LG Display Co Ltd (LPL) 2021 Q1 法說會逐字稿

[Interpreted] Good afternoon. This is Daniel Lee, in charge of LG Display's IR. On behalf of the company, let me thank all the participants at this conference call.

[翻譯] 下午好。我是 LG Display 的 IR 負責人 Daniel Lee。我代表公司感謝本次電話會議的所有參與者。

Today, I'm joined by the CFO, DH Suh; Heeyeon Kim, Senior Vice President of Corporate Strategy Group; Seung Min Lim, Vice President of Corporate Planning; Stephen Ko, Vice President of TV Marketing; Jae Yong Kwon, Vice President of IT, Strategy and Marketing; and Ki-Joon Jin, in charge of auto marketing.

今天，首席財務官 DH Suh 加入了我的行列；企業戰略集團高級副總裁 Heeyeon Kim；企業規劃副總裁Seung Min Lim；電視營銷副總裁Stephen Ko； IT、戰略和營銷副總裁 Jae Yong Kwon； Ki-Joon Jin，負責汽車營銷。

The conference call today will be conducted for 1 hour in both Korean and English, starting with the presentation on the financial results of Q1 2021 and the company's outlook for Q2, followed by Q&A.

今天的電話會議將以韓語和英語進行 1 小時，首先介紹 2021 年第一季度的財務業績和公司對第二季度的展望，然後是問答環節。

Please refer to the IR presentation document in the company's website for more details on the financial results of Q1 2021. For those joining through the webcast, please refer to the details on the widget on your screen.

有關 2021 年第一季度財務業績的更多詳細信息，請參閱公司網站上的 IR 演示文件。對於通過網絡廣播加入的人，請參閱屏幕上小部件上的詳細信息。

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 been audited yet 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，今天的結果基於為您的利益而準備的綜合 IFRS 標準，並且尚未經過外部審計師的審計。

With that said, we will now start with the presentation on Q1 2021 earnings results. Let me start off with our business performance in Q1. Revenue was down 8% quarter-on-quarter, reporting KRW 6.883 trillion. Solid demand and price increase continued for large products, but mobile shipment decreased due to seasonality. Operating profit was KRW 523 billion, decreasing Q-o-Q on the back of reduced mobile shipment. Operating margin was 8% with EBITDA margin at 24%. Net profit was KRW 266 billion.

話雖如此，我們現在將開始介紹 2021 年第一季度的收益結果。讓我從第一季度的業務表現開始。收入環比下降 8%，為 6.883 萬億韓元。大型產品的穩健需求和價格繼續上漲，但移動出貨量因季節性而下降。營業利潤為 5230 億韓元，由於移動出貨量減少而環比下降。營業利潤率為 8%，EBITDA 利潤率為 24%。淨利潤為2660億韓元。

Next is area shipment and ASP. Area shipment in Q1 was 8.54 million square meters, down slightly from 8.66 million square meters of the previous quarter. Demand for medium- and large-sized panels stayed strong despite the seasonality. With seasonality affecting mobile panels, ASP was $736 marking a decrease of 7% Q-o-Q, but increased by 30% Y-o-Y. The company's production capacity in Q1 increased 3% Q-o-Q as we respond flexibly to market demand.

接下來是區域裝運和 ASP。第一季度出貨面積為854萬平方米，較上一季度的866萬平方米略有下降。儘管存在季節性，但對中大型面板的需求依然強勁。由於季節性影響移動面板，ASP 為 736 美元，環比下降 7%，但同比增長 30%。公司一季度產能環比增長3%，靈活應對市場需求。

Next is Q1 revenue breakdown by product segment. In terms of the revenue breakdown, IT panel accounted for the highest portion at 40% and TV panels, 31%. Mobile and others accounted for 29%, down 5 percentage points quarter-on-quarter due to reduced shipment of small to midsized OLED panels.

