LG Display Co Ltd (LPL) 2023 Q3 法說會逐字稿

[Interpreted]

[解讀]

Good morning and good evening. First of all, thank you all for joining this conference call. And now we will begin the conference of the fiscal year 2023 third quarter earnings results by LG Display. This conference will start with a presentation followed by a divisional Q&A session. (Operator Instructions).

早安，晚上好。首先，感謝大家參加本次電話會議。現在我們將開始 LG Display 2023 財年第三季財報發表會。本次會議將以演講開始，然後是部門問答環節。 （操作員說明）。

Now we shall commence the presentation on the fiscal year 2023 Third Quarter Earnings Results by LG Display.

現在我們開始介紹 LG Display 2023 財年第三季獲利結果。

This is Brian Heo in charge of LG Display's IR. On behalf of the company, let me thank all the participants at this conference call. Today, I'm joined by the CFO, Sung-Hyun Kim; Hee-Yeon Kim, CSO; Seung Min Lim, Senior Vice President of Corporate Planning; Keuk Sang Kwon, Vice President of Auto Marketing; [Ki-Yong Lee], in charge of Business Intelligence; (inaudible) In Charge of Large Display Strategic Marketing; and Myoung-Kyu Kim, In Charge of Medium, Small Display Strategy.

我是 LG Display IR 負責人 Brian Heo。讓我代表公司感謝本次電話會議的所有參與者。今天，財務長 Sung-Hyun Kim 也加入了我的行列。 Hee-Yeon Kim，首席策略長； Seung Min Lim，企業規劃資深副總裁； Keuk Sang Kwon，汽車行銷副總裁； [Ki-Yong Lee]，負責商業智慧； （聽不清楚）負責大螢幕策略行銷；和Myoung-Kyu Kim，負責中小型顯示器策略。

The conference call will be conducted in both Korean and English. Please refer to the provisional earnings release today or the IR Events section in the company's website for more details on the financial results of Q3 2023.

電話會議將以韓語和英語進行。請參閱今天發布的臨時收益或公司網站的投資者關係活動部分，以了解有關 2023 年第三季財務業績的更多詳細資訊。

Before we begin the presentation, please take a moment to read the disclaimer. Please note that today's results are based on consolidated IFRS standards prepared for your benefit and have not yet been audited by an outside auditor.

在我們開始演示之前，請花點時間閱讀免責聲明。請注意，今天的結果是基於為您的利益而製定的綜合國際財務報告準則標準，尚未經過外部審計師的審計。

I will start with Q3 business results. Revenue was almost flat Q-o-Q in the midst of intense inventory correction continuing in the downstream industries, as demand is slow to recover due to macroeconomic uncertainties with the impact being felt differently by product category like TV, IT and mobile. Revenue in Q3 was KRW 4.785 trillion, up 1% Q-o-Q.

我將從第三季的業務成果開始。由於宏觀經濟不確定性導致需求恢復緩慢，且電視、IT 和行動等產品類別所受到的影響不同，下游產業庫存持續大幅調整，收入環比幾乎持平。第三季營收為 4.785 兆韓元，季增 1%。

There was operating loss of KRW 662 billion, narrowing Q-o-Q and Y-o-Y, maintaining the improvement trend. As the company continues with business structure upgrade, it has also remained on the path of cost innovation and operational efficiency.

經營虧損為 6,620 億韓元，環比和年比均有所收窄，維持改善趨勢。公司在業務結構不斷升級的同時，也始終走在成本創新和營運效率提升的道路上。

Next, on area shipment and ASP per square meter. Q3 area shipment was up 1% Q-o-Q to 4.77 million square meters. ASP per square meter was $804, up $1 Q-o-Q.

接下來是出貨面積和每平方公尺的平均售價。第三季出貨面積較上季成長 1%，達到 477 萬平方公尺。每平方公尺平均售價為 804 美元，季增 1 美元。

In terms of revenue breakdown by each product segment, TV panels revenue mix was 23%, almost flat Q-o-Q. IT accounted for 40%, down 2 percentage points Q-o-Q, due to delayed recovery in B2B demand. Mobile and others took up 28%, up by 5 percentage points following the seasonal increase in mobile panel shipments. Auto business revenue mix was at 9%, down by 2 percentage points Q-o-Q as a result of some shipment adjustment. OLED revenue mix remained unchanged at 42%.

