LG Electronics headquarters in Yeouido, western Seoul (Bloomberg)
LG Electronics said Wednesday it is exiting its solar panel business, citing unfavorable market conditions such as rising costs and price competition as the key factors.
The Korean tech giant, following a board meeting on Tuesday, said it would stop producing solar panels and modules by June 30, with some 900 employees being relocated to other business divisions, including those of other LG companies.
LG started its solar panel business back in 2010 with an emphasis on higher-efficiency premium modules. But it has suffered slowing profits amid cutthroat competition with Chinese rivals with cheaper pricing, fueled by the rising prices of raw materials.
For years, its global market share has remained at about 1 percent. Sales also fell from 1.1 trillion won ($922 million) in 2019 to 800 billion won in 2020.
LG said it would continue to do work in the energy business such as energy storage system and energy management for buildings. But the existing energy business division will focus on nurturing future growth drivers like robotics.
This is LG’s second pullback from a major business sector over the past year. In April last year, the firm made a surprise announcement that it was halting its 26-year-old smartphone business due to years of losses.
Following the exit, the firm poured resources into more lucrative automotive parts business, setting up a joint venture, called LG Magna e-Powertrain Co., together with Canadian automotive supplier Magna International.