunun OLED sijang gyumohwa LCD-eeseo OLED-ro jeonhan daeneun suyo-e seokdo-deungeul yeonmili geomteohago isseumnida. Gijon infra-reul chaedaerang hwaryeonghago, gyeongjeng sanghwange-seodo won-ga-uwi-reul hal su-in-eun bang-sik-roo, mi-rae sijang-ae dae-bi-han gi-sul-gwa-yang-san-dae-un-yeok-eul ga-chu-hwa-na-ga-ge-ssu-mida.

In the tablet OLED market that continues to open up, we have solidified our leading position based on the differentiated competitiveness of tandem OLED technology at our sixth gen OLED fab. Monitor OLED is actively responding to the growing demand for high-end applications like gaming by leveraging our eighth gen OLED fab. For notebook PC OLED, we are monitoring the OLED market size and the pace of demand, shifting from LCD to OLED, maximizing existing infrastructure while developing future-ready technologies and mass production capabilities to retain a cost advantage even in competitive situations.

Yes, we will take one more question in relation to time.

Thank you. We will take one last question.

The last question will be presented by Sung Kim from Kiwoom Securities.

Please go ahead with your question. The large OLED business has been greatly improved since the second half of last year due to the reduction in the cost-benefit ratio. This year, I would like to ask if it is possible to improve the profitability of the TV and monitor OLED based on the 30,000-page cost-benefit ratio of the Guangzhou factory based on the increase in the quantity of the TV and monitor OLED. In addition, it is a situation where the product discrimination and profitability of TV set-up companies continue. I wonder what our large business medium-term strategy is like. My question is with regards to the large OLED.

Now, thanks to the cost improvement as well as the lower depreciation amortization cost, it appears as if the profitability has been improving since the second half of the year. So then what is going to be the outlook for the TV and monitor OLED this year? And so based on the higher demand for the TV and monitor OLED, as well as the lower depreciation and appreciation, depreciation and amortization, Does the company expect the profitability to continue to improve this year? And then also the next question is, now for the TV set companies, they are continuing to see sluggish differentiation and also worsening profitability. So there may also be some pressure to lower the price. But then what would be the company's response and also what would be the company's strategy down the road to continue to secure profitability in the large panel business?

I'm Kim Jong-deuk, the head of the large panel business management. The large panel business was established in the 25th year of the pandemic, In the past 25 years, we have grown by 8% compared to the previous year by reaching the mid-level of 6,000,000 units. In addition to the positive growth, we were able to do business while maintaining the discriminatory value of TV, monitor, OLED, and panel mode compared to LCD.

This is Kim Jong-Duk in charge of large display planning and management. Now, our large panel business, despite the external uncertainties and market volatility, achieved the intended panel shipment of approximately mid-6 million level in 2025, growing nearly 8% YOY. Now, the white OLED for both TVs and monitors is recognized by the market and customers for their differentiated value compared to LCD, and that is why I believe that we were able to maintain such business.

In the last 26 years, I believe that the uncertainty of the trade environment will continue to be maintained, and growth is also limited. However, the high-end market that OLED is targeting is maintaining a 10% scale of the overall market. So, in the high-end market where we are playing, In 2016, based on partnerships with global strategic customers, we continued to strengthen the line-up of OLED TVs and monitor-type OLED products. Based on this, in 2016, we aim to achieve 10% growth compared to the last 25 years, and we aim to operate at an early level of 7 million units.

Now coming into this year, we see that the uncertainty remains and also the market growth potential still remains a bit limited. But the high-end market that we are targeting with OLED maintains a 10% share of the overall market. So then in 2026, based on this projection, we plan to continue strengthening our W-OLED, the white OLED lineup for TV and monitors based on partnerships with global strategic partners. And on the back of such a partnership, the target for panel shipment in 2026 is set at just over 7 million to grow by around 10% YOY.

In the medium term, OLED TV will continue to maintain market leadership There's a total. So you can just get it as a boy. Can you all read the morning? I couldn't get in. You know, I'm going to be more, uh, uh, uh, uh, uh, uh, uh, uh, uh, uh.

And for the mid to long term, OLED TV is expected to maintain unwavering leadership in the market while expanding our performance. And especially for OLED monitors, it is also expected to see continued steep growth compared to other businesses. So we will continue to effectively respond to market trends and also reach an optimal production share between TVs and monitors to continue to expand our business performance.

So in this year's 26-year period, there are some positive aspects of sports events, but there are also side effects, such as parts, semiconductors, and water supply, as I mentioned earlier. So for these aspects, the party is primarily focusing on the market growth expectations uh... And again, for the short term, this year, there is some positivity expected from some sporting events.

But at the same time, some side effects are also expected especially coming from the supply-demand situation of components, especially semiconductors. So for the company, as we look ahead to continued market growth, our priority lies in securing stability in our production as well as supply. Now, for our large panel business, we expect the competition to continue to intensify. and it is incumbent upon us to continue to strengthen our technology and also differentiate our products so that we can keep expanding our business performance. So to that end, we will continue to work closely with our customers in close partnership to make sure that we can bring about win-win to all the companies involved with improved profitability. So we will continue to our strategy to that end with our customers.

Thank you very much and that concludes LG Display's Q4 2025 earnings conference call.

We thank everyone for joining us today. Should you have any additional questions, please contact the IR team. Thank you.