接下來是按產品細分的第一季度收入明細。從收入細分來看，IT 面板佔比最高，為 40%，電視面板佔比為 31%。由於中小型 OLED 面板的出貨量減少，移動和其他佔 29%，環比下降 5 個百分點。

Next is the company's financial position and ratios. The company's cash and cash equivalent at the end of Q1 was KRW 4.352 trillion. Inventory was KRW 2.352 trillion, increasing by KRW 181 billion Q-o-Q as we preemptively responded to part shortage. As for financial ratios, liabilities-to-equity ratio was 175% and current ratio was 101%, remaining unchanged Q-o-Q. Net debt-to-equity ratio came in at 75%, posting an improvement Q-o-Q. Cash flow was up KRW 55 billion quarter-on-quarter, coming in at KRW 4.352 trillion at the end of Q1. Borrowings decreased by KRW 214 billion Q-o-Q.

接下來是公司的財務狀況和比率。公司一季度末現金及現金等價物為4.352萬億韓元。庫存為 2.352 萬億韓元，由於我們先發製人地應對零件短缺，因此比上一季度增加了 1,810 億韓元。財務比率方面，負債權益比為175%，流動比率為101%，環比持平。淨債務權益比率為 75%，環比有所改善。現金流環比增加 550 億韓元，第一季度末達到 4.352 萬億韓元。借款環比減少 2140 億韓元。

Next is presentation by the company's CFO, DH Suh.

接下來是公司首席財務官 DH Suh 的介紹。

[Interpreted] Good morning. This is DH Suh, CFO of LG Display. Before presenting on Q1 performances, I would like to thank all of you, our shareholders, investors and analysts for your unwavering support even as uncertainties continue from the extended impact of COVID-19. I will now brief you on the company's Q1 performance.

[翻譯]早上好。我是 LG Display 的首席財務官 DH Suh。在介紹第一季度業績之前，我要感謝你們所有人、我們的股東、投資者和分析師的堅定支持，即使 COVID-19 的長期影響仍存在不確定性。下面就公司一季度的業績情況向大家介紹一下。

Despite the seasonality, strong demand continued for TV and IT products, along with the stay-at-home economy trend, LCD panel price rose more sharply than expected due to such issues as part supply. As such, financial performance this quarter remained solid from the previous quarter. Revenue fell 8% Q-o-Q due to seasonality, but it was higher by 46% Y-o-Y. It was KRW 6.883 trillion higher than in other years in the first quarter.

儘管存在季節性，但電視和IT產品的需求持續強勁，加上宅經濟趨勢，受部分供應等問題影響，液晶面板價格漲幅超出預期。因此，本季度的財務表現與上一季度相比仍然穩健。由於季節性，收入環比下降 8%，但同比增長 46%。第一季度比其他年份高出 6.883 萬億韓元。

In terms of P&L, the company achieved 8% operating profit margin by responding agilely to market opportunities even as concerns grow over part supply in the industry, such as glass and semiconductors. EBITDA margin was 24%, staying at 20% level since the last quarter. In particular, the most meaningful achievement in Q1 was sales of OLED TV. Despite the seasonality, it recorded 1.6 million units of shipment, which is on par with the peak season level in Q4. With the changes in lifestyle triggered by COVID-19, customers and end consumers are clearly seeing the fundamental and distinct values of OLED.

在損益方面，即使玻璃和半導體等行業對零件供應的擔憂加劇，公司通過敏捷響應市場機會實現了 8% 的營業利潤率。 EBITDA 利潤率為 24%，自上一季度以來保持在 20% 的水平。特別是，第一季度最有意義的成就是OLED電視的銷售。儘管存在季節性，但出貨量為 160 萬台，與第四季度的旺季水平持平。隨著 COVID-19 引發的生活方式變化，客戶和最終消費者清楚地看到了 OLED 的基本和獨特價值。

The company's IT business, equipped with unique competitiveness has been maintaining stable performance by responding flexibly to the COVID-related demand growth. As for mobile business, we were able to considerably reduce volatility by improving elements of operational stability, such as yield and quality, although there was some seasonal impact in the first quarter.

