The company will begin slowing down the production of solar panels in the coming month.
LG Electronics has announced it is leaving the solar panel industry because of rising costs for materials and supply chain challenges and a heightened level of the price market.
“The decision is taken as the global solar panel industry risks continue to grow because of a range of factors that contribute to the uncertainty, such as the increasing competition for prices and the increasing cost of the raw materials,” LG said.
LG’s solar business panels are now joined by the company’s smartphone business to be buried, the latter company being shut down in April, as it couldn’t compete with other brands of smartphones on the market. Before being shut down, the company had registered 22 consecutive quarters of losses.
The decision was ratified at the meeting of board directors Monday evening, LG said.
LG’s production of solar panels is set to begin slowing down in the coming month. The company announced this, and the company would officially close at the end of June.
In a letter to the current customer base, the firm stated that it would continue to offer solar panel assistance to US users for “years to be to.” The company did not specify the length of time support will be provided.
The decision to end the solar panel manufacturing business will result in 160 employees and 60 contract workers at Huntsville, Alabama, either being removed or relocated onto LG’s different manufacturing facilities. For South Korea, approximately 900 employees will be relocated to various business units and work.
The company also announced it would transfer its resources to other “growth sectors” products, including energy storage systems and home energy management systems.
The rising cost of materials and supply chain issues negatively affect the operations of LG extends far beyond the solar panel business. LG’s overall operating profit in the fourth quarter fell by 21% year-on-year because of these reasons.
In the announcement of the slump for the fourth quarter, LG said that it anticipated the issues to continue until 2022.
