LG Aims for Display Sales of USD 20 Billion in 2010

Seoul, Korea.- LG Electronics (LG), a major player in the global flat panel display market, today announced business strategies and goals for its display business at IFA International 2008 in Berlin, Germany. These objectives, intended to reinforce LG’s status as a global top tier display maker, include increasing total display sales by 30 percent to USD 20 billion and tripling productivity by 2010.

“Competition has intensified since the flat panel TV industry has fully matured,” said Simon Kang, President and CEO of LG Electronics Digital Display Company, during a press conference at IFA. “However, we are confident that focused, localized marketing activities emphasizing our products, which embody the perfect harmony of design and technology, will separate us from our competitors.”

LG will take a four-part approach to achieving its ambitious goal to increase overall display sales to USD 20 billion by 2010. This includes upholding its image as a premium brand, increasing returns on invested capital, maintaining product leadership and expanding its business portfolio.

LG has established itself as a premium brand by systematically focusing on brand marketing activities, for its products which balance stylish design and smart technology. The company plans to invest USD 500 million in marketing through 2010 and will take a segmented, regional approach.

Most of this marketing will focus on the six regions of North America, Central and South America, Europe, China, the Middle East and Africa as well as CIS. LG plans to reinforce partnerships with premium distributors and centralize brand marketing activities in developed markets such as North America and Europe.

LG will maximize its return on invested capital through outsourcing, innovative manufacturing technology, and an advanced supply chain management system. Because of this, LG plans to allocate its own talent and human resources into higher value-added areas, while using outsourcing strategies that will give it a competitive advantage on cost.

In addition, introducing a cell production system will allow LG to manufacture large volumes of a few products or small quantities of niche products, helping the company triple its productivity in two years. In contrast to assembly line manufacturing, in which a large number of people work on stages of an individual product, cell assembly allows one person to assemble a TV from start to finish. In order advance its global supply chain management, LG will control its supply network in real-time and improve network visibility from supply to distribution.

To ensure product leadership, LG is dedicated to creating products that offer differentiated value, based on customer insights. As part of this, the company will invest USD 1 billion on research and development by 2010. LG will further diversify its product line-up based on consumer preferences and reinforce its R&D network by leveraging partnerships with sister brands such as LG Display, and LG Innotek and LG Digital TV Lab.

Further, LG will reinforce its business to business segment, developing new business models that the concentrate on selling products for use in public places including hotels and airports, especially in North America and Europe. LG also sees broadband TV as one of its future growth engines. Along with partners, LG will offer a wide range of content direct to TVs via the internet, including 3D graphics, high resolution movies and more.

Despite the global economic downturn, LG demonstrated substantial growth in sales in the first half of 2008, meeting ambitious goals and objectives in its LCD and PDP businesses. LG’s LCD TVs recorded a 100 percent growth in sales volume compared to the first half of 2007. Additionally, LG’s PDP TVs saw 45 percent growth over the same period in 2007.