從各產品領域的營收細分來看，電視面板營收佔比為 23%，季減幾乎持平。 IT 佔 40%，季減 2 個百分點，原因是 B2B 需求復甦延遲。移動及其他佔28%，隨著移動面板出貨量的季節性增長，增長了5個百分點。汽車業務收入佔 9%，由於出貨量調整，季減 2 個百分點。 OLED 收入結構維持在 42% 不變。

Next is on the financial position and key metrics. Company's cash and cash equivalent was KRW 4.087 trillion. Inventory value was KRW 3.349 trillion, up by KRW 667 billion Q-o-Q to prepare for seasonal demand. Key financial ratios were up Q-o-Q, resulting from activities to strengthen liquidity, as well as net loss in the quarter. Debt-to-equity ratio was 322% and net debt-to-equity ratio, 151%.

接下來是財務狀況和關鍵指標。公司現金及現金等價物為4.087兆韓元。庫存價值為 3.349 兆韓元，季增 6,670 億韓元，為季節性需求做好準備。由於加強流動性的活動以及本季的淨虧損，主要財務比率較上季上升。負債股本比率為322%，淨負債股本比率為151%。

Cash flow at quarter end was KRW 4.087 trillion, up by KRW 235 billion from the KRW 3.853 trillion in the beginning from activities to strengthen liquidity.

季末現金流量為 4.087 兆韓元，比年初的 3.853 兆韓元增加了 2,350 億韓元，這是由於加強流動性的活動而進行的。

Next, on Q4 guidance. With increase in TV panel shipment to respond to year-end demand as well as expansion in the previously delayed IT panel shipment, shipment area in Q4 is expected to grow by [19%] Q-o-Q. Shipment of panels for smartphones with high ASP per square meter is expected to grow, likely to drive up ASP per square meter by mid-20% level Q-o-Q. Thank you.

接下來，關於第四季的指導。隨著電視面板出貨量增加以應對年底需求，以及先前推遲的IT面板出貨量擴大，預計第四季出貨面積將季增[19%]。每平方公尺平均售價較高的智慧型手機面板出貨量預計將成長，可能會推動每平方公尺平均售價較上季上漲 20% 左右。謝謝。

Next, CFO, Sung-Hyun Kim will walk us through the key highlights.

接下來，財務長 Sung-Hyun Kim 將向我們介紹主要亮點。

[Interpreted]

[解讀]

Good afternoon. This is CFO, Sung-Hyun Kim. The company was able to narrow the loss in Q3 again following Q2. Despite the challenging market environment, where downstream demand remains sluggish, by focusing on upgrading the business structure and innovating costs. In Q4, panel inventory adjustment will ease in the downstream industries and shipment of mid- and large-sized products and panels for new mobile products will grow to respond to the year-end seasonality. Profitability improvement continues. As the company keeps up its cost innovation and operational efficiency activities and turnaround is expected in Q4.

午安.我是財務長金成賢 (Sung-Hyun Kim)。繼第二季之後，該公司第三季的虧損再次收窄。儘管市場環境充滿挑戰，下游需求依然低迷，但專注於業務結構升級和成本創新。第四季度，下游產業面板庫存調整將有所緩解，中大尺寸產品以及新移動產品面板的出貨量將成長，以應對年底的季節性因素。盈利能力持續改善。隨著公司持續進行成本創新和營運效率活動，預計第四季將實現轉虧為盈。

The company will keep strengthening key businesses to respond to market demand and changes in the business environment and improve its profit structure by persisting with the enterprise-wide cost innovation.

公司將持續強化重點業務，因應市場需求及經營環境變化，堅持全企業成本創新，改善利潤結構。

Allow me to explain more about the OLED business strategy, which I understand to be of high interest in the market. In large OLED, we will broaden our position in the premium TV market and improve profitability by boosting customer portfolios centered on ultra large products and by innovating costs. For example, cutting material costs in key components.

