LG closes another business: after exiting the smartphone sector last year, the South Korean company also leaves the market for solar panels due to rising costs and the difficulties encountered along the entire supply chain. It weighs above all theunequal competition with Chinese competitors, so much so that sales have dropped dramatically over the past few years. In the last financial quarter, LG has highlighted this suffering, despite the Business Solutions Company – to which the production and sale of solar panels refer – was able, as a whole, to (more than) compensate for the losses with the excellent trend in the sale of PCs and monitors.
Starting next June 30th, LG will stop producing solar panels and modules. The consequences will also be seen from a business point of view, with hundreds of employees in South Korea and the United States who will hopefully be relocated to other departments of the company.
Moving out of the solar panel business, LG focuses on products and services that can have an even greater impact – Thomas Yoon, President and CEO of LG Electronics for North America.
LG NeON H, recently presented
LG entered the solar panel market in 2010, focusing on energy efficient products. Over time, however, the pressure exerted by Chinese competition and the simultaneous increase in costs along the entire production chain have reduced profit margins more and more. The market share that has fluctuated around for some time at 1% and the drop in sales (from 915 million dollars in 2019 to 665 million in 2020) have definitively convinced management and owners to make the decision to leave the market.
LG Business Solutions will reorganize his portfolio focusing on Information Technology and Information Display. The company then underlines how the exit from the market of solar panels and modules does not mean a disengagement from the energy issuefar from it: particular attention will be given to the Energy Storage System (ESS) and, in general, to advanced energy management solutions.
The cutting of dry branches seems to work in LG: just look at the financial results of the Group following the closure of the smartphone sector. In any case, the company has assured all its customers that the assistance of the products already sold – including the newcomers of the NeON series – will not fail, on the contrary: it will continue regularly over the next few years.