公司具有獨特競爭力的IT業務，通過靈活應對疫情相關需求增長，保持業績穩定。至於移動業務，我們能夠通過提高運營穩定性的要素（例如產量和質量）來顯著降低波動性，儘管第一季度存在一些季節性影響。

Next is on the guidance for Q2 2021. In Q2, solid demand is expected for large panels like TV, monitors and notebook PCs. Area shipment will grow by mid- to high single-digit Q-o-Q, while ASP is expected to fall by mid- to high single digit, feeling the impact of reduced mobile shipment due to seasonality. But our actual performance is subject to market circumstances, especially given the risk of cost increase coming from the part supply issue such as semiconductors. The company's view on the part supply situation is that it is a structural issue that is short-term uncertainty, and thus, we are preemptively and carefully reviewing our responses from a longer-term perspective. We will try to minimize the impact by strengthening our readiness while keeping a close eye on the market.

接下來是 2021 年第二季度的指導。在第二季度，預計對電視、顯示器和筆記本電腦等大型面板的需求強勁。地區出貨量將以中高個位數環比增長，而平均售價預計將以中高個位數下降，受到季節性移動出貨量減少的影響。但我們的實際表現取決於市場情況，特別是考慮到半導體等零件供應問題帶來成本增加的風險。公司對零件供應情況的看法是，這是一個短期不確定性的結構性問題，因此，我們正在從更長期的角度先發製人並仔細審查我們的應對措施。我們將通過加強準備工作，同時密切關注市場，盡量減少影響。

Next is update and outlook for each business segment. Mainstreaming OLED is the most important of our 3 key strategic tasks. Internally, we are further improving yield and productivity, while out in the market, we are trying to drive sales in the premium segment with the goal of improving profitability. For the mobile business, growth in sales volume Y-o-Y is expected on the back of improved productivity and operational stability, we will solidify the opportunity for a turnaround by thoroughly preparing for mass production of new models in the second half.

接下來是每個業務部門的更新和展望。 OLED 主流化是我們 3 項關鍵戰略任務中最重要的一項。對內，我們正在進一步提高產量和生產力，而在市場上，我們正努力推動高端市場的銷售，以提高盈利能力為目標。移動業務方面，由於生產力和運營穩定性提高，預計銷量同比增長，我們將通過下半年新機型的量產做好充分準備，鞏固扭虧為盈的機會。

In IT, we are strengthening our partnership with strategic customers based on product and production competitiveness. We will keep bolstering our market leadership and sustain our profitability. And in LCD TV business, we plan to remain flexible in our operations in response to the changing demand and competitive landscape. We will try to maximize our opportunities within the available resources as we work closely together with customers.

在IT方面，我們正在加強與基於產品和生產競爭力的戰略客戶的合作夥伴關係。我們將繼續鞏固我們的市場領導地位並維持我們的盈利能力。而在液晶電視業務方面，我們計劃保持靈活的運營方式，以應對不斷變化的需求和競爭格局。當我們與客戶密切合作時，我們將努力在可用資源範圍內最大限度地利用我們的機會。

Notably, in the second half this year, we anticipate changes in people's consumption patterns following vaccination campaigns and the subsequent improvement in the COVID situation. In particular, changes in people's lifestyle such as growing outdoor activities, could lead to changes in product demand. The company will closely monitor changes in market trends and strengthen our readiness. We will, at the same time, keep improving our financial position through activities designed to ensure financial stability. It is hoped that the rollout of vaccines will gradually ease the anxiety and inconvenience brought on by COVID-19. I do hope for a speedy return to normal and wish that all our shareholders, investors and analysts stay healthy and safe. Thank you for your attention.