請容許我更多地解釋一下 OLED 業務策略，據我所知，該策略在市場上很受關注。在大型OLED領域，我們將透過擴大以超大型產品為中心的客戶組合和創新成本來擴大我們在高階電視市場的地位並提高獲利能力。例如，削減關鍵部件的材料成本。

In small and medium OLED, we are driving shipments of mobile products by fully utilizing the new ramped up capacity. We are also preparing for volume production and supply of IT OLED in 2024, equipped with the technology marked by higher durability and performance like long life and high luminance. Over the mid to long term, the pace of OLED penetration is likely to differ by IT product, like monitor, notebook PC and tablets, as well as by consumer acceptance. And it is important to efficiently utilize the existing infrastructure and respond wisely to varying customer needs and market opportunities.

在中小型OLED領域，我們充分利用新增加的產能來推動行動產品的出貨量。我們也準備在2024年量產和供應IT OLED，配備具有更高耐用性和長壽命、高亮度等性能的技術。從中長期來看，OLED 的滲透速度可能會因顯示器、筆記型電腦和平板電腦等 IT 產品以及消費者接受程度的不同而有所不同。有效利用現有基礎設施並明智地回應不同的客戶需求和市場機會非常重要。

In automotive business, the company will keep solidifying its world #1 position by expanding orders won and revenue based on our unique technology competitiveness that encompasses Tandem OLED to high-end LCD, as well as rigorous quality control and stable supply capability.

在汽車業務方面，公司將憑藉從Tandem OLED到高端LCD的獨特技術競爭力，以及嚴格的品質控制和穩定的供應能力，擴大訂單和收入，繼續鞏固其全球第一的地位。

With little visibility into the future trajectory of real demand, the company plans to push ahead with intense restructuring of the revenue structure, so as to achieve more meaningful performance next year. Thank you very much for your attention.

在未來實際需求軌跡尚不清楚的情況下，該公司計劃大力推動收入結構重組，以期在明年取得更有意義的業績。非常感謝您的關注。

That brings us to the end of earnings presentation for Q3 2023. We will now take questions. Operator, please commence with the Q&A session.

2023 年第三季的收益報告到此結束。我們現在將回答問題。接線生，請開始問答環節。

(Operator Instructions) The first question will be presented by Eun Kim from Meritz Securities.

（操作員說明）第一個問題將由 Meritz 證券公司的 Eun Kim 提出。

[Interpreted]

[解讀]

Thank you. I have a 2-part question. I would like to ask my first question, then follow up with the second after the response. Now the first question is about the issues of delay in the second half of the smartphone panel shipments. So I wonder what have been the changes in the smartphone panel shipment in the second half for the company compared to the plan?

謝謝。我有一個由兩個部分組成的問題。我想問第一個問題，然後在答覆後再跟進第二個問題。現在第一個問題是關於下半年智慧型手機面板出貨延遲的問題。那我想知道公司下半年智慧型手機面板出貨量與方案相比有何變化？

[Interpreted]

[解讀]

Now this is the CFO responding to your first question. And of course, I do realize that this kind of question is important and perhaps necessary, but then I also would have to ask for your understanding that I must give you a [short] response, meaning that we are actually not at liberty to discuss issues that are related to certain customers. And this also is, I would say, related to the limitations of the nature of the industry itself.

現在這是財務長回答你的第一個問題。當然，我確實意識到這種問題很重要，也許是必要的，但我也必須請求您的理解，我必須給您一個[簡短]答复，這意味著我們實際上無權討論與某些客戶相關的問題。我想說，這也與產業本身性質的限制有關。

Now having said that, yes, it is true that as the market is already aware, there have been some disruptions in our production in, let's say, in a form that is different from the past, but then we were able to overcome the issues. And then now going into the fourth quarter, you would know that there have been improvement or a ramp-up in our production capacity. So we are going -- we plan to fully utilize the new ramp-up capacity, so that we will be able to make up for the delay as much as possible.

