SEOUL, South Korea — Executives at South Korea’s leading display manufacturers said Thursday they are closely watching the potential economic fallout from the U.S.-Iran conflict, warning that a prolonged crisis could drive up raw material costs and fuel inflation across the technology sector.
Samsung Display Chief Executive Officer Yi Chung said the company is monitoring the situation carefully as geopolitical tensions threaten to add pressure to already rising production costs.
“If the war lasts longer, the price burden of raw materials will rise significantly,” Yi told reporters ahead of a general meeting of the Korea Display Industry Association in Seoul.
Yi added that the industry is already facing difficult conditions due to rising memory chip prices, and the conflict between the United States and Iran could worsen inflationary pressures in the second half of the year.
“While conditions are not favourable due to rising memory chip prices, the war between the United States and Iran is expected to lead to inflation, making the situation even more difficult in the second half,” he said.
Industry analysts have raised concerns that the ongoing artificial intelligence boom, which is pushing up global memory chip prices, could increase costs for smartphone manufacturers. Higher component costs may prompt device makers to reduce shipments, potentially weakening demand for display panels.
“(The performance) of memory chip producers may be strong, but clients using memory chips are facing challenges,” Yi said. “It is crucial (for companies) to reduce production costs and cooperate with partners to enhance competitiveness.”
LG Display Chief Executive Officer Jeong Chul-dong said his company is also closely monitoring developments in the Middle East, though the conflict has not yet directly affected its operations.
“The prices of finished products are rising due to higher memory chip prices, and we are currently assessing what impact it may bring,” Jeong said. “We plan to make moves in response to changes in memory chip supply.”
Jeong added that LG Display will continue efforts to strengthen its financial position and maintain stable profitability as it aims to deliver solid performance in the first half of the year. (Source: IANS)