值得注意的是，在今年下半年，我們預計人們的消費模式會在疫苗接種運動和隨後的 COVID 形勢好轉後發生變化。特別是人們生活方式的改變，例如戶外活動的增加，可能會導致產品需求的變化。公司將密切關注市場趨勢變化，加強戰備。與此同時，我們將通過旨在確保金融穩定的活動不斷改善我們的財務狀況。希望疫苗的推出將逐漸緩解 COVID-19 帶來的焦慮和不便。我確實希望盡快恢復正常，並希望我們所有的股東、投資者和分析師都保持健康和安全。感謝您的關注。

That brings us to the end of earnings presentation for Q1 2021. We will now take questions. Operator, please commence with the Q&A session.

這使我們結束了 2021 年第一季度的收益報告。我們現在將回答問題。接線員，請開始問答環節。

(foreign language) (Operator Instructions) The first question will be provided by Chung Won Suk from HI Investment & Securities.

（外語）（操作員說明）第一個問題將由 HI Investment & Securities 的 Chung Won Suk 提供。

[Interpreted] I have 2 questions. First is that now we see that the LCD panel price has really increased sharply recently, which also bodes well for the demand for OLED panels. Now for the Guangzhou line, which has completed the set up recently, I wonder what the company's plan is for the medium- to longer-term capacity increase? And also, what is the plan for the capacity increase for the mid- to small-sized panels? Or are there any changes in the company's plan in relation to the recent developments? And then also in relation to this, regarding the sales of OLED TV, we also see that the OLED TV sales have gone up quite a lot. Then we saw -- but then a little has been mentioned about the turnaround timing recently. So when do you expect the turnaround to occur perhaps for the quarterly earnings or for the yearly earnings?

[已解釋] 我有 2 個問題。首先是現在我們看到LCD面板價格最近確實大幅上漲，這也預示著OLED面板的需求。現在廣州線剛剛完成建設，不知道公司對於中長期的產能提升有什麼規劃？另外，中小尺寸面板的產能提升計劃是怎樣的？或者公司的計劃是否與最近的發展有關？然後也與此相關，關於 OLED 電視的銷售，我們也看到 OLED 電視的銷售增長了很多。然後我們看到了——但最近有人提到了一些關於周轉時間的問題。那麼，您預計季度收益或年度收益何時會出現好轉？

And then the second question is about the auto display. So what is the portion out of sales of the auto display as it stands now? And then how much do you believe that the company will be able to pull this up in terms of the portion out of sales, for example, by increasing the sales of OLED and so forth?

然後第二個問題是關於自動顯示的。那麼目前汽車顯示屏的銷售額佔比是多少呢？然後，您認為該公司能夠在多大程度上提高銷售額，例如通過增加 OLED 的銷售額等？

Thank you for the questions. I detect 3 questions. Now first, I believe, was that there has been a sharp increase in the LCD panel price recently. So given the changes in the situation, what is the company's plan for capacity increase for OLED TV as well as for the small- to medium-sized panels?

謝謝你的問題。我檢測到 3 個問題。我認為，首先是最近 LCD 面板價格大幅上漲。那麼隨著形勢的變化，公司對於OLED電視以及中小尺寸面板的產能提升計劃是怎樣的呢？

[Interpreted] Now for the OLED TV, I would say that the market data tells the good story because since the second half of last year, as people have longer time staying at home, we believe that the consumers are also now discovering the true value of OLED TV. So when you look at the TV set market, then there has been growth in this market, and we also see the same trend continuing in the first quarter of this year from the market data. And we also see that amidst this growth, the OLED TV growth has been outpacing the growth in the overall TV market.

[解讀]現在OLED電視，我想說市場數據說明了一個好故事，因為從去年下半年開始，隨著人們在家的時間變長，我們相信消費者現在也正在發現真正的價值OLED電視。所以當你看電視機市場時，這個市場一直在增長，我們也從市場數據中看到今年第一季度繼續保持同樣的趨勢。我們還看到，在這種增長中，OLED 電視的增長已經超過了整個電視市場的增長。

So currently, we have a positive view on the market and also regarding the OLED TVs competitiveness. But having said that, of course, the market is always subject to change and also especially with the signs of the pandemic easing, then it could also have changes on demand. So we would keep a close eye on the market situation into the second and the third quarter of this year and then would make the decision on whether we will be having a further expansion of our capacity or not. And once we have such a decision, then, of course, we would communicate with the market.