話雖如此，是的，正如市場已經意識到的那樣，我們的生產確實出現了一些中斷，比如說，以一種與過去不同的形式，但後來我們能夠克服這些問題。然後現在進入第四季度，你會知道我們的產能有所改善或增加。所以我們計劃充分利用新的產能，以便我們可以盡可能地彌補延遲。

[Interpreted]

[解讀]

Now then -- my next question is, as was the guidance in the previous quarter, it is the same communication, meaning that the company is looking forward to a turnaround in the fourth quarter. So that is, as I understand, on the back of the recovery in the mobile industry, but so I wonder whether the assessment or the projection by the company still remains valid. And does the company believe that there is now some visibility into the achievement of this goal. And of course, if there is a turnaround that is achieved, then perhaps things might improve. But still, I would say that the environment is still challenging. For example, the rates remain high. Borrowings appear to have gone up again throughout the quarters again. So that would also bring up the interest expense as well. So this is by no means an easy environment for the company. And I wonder whether there are any financing activities planned for the company to strengthen its liquidity? And also how does the company plan to repay its borrowings?

現在，我的下一個問題是，與上一季的指導一樣，這是相同的溝通，這意味著該公司期待在第四季度實現扭虧為盈。據我了解，這是在行動產業復甦的背景下進行的，但我想知道該公司的評估或預測是否仍然有效。該公司是否認為現在對實現這一目標有一定的了解？當然，如果實現了轉變，那麼也許情況可能會有所改善。但我仍然想說，環境仍然充滿挑戰。例如，利率仍然很高。本季的借款似乎再次上升。因此，這也會增加利息支出。因此，這對公司來說絕非一個輕鬆的環境。我不知道公司是否計劃進行融資活動以增強流動性？公司計劃如何償還借款？

[Interpreted]

[解讀]

Now regarding the turnaround, yes, it remains as our target for Q4, and we keep working very hard toward it. And I would like to ask for your patience and support as we continue to work towards this, which remains as a valid target for us. And yes, it is true that the market environment is not easy. But throughout this, what we have been focusing on, is to drive cost innovation so that we will be able to improve our profitability to the level of the market.

現在關於扭虧為盈，是的，它仍然是我們第四季的目標，我們將繼續努力實現這一目標。在我們繼續努力實現這一目標的過程中，我想請求您的耐心和支持，這仍然是我們的有效目標。是的，市場環境確實並不輕鬆。但自始至終，我們一直關注的是推動成本創新，以便我們能夠將獲利能力提高到市場水平。

So again, the company has been focusing its capabilities on doing this. And once the market improves, I must say that, of course, there have been these ups and downs in the past, but I must say that this time around this, let's say, the tough time is quite long and perhaps a bit more challenging than before. But once this is over, then I believe that all the activities that we have persisted with during that time are going to come back to us with quite a lot of benefits. So in the meantime, the company intends to strengthen its key businesses and also continue to drive ahead with the cost innovation, so that we will be able to improve our -- so in line with the market environment.

因此，該公司一直將其能力集中在這方面。一旦市場好轉，我必須說，當然，過去也有過這些起伏，但我必須說，這一次，可以說，艱難的時期相當長，也許更具挑戰性比以前。但是一旦這一切結束了，那麼我相信我們在那段時間所堅持的所有活動都會為我們帶來很多好處。因此，同時，公司打算加強其關鍵業務，並繼續推進成本創新，以便我們能夠改進我們的業務，從而與市場環境保持一致。

And as we have been going through this tough time for about 2 years now. And as you would know, this is the kind of a business or an industry that requires quite a lot of investment with not so much return in the beginning, which is something that you all know. And so as we have gone through this tough time for some time, it is also true that it has had an impact on our financial strength. And so of course, there are various options in financing, but then we tend to keep to the traditional approach, which means that we still are maintaining stability. So rather than the stock market now going to the financial market, we can sense that there is still quite a lot of trust in the company. So we have been working to get financing from government-run banks as well as large commercial banks. So indeed, most of the major financial institutions are working to finance a low interest and long-term instruments.

我們已經經歷了這段艱難的時期大約兩年了。正如你們所知，這是一個需要大量投資而一開始卻沒有那麼多回報的企業或行業，這是你們都知道的。因此，當我們經歷一段時間的困難時期時，它也確實對我們的財務實力產生了影響。當然，融資方面有多種選擇，但我們傾向於保持傳統方式，這意味著我們仍然保持穩定。因此，我們可以感覺到，與其說股票市場現在轉向金融市場，不如說人們對公司仍然有相當多的信任。因此，我們一直在努力從政府銀行和大型商業銀行獲得融資。事實上，大多數主要金融機構都在努力為低利率和長期工具提供融資。

[Interpreted]

[解讀]

The following question will be presented by Hyun-Soo Kim from Hana Securities.

