Long-term Supply Contract with Apple Might Hurt LG, says Kium Securities

Korea based Kium Securities said on Jan 12 that the long-term supply contract between LG Display and Apple might not be beneficial for LGD. Analysts Sungin Kim and Byungki Kim explained that "LGD contracted 5 year supply contract with Apple and receive pre-payment of US$500 million within this month. Considering current market condition, this contract is considered very unique situation, and Apple will purchase general Notebook PC LCD Panel from LGD."

They analyzed the situation that "[we] cannot confirm the details of the contract, but expect that the contract is non-beneficial for LGD based on price and sections of the contract. Later when market turns to short supply situation, this long-term supply will possibly hurt LGD in its profitability."