因此，目前，我們對市場以及 OLED 電視的競爭力持積極看法。但話雖如此，當然，市場總是會發生變化，尤其是隨著大流行病的緩解跡象，那麼它也可能會根據需求發生變化。因此，我們將密切關註今年第二和第三季度的市場情況，然後再決定是否進一步擴大產能。一旦我們做出這樣的決定，那麼我們當然會與市場進行溝通。

And regarding the question on whether there have been any changes on our plan for the capacity for the small- to mid-sized plastic OLED. Now as you know, we have 30,000 capacity in Paju and 15,000 in Kumi. Our plan now is to maximize our productivity from the existing capacity. So this means that at this point, no decision has been made regarding increase in the capacity of the small to midsized plastic OLED.

關於我們對中小型塑料OLED的產能計劃是否有任何變化的問題。如您所知，我們在坡州有 30,000 個容量，在 Kumi 有 15,000 個容量。我們現在的計劃是利用現有產能最大限度地提高我們的生產力。因此，這意味著目前尚未就增加中小型塑料 OLED 的容量做出任何決定。

Moving on to your second question about the expected turnaround time for OLED TV. Now as I understand that the question was on when OLED TV business will be able to turn around to profit perhaps which quarter within this year. Now for the OLED TV, we see that the market is doing well. And also, we are trying to improve the yield and as well as the quality in order to keep strengthening our competitiveness, and we are getting good signals out of those both fronts. And as to when we will be able to turn around to profit in the OLED TV business, it is difficult for me to pinpoint the exact timing, but I can tell you that we are moving in the right direction.

繼續你關於 OLED 電視的預期周轉時間的第二個問題。據我了解，現在的問題是 OLED 電視業務何時能夠扭虧為盈，也許是在今年的哪個季度。現在對於 OLED 電視，我們看到市場表現良好。而且，我們正在努力提高產量和質量，以不斷增強我們的競爭力，我們從這兩個方面都得到了良好的信號。至於我們什麼時候能夠在 OLED 電視業務上扭虧為盈，我很難確定確切的時間，但我可以告訴你，我們正朝著正確的方向前進。

Now on to your third question about the auto display. Now I would say that the auto market was probably one of the hardest hit from the COVID-19 pandemic and also the market suffered recently because of the issues with the semiconductor supply. But despite the difficulties, the company was able to increase our orders for the auto business to $8.8 billion as of today from the $7.6 billion at the end of last year. And then now down the road, where we -- so this is actually inclusive of the plastic OLED, which we will be further focusing on in the future for -- as one of the key business. So we are currently watching the auto display business as we think about how much further it can grow and how much of a significant revenue source it can be for the company. But what is clear at this point is that EV sales continue to grow and the assumption or the expectation is that the EV sales will further pick up pace in the future. If that is the case, then the plastic OLED, which we believe is the display that is best suited to EVs stands to bring further -- stands to bring bigger orders to the company. So we believe that this will be a very good opportunity for our automotive display business. So the question for this is -- the question for automotive display is not how much it is going to contribute now, but how much we can grow and grow this business in the future for the longer term so that it can become a key business for the company.