以下問題將由韓亞證券的 Hyun-Soo Kim 提出。

[Interpreted]

[解讀]

Thank you for giving me the opportunity to ask my questions. I also have 2 questions, one on LCD TV and another on OLED TV. Now for the LCD TV, there have been reports lately that main major set makers will be increasing their purchasing of panels. Then I wonder what the company's direction is in terms of the LCD TV business, including the Guangzhou LCD fab. And the second question is, there was earlier guidance on the increase in the shipment of medium to large-sized panels in Q4. And the question is then whether it is reflecting the expected seasonality at the year-end with expected demand recovery? And also, if that is the case, then what would be the projection or the outlook for the large OLED shipment for the year? And also what is the company's plan for the medium- to long-term operations and also what is the company's projection for the longer-term profitability?

感謝您給我機會提出問題。我還有兩個問題，一個關於液晶電視，一個關於OLED電視。而液晶電視方面，近期有消息指出，各大整機廠商將加大面板採購力度。那我想知道公司在液晶電視業務方面的方向是什麼，包括廣州液晶工廠。第二個問題是，早先有關於第四季中大尺寸面板出貨量增加的指引。那麼問題是，這是否反映了年底預期的季節性和預期的需求復甦？而且，如果是這樣的話，那麼今年大型 OLED 出貨量的預測或前景會如何？公司的中長期經營計畫是什麼，公司對長期獲利能力的預測是什麼？

[Interpreted]

[解讀]

This is the CFO responding to your questions. Now as has been the question, yes, it is true that there have been quite a lot of questions about the -- from the set makers about their sourcing of the LCD TV panel.

這是財務長回答您的問題。現在就像問題一樣，是的，確實有很多關於電視機製造商關於液晶電視面板採購的問題。

Now, there has been -- there is quite a geographic concentration of the LCD TV production capacity. And also because of the U.S.-China friction due to -- in consideration of the CSM stability, it is true that many companies are now trying to diversify their sourcing strategy and as a result, are also increasing their inquiries to the company.

現在，液晶電視產能在地理上已經相當集中。此外，由於中美摩擦，考慮到 CSM 的穩定性，確實許多公司現在正在嘗試多元化其採購策略，因此也增加了對公司的詢問。

But within the larger direction and the larger framework of upgrading the business structure, the company's strategy on LCD TV business remains unchanged. Having said that, we would have to wisely and flexibly respond to the request coming from the set makers, so that we can strategically respond with varying options, so that we will be able to enhance the value of our LCD fab.

但在業務結構升級的大方向、大框架內，公司液晶電視業務的策略並沒有改變。話雖如此，我們必須明智且靈活地回應整機製造商的要求，以便我們能夠有策略地做出不同的選擇，從而提高我們液晶顯示器工廠的價值。

[Interpreted]

[解讀]

And this is [Won-Jae Lee] In-Charge of large display marketing.

這是負責大型展示行銷的[Won-Jae Lee]。

Now, it is expecting that panel shipments in -- the panel shipment is expected to grow over the third quarter, thanks to seasonality. But then the actual sales are not going to be as strong as the ordinary seasonality, due to macro impact and also the demand for high-end remains sluggish. Now having said that, we are also seeing intensifying product competition for the ultra-large LCD sales coming from the Chinese region. And also with the continuation of the inventory correction policy among the set makers as well as the retailers, they expect that the panel shipments for the year is going to be under the set shipment at around 5 million units.

現在，由於季節性原因，預計第三季面板出貨量將成長。但受宏觀影響以及高端需求依然低迷，實際銷售不會像一般季節性那麼強勁。話雖如此，我們也看到來自中國地區的超大尺寸液晶顯示器銷售的產品競爭正在加劇。而且隨著整機廠及零售商持續修正庫存政策，預計全年面板出貨量將低於設定出貨量500萬片左右。

But now from 2024, there has been negative growth in demand for high-end products. And then also, so from 2024, there is going to -- it is expected that there will be a negative demand for high-end products. And also the inventory will be -- will go back to normal. And so based on our stable customer base, the company believes that we will be able to strengthen our position in the high-end market. And also the set makers' profitability is improving, and based on the higher volume and larger sales, the company expects to keep improving its profitability.

