Posts: 7,887 +81
What just happened? LG has waved goodbye to another part of its business. After it shuttered its long-running smartphone arm last year, the Korean giant is now exiting the solar panel market, blaming the increasing cost of materials and logistics along with severe supply constraints.
LG started its solar panel business in 2010 with an emphasis on higher-efficiency premium modules, reports the Korean Herald, but competition with Chinese rivals and their lower prices has seen profits dwindle. Sales have declined from 1.1 trillion won ($922 million) in 2019 to 800 billion won in 2020 as its global market share hovered around 1% for years.
The decision to stop producing solar panels followed a board meeting yesterday. Production will start to wind down next month, and LG will stop making panels and modules by June 30.
Shuttering LG’s solar panel business will impact 160 employees and 60 contract workers at its corporate campus in Huntsville, Alabama, where the company has been assembling panels since 2018. The staff are expected to be reassigned elsewhere or let go. In South Korea, 900 employees will be relocated to other business divisions.
For LG’s solar panel customers in the US, it promises to support them “for years to come” and will honor any limited warranties on products.
“While exiting the solar panel business, LG is concentrating on products and services that can have an even greater impact,” said Thomas Yoon, president and CEO of LG Electronics North America. “Sustainability is a core business principle at LG Electronics, and we are constantly evaluating the ways in which LG can unlock potential, create greater value and support our vision for a better life for all.”
After six years of losing money, LG decided to close its mobile unit in April last year. The company had been the third-largest phone maker in 2013, but its market share had fallen to around 2% at the time of the shuttering.