現在回答關於自動顯示的第三個問題。現在我要說的是，汽車市場可能是受 COVID-19 大流行打擊最嚴重的市場之一，而且最近由於半導體供應問題而遭受重創。但儘管困難重重，該公司仍能夠將我們的汽車業務訂單從去年底的 76 億美元增加到今天的 88 億美元。然後現在在路上，我們 - 所以這實際上包括塑料 OLED，我們將在未來進一步關注 - 作為關鍵業務之一。因此，我們目前正在關注汽車顯示業務，因為我們正在考慮它可以進一步增長多少，以及它可以為公司帶來多少重要的收入來源。但目前可以明確的是，電動汽車銷量繼續增長，並且假設或預期電動汽車銷量將在未來進一步加快步伐。如果是這樣的話，那麼我們認為最適合電動汽車的顯示器塑料 OLED 將進一步為公司帶來更大的訂單。所以我們相信這對於我們的車用顯示業務來說會是一個非常好的機會。所以這個問題是 - 汽車顯示器的問題不是它現在將貢獻多少，而是我們可以在未來長期發展和發展這項業務多少，以便它可以成為關鍵業務公司。

(foreign language) The following question will be provided by Kim Hyun-soo from Hana Financial Investment.

(外語) 下面的問題將由韓亞金融投資的金賢洙提供。

[Interpreted] I have questions on 2 topics. Now with the shutdown of part of the LCD production, I believe then also for -- and also in consideration of other developments, I believe that the company also has to focus more on the white OLED business to source of revenue. So I was wondering about the schedule of your production ramp-up. So in order to go to like a 10 million by 2023, which is the company's goal, then I do believe that you would also have to increase the production to over the 30,000 capacity, as was mentioned earlier. And it was, of course, explained earlier that, that decision is likely to be shared after the third quarter. But then if you could share with us the more specific schedule regarding the production capacity?

[已解釋] 我有關於 2 個主題的問題。現在隨著部分 LCD 生產的停產，我相信也是為了 - 並且考慮到其他發展，我相信公司也必須更多地關注白色 OLED 業務來增加收入來源。所以我想知道你們的生產提升計劃。因此，為了到 2023 年達到 1000 萬輛，這是公司的目標，那麼我相信您還必須將產量提高到超過 30,000 輛，如前所述。當然，早些時候已經解釋過，該決定可能會在第三季度之後共享。但是，您是否可以與我們分享有關生產能力的更具體的時間表？

And then the second question was about the which -- it is related to the previous question about the electronification or the electronics of the automotive. And regarding the outstanding orders that was mentioned earlier, what is the period of recognizing this as revenue? And also what is the profitability of the automotive electronics orders?

然後第二個問題是關於哪個——它與之前關於電子化或汽車電子的問題有關。還有剛才提到的未完成的訂單，確認為收入的時間是多少？汽車電子訂單的盈利能力如何？

[Interpreted] Now regarding your first question about the timing of the capacity increase for white OLED. Now as was explained earlier, we would have to do some further studies regarding this topic. So we would be reviewing the market situation throughout the second and the third quarter. And when we believe that the right timing comes, then we would make the decision either way and communicate this with the market.

【解讀】關於你的第一個問題，關於白光OLED產能提升的時機。正如前面所解釋的那樣，我們將不得不就這個主題做一些進一步的研究。因此，我們將審查整個第二和第三季度的市場情況。當我們認為正確的時機到來時，我們會以任何一種方式做出決定，並與市場進行溝通。

And regarding the automotive electronics, and the question was when the orders will be recognized as revenue. Now for the automotive electronics, the process is that we would first receive the orders and then go into development, and that takes about 1 to 1.5 years. And then when the delivery is going to be made. And then also how long the delivery is going to last, that also depends on the product and the customers, but then that could be somewhere between 4 to 6 years. So overall, it is quite difficult for us to tell you, on average, what the revenue recognition period is going to be. But then what I can tell you is that you could also -- you could take into account what I have just explained.

而關於汽車電子，問題是訂單何時會被確認為收入。現在汽車電子，流程是先接到訂單，再進行開發，大概需要1到1.5年的時間。然後什麼時候交貨。然後還有交付將持續多長時間，這也取決於產品和客戶，但那可能在 4 到 6 年之間。所以總的來說，我們很難告訴你，平均而言，收入確認期是多長。但是我可以告訴你的是，你也可以——你可以考慮我剛才解釋的內容。

And then regarding the profitability, given that this is a long-term business, it could also have the impact of currency or the exchange rate and also the changes in the cost. But then for the profitability, what we target is that it has to be at the level that would be able to also absorb the cost as well as the risks.