但現在從2024年開始，高端產品的需求出現了負成長。而且，從 2024 年開始，預計高端產品的需求將會出現負成長。庫存也將恢復正常。因此，基於我們穩定的客戶群，公司相信我們將能夠鞏固我們在高端市場的地位。此外，設備製造商的獲利能力正在改善，基於更高的銷量和更大的銷量，該公司預計其獲利能力將繼續提高。

And this year, our efforts for cost innovation continued by trying to lower the material costs, especially in key components and materials -- and then going into next year, we will be running our fab in linkage to the real demand, so they will be able to optimize the labor costs and also the fixed cost and variable cost. And we will try to improve our revenue per production capacity or production area, especially in non-TV businesses so that we will be able to improve overall profitability.

今年，我們繼續致力於成本創新，努力降低材料成本，特別是關鍵零件和材料的成本，然後進入明年，我們將根據實際需求來運營我們的工廠，因此它們將能夠優化勞動力成本以及固定成本和變動成本。我們將努力提高單位產能或生產面積的收入，特別是在非電視業務方面，以便我們能夠提高整體獲利能力。

[Interpreted]

[解讀]

The following question will be presented by Dongwon Kim from KB Securities.

以下問題將由 KB 證券公司的 Dongwon Kim 提出。

[Interpreted]

[解讀]

Now I have 2 questions about the Auto Display business. Now given the recent sluggish demand for EVs, then in the previous quarter, in the previous conference call, the company gave the guidance of about 15% revenue growth for auto business over the medium to longer term. And I wonder whether this guidance remains still valid for the company? And then also, what is the auto -- for the medium to longer term, what is the order backlog for the auto business? And out of that, what is the share of the OLED business? And then what would be the overall -- and also based on the circumstances, does the company believe that it will be able to turn around the auto display business next year? And also what is going to be the overall auto shipment guidance for the medium to longer term.

現在我有兩個關於汽車顯示業務的問題。現在考慮到最近電動車的需求低迷，那麼在上個季度，在之前的電話會議中，該公司給出了中長期汽車業務收入增長15%左右的指導。我想知道該指導對公司是否仍然有效？還有，汽車是什麼？從中長期來看，汽車業務的積壓訂單是多少？其中，OLED業務的份額是多少？那麼整體情況如何，也是根據目前的情況，公司是否相信明年車顯業務能夠轉虧為盈？以及中長期的整體汽車出貨量指引。

[Interpreted]

[解讀]

This is Ki-Hwan Son, Vice President of Auto Marketing.

我是汽車行銷副總裁 Ki-Hwan Son。

Now first, about revenue. The revenue for the year will be within 10% of the company-wide revenue. And then for the next 5 years, we are looking forward to revenue growth in the [mid-teen] percent level. And as for the order backlog, it is in the low KRW 20 trillion for this year, and it is set to grow by approximately 30% until 2025.

首先，關於收入。全年收入占公司總收入的比例將在10%以內。然後，在接下來的 5 年裡，我們期待收入以百分比水準成長。至於積壓訂單，今年僅20兆韓元，預計2025年將成長約30%。

And in terms of the share of the order backlog for the high-end Tandem OLED panel, it will be in the low 40% for this year and will top 50% from '25 and on. And given the fact that the stable revenue growth continues for OLED, it is expected that its profit contribution will also continue to grow.

而就高階Tandem OLED面板的積壓訂單份額而言，今年將處於40%的低位，從25年起將突破50%。而鑑於OLED營收持續穩定成長，預計其獲利貢獻也將持續成長。

And then moving on to the next question, which is about the opportunities and risks or threats in the automotive business. Now first, about the opportunities. We see that the auto market itself is gradually moving towards EV and SEV, meaning that it is becoming more and more the vehicle for lifestyle. And that means that the presence of the auto display is going to become even more important. And this is going to drive further demand for OLED, as well as large display.