然後關於盈利能力，鑑於這是一項長期業務，它還可能受到貨幣或匯率以及成本變化的影響。但是對於盈利能力，我們的目標是它必須處於能夠吸收成本和風險的水平。

(foreign language) The following question will be provided by (inaudible).

（外語）以下問題將由（聽不清）提供。

Going back to the automotive display business, could you actually provide, broadly speaking, a split between what is LCD currently? And what is already OLED? Then secondly, moving to LCD panels. We -- you indicated earlier that you'll remain flexible in terms of the capacity you continue to use for production of TV panels. Should we understand that you will continue running the Gen 7 capacity you were supposed to close earlier throughout the year? Or are you thinking already of extending this into 2022?

回到汽車顯示器業務，從廣義上講，您實際上能否提供目前 LCD 之間的拆分？什麼已經是 OLED？其次，轉向 LCD 面板。我們 - 您早些時候表示，您將在繼續用於生產電視面板的產能方面保持靈活性。我們是否應該理解您將繼續運行本應在今年早些時候關閉的第 7 代產能？或者你已經在考慮將其延長到 2022 年？

(foreign language)

（外語）

[Interpreted] Now first, regarding your question on the LCD production capacity, yes, for the TV production capacity in Korea, it has already been shut down. But then for the P7, for the production of ultra -- large and ultra large panels, for this, we are maintaining this. So for the LCD fab, we intend to remain flexible in its operation and try to maximize the opportunities that are presented to us within the available resources. So we intend to remain flexible not only throughout this year, but also perhaps possibly into the future, depending on the market circumstances.

【解讀】首先，關於你提到的液晶產能問題，是的，韓國的電視產能已經關停了。但是對於 P7，為了生產超大型和超大型面板，為此，我們正在維護這一點。因此，對於 LCD 工廠，我們打算在其運營中保持靈活性，並儘量在可用資源範圍內最大限度地利用呈現給我們的機會。因此，我們打算不僅在今年保持靈活性，而且可能在未來保持靈活性，具體取決於市場情況。

And then going back to your question, the first question about the automotive display. The question was the -- about the share of POLED and the share of plastic OLED out of the outstanding orders is about 30%. And then to add a bit more to the response regarding the P7 capacity. For the P7 capacity, yes, we are currently maintaining this to deal with the commercial needs as well as the request coming from certain customers. And then it was explained earlier that we have shut down the domestic production of LCD TV. But then rather than completely shutting this down, we have actually converted the capacity for IT production.

然後回到你的問題，第一個關於汽車顯示器的問題。問題是——關於未完成訂單中 POLED 和塑料 OLED 的份額約為 30%。然後在有關 P7 容量的響應中添加更多內容。對於 P7 容量，是的，我們目前正在維護它以處理商業需求以及來自某些客戶的請求。然後前面解釋說我們已經關閉了液晶電視的國內生產。但是我們並沒有完全關閉它，而是實際上轉換了 IT 生產能力。

(foreign language) The last question will be presented by Kim Sung Kyu from Daiwa Securities.

（外語）最後一個問題將由大和證券的Kim Sung Kyu提出。

[Interpreted] I have some questions regarding the IT business. We see that the demand for IT panel is becoming strong. And this also means that the IT panel profitability is also quite high for the company as well. And we see that more recently, even the domestic peers in the IT side are now showing signs of moving from LCD to OLED and also one of the company's strategic customers are also showing signs of additionally -- using additionally OLED for their tablet products. So I wonder what the company's take is regarding the outlook for these changes in the IT market? And how do you foresee such changes affecting the company's strategy? Especially given that the company had the LCD focused strategy, do you believe that this is going to change the strategy for the company?