然後繼續下一個問題，即汽車行業的機會和風險或威脅。首先，關於機會。我們看到汽車市場本身逐漸走向EV和SEV，這意味著它越來越成為生活方式的交通工具。這意味著汽車顯示器的存在將變得更加重要。這將進一步推動對 OLED 以及大型顯示器的需求。

And in terms of risks, now because of the continued sluggish demand in TV and IT, there is actually a heightened competition around auto display. But then thanks to the company's Tandem OLED technology as well as its superiority in LCD and other technology, and also based on our strong relations and cooperation with global partners, the company will be able to continue to strengthen its competitiveness in winning contracts.

而從風險來看，現在由於電視、IT需求持續低迷，汽車顯示的競爭其實更加激烈。但憑藉該公司的Tandem OLED技術以及在LCD等技術方面的優勢，並且基於我們與全球合作夥伴的牢固關係和合作，公司將能夠繼續增強其贏得合約的競爭力。

[Interpreted]

[解讀]

The following question will be presented by Kyuha Lee from NH Investment & Securities.

以下問題將由 NH Investment & Securities 的 Kyuha Lee 提出。

[Interpreted]

[解讀]

My first question is, according to the LCD panel prices that have been announced by a research organization early this week, there are signs that the panel prices are falling among the small and medium-sized LCD TV, then what does the -- what is the company's outlook for the ASP in the second half and also for the longer term? And the second question is, again, what is the company's outlook for the demand per application in 2024? And compared to this year, what does the company believe, will be some of the meaningful changes next year in the market?

我的第一個問題是，根據本週早些時候一家研究機構公佈的液晶面板價格，有跡象表明中小尺寸液晶電視的面板價格正在下降，那麼這是什麼意思呢？公司對下半年及長期的平均售價有何展望？第二個問題是，公司對 2024 年每個應用程式的需求前景如何？與今年相比，公司認為明年市場會發生哪些有意義的變化？

[Interpreted]

[解讀]

This is [Keong Yi] in charge of Business Intelligence, and I would like to answer the 2 questions at once.

我是負責商業智慧的[Keong Yi]，我想一次回答兩個問題。

Now first, about the TV panel price. It has been on the rise since October last year and has been on an upward trend for the past 1 year or so. And then going into the latter half of October, it began to slightly fall by the small and midsized products.

首先，關於電視面板的價格。從去年10月份開始就一直呈現上升趨勢，近1年多一直呈現上升趨勢。進入10月下半月，受中小型產品影響，開始小幅回落。

And it is believed to be the result of the set makers conservative management and conservative policy given the fact that we are not yet in a structural recovery of real demand and also, we are going into the seasonality in the first half of next year.

鑑於我們尚未進入實際需求的結構性復甦，而且我們將在明年上半年進入季節性，因此這被認為是設備製造商保守管理和保守政策的結果。

And it is expected that the panel makers will continue to flexibly adjust the utilization based on demand so that we can minimize the price volatility and continue to try to stabilize the ASP.

預計面板製造商將繼續根據需求靈活調整使用率，以便將價格波動降至最低，並繼續努力穩定平均售價。

Looking ahead, there might be some ups and downs depending on the seasonality, but then the company believes that the ASP will remain at the level that would be higher than the industry's production cost.

展望未來，根據季節性因素，可能會有一些起伏，但公司相信平均售價將保持在高於行業生產成本的水平。

Now about the price for the IT panels. It has been -- it has remained flattish for some time now. And now over the medium to long term, there are concerns of intensifying competition with expectations of demand recovery as well as the stronger supply capability of Chinese makers.

現在談談 IT 面板的價格。一段時間以來，它一直保持平淡。現在中長期來看，隨著需求復甦的預期以及中國製造商供應能力的增強，人們擔心競爭會加劇。

So given that there are a combination of both positive and negative factors, the IT panel price is likely to remain flattish going into next year as well.

因此，考慮到正面和負面因素的綜合影響，IT面板價格可能會在明年保持穩定。

Next is on the demand outlook. Now in terms of TV, it seems as if the structural slow demand has been established. So it appears as if the demand is going to remain flat into next year as well. But there appears to be a strong demand for ultra large products. So then in terms of the area, then it is likely to achieve about mid-single-digit growth. And for panel demand, thanks to the healthier inventory, we expect a slight growth in panel demand compared to this year.

接下來是需求前景。現在就電視而言，結構性需求放緩似乎已經成立。因此，明年的需求似乎也將保持穩定。但對超大型產品的需求似乎很強勁。那麼就面積而言，它很可能會實現大約中個位數的成長。對於面板需求而言，由於庫存狀況較好，我們預計面板需求將較今年略有增加。

Now in IT, overall, negative growth continues, led by B2B and high end. It is also true that macroeconomic uncertainties remain like high interest and inflation. But then the negative growth has slowed down in 2023 and now there are expectations of recovery from the second half and on.

現在，在 IT 領域，總體而言，在 B2B 和高階領域的帶動下，負成長仍在繼續。宏觀經濟的不確定性確實仍然存在，例如高利率和通貨膨脹。但到了2023年，負成長已經放緩，目前預計下半年及以後將出現復甦。

And likewise, for IT, the panel demand is expected to achieve positive growth as the set inventory has become healthier.

同樣，對於IT而言，隨著整機庫存變得更加健康，面板需求預計將實現正成長。

And last is on the smartphone. In terms of the smartphone, the market is generally in saturation. So we see that the -- it continues to remain sluggish.

最後是在智慧型手機上。就智慧型手機而言，市場普遍處於飽和狀態。所以我們看到——它繼續保持低迷。

Now having said that, it is a positive factor that the OLED market, which is the target market for the company is maintaining positive growth. And looking into 2024, we look forward to similar positive growth in both set and panels.

話雖如此，公司目標市場OLED市場保持正成長是一個正面因素。展望 2024 年，我們期待電視機和麵板業務也能實現類似的正面成長。

Thank you. We will take one last question.

謝謝。我們將回答最後一個問題。

[Interpreted]

[解讀]

The last question will be presented by (inaudible) from [Kim Securities].

最後一個問題將由 [Kim Securities] 的（聽不清楚）提出。

[Interpreted]

[解讀]

I have a question about the preparation on the IT OLED, which you said to go into volume production in 2024. So it was mentioned earlier that the preparation is underway smoothly. But then I wonder whether there are any changes to -- compared to the previous plan? And also, what is the outlook for the market size and competition. So if you could -- if the company could provide us with further update, please?

我有一個關於IT OLED的準備工作的問題，你說2024年量產。所以前面提到準備工作進展順利。但我想知道與之前的計劃相比，是否有任何變化？此外，市場規模和競爭的前景如何。那麼，如果您可以——公司是否可以向我們提供進一步的更新，好嗎？

This is [Ming Hang Lee] In Charge of Medium, Small Display Strategy. Now for the IT OLED, as has been disclosed, the plan is to continue to invest into the first quarter of next year. And after the investment is completed, then we will go into mass production and the preparation is well underway. We will apply the technology that has been accumulated in auto, as well as the large OLED business, so that we will produce high-end panels that have the advantage of low power and long life.

我是[Ming Hang Lee]，負責中、小型顯示策略。現在對於IT OLED，正如已經披露的那樣，計劃繼續投資到明年第一季。投資完成後，我們將進入量產階段，準備工作也順利進行中。我們將應用在汽車以及大型OLED業務中累積的技術，生產具有低功耗和長壽命優勢的高端面板。

And over the mid- to long term, in terms of the pace of OLED penetration, we believe that it is going to differ depending on the characteristics of the IT product as well as the consumers' acceptance. So it is important for the company to wisely respond to varying customer needs and market opportunities by utilizing the existing infrastructure.

而從中長期來看，就OLED滲透速度而言，我們認為會根據IT產品的特性以及消費者的接受程度而有所不同。因此，對於公司來說，利用現有基礎設施明智地回應不同的客戶需求和市場機會非常重要。

We will now close Q3 2023 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.

我們現在將結束 2023 年第三季財報電話會議。再次感謝您今天加入我們。如有任何其他問題，請聯絡我們的 IR 團隊。謝謝。

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[本文字記錄中標記為[已翻譯]的部分是由現場通話中的口譯員朗讀的。]