[翻譯]我有一些關於IT業務的問題。我們看到IT面板的需求越來越旺盛。這也意味著該公司的 IT 面板盈利能力也相當高。而且我們最近看到，即使是國內的 IT 同行現在也出現了從 LCD 轉向 OLED 的跡象，而且該公司的一個戰略客戶也出現了額外的跡象——在他們的平板電腦產品中額外使用 OLED。所以我想知道公司對 IT 市場這些變化的前景有何看法？您如何預見這些變化會影響公司的戰略？特別是考慮到公司有以 LCD 為重點的戰略，您認為這會改變公司的戰略嗎？

[Interpreted] Now first of all, as you would also know, I would like to emphasize that it is not the first time in the IT that the OLED is being adopted because with the preparation starting about 10 years ago, we are now seeing increasing adoption of OLED in the TV products and then also adoption of plastic OLED is increasing in mobile products, especially smartphones. And then now I would say that this really represents the last realm. So between the large products and then the smaller smartphones. Now the midsized segment, which is the IT products. Now this is where -- this is the last, let's say, frontier for the OLED.

[解讀]現在首先，正如你也知道的，我想強調的是，這不是第一次在 IT 中採用 OLED，因為大約 10 年前開始準備，我們現在看到越來越多的OLED 在電視產品中的採用以及塑料 OLED 在移動產品（尤其是智能手機）中的採用正在增加。然後現在我要說這真的代表了最後的境界。所以在大型產品和小型智能手機之間。現在是中型細分市場，即 IT 產品。現在這是——比方說，這是 OLED 的最後一個前沿領域。

And then whether small size or large size, given the advantages that are unique to OLED, I believe that it is only a matter of time that they will be adopted in IT products and also the share of OLED will grow among the IT segment.

然後無論是小尺寸還是大尺寸，鑑於OLED獨有的優勢，我相信它們被IT產品採用只是時間問題，OLED在IT領域的份額也會增加。

So in this context, as for the company's strategy, as we had explained several times from the past, we have always been making the technological preparation for all sizes of OLED, either small to midsize or large size or now the intermediate size for the IT products. So for the IT products, once the OLED is adopted and once the share of OLED begins to grow, then we believe that we also need to have the kind of differentiated advantages that we have always had for the LCD. And we have also seen the possibilities from the foldable IT products that were launched last year. So in terms of the technological and also the production advantages, we are trying to keep strengthening such advantages that we have. So in sum, what I -- and the message is that of -- for the technological advantage that we have enjoyed from the LCD products, I believe that it is important for us to also equip ourselves with the kind of advantages for OLED as well. And that is what we are doing that we are continuing to get ready so that we will be able to leverage our technological competitiveness once the OLED market takes off in the IT segment as well.

因此，在這種情況下，至於公司的戰略，正如我們過去多次解釋的那樣，我們一直在為所有尺寸的 OLED 做技術準備，無論是中小型還是大型，或者現在是 IT 的中間尺寸。產品。所以對於IT產品來說，一旦OLED被採用，一旦OLED的份額開始增長，那麼我們相信我們也需要有我們一直以來為LCD所擁有的那種差異化優勢。我們也看到了去年推出的可折疊 IT 產品的可能性。因此，就技術和生產優勢而言，我們正在努力不斷加強我們擁有的這些優勢。因此，總而言之，我要傳達的信息是，對於我們從 LCD 產品中獲得的技術優勢，我認為對我們來說，重要的是我們也要具備 OLED 的那種優勢.這就是我們正在做的事情，我們將繼續做好準備，以便一旦 OLED 市場在 IT 領域起飛，我們將能夠利用我們的技術競爭力。

We will now close Q1 2021 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 2021 年第一季度收益電話會議。再次感謝您今天加入我們。如有任何其他問題，請聯繫 IR 團隊。謝謝。

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

[此抄本中標記為已翻譯的部分是由現場通話中在場的口譯員說的。]