South Korean technology company LG Electronics announced Wednesday that it would abandon its struggling solar panel manufacturing business amid the supply chain crisis.
The LG board of directors voted Tuesday to exit the solar industry following a comprehensive review that showed how increasing costs and supply chain constraints have negatively impacted the company’s bottom line, the tech firm announced. The company acknowledged its solar business had “sluggish performance,” causing overall profit to decline in its latest quarterly earnings statement.
“While exiting the solar panel business, LG is concentrating on products and services that can have an even greater impact,” LG Electronics North America President and CEO Thomas Yoon said in a statement.
“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,” he continued. (RELATED: Biden Loosens Trump Tariffs On Solar Panels Despite Labor Unions’ Pleas)
LG will wind down its solar panel production in the coming months, but will continue to serve its customers “for years to come,” it added. The company said it would focus on growth sectors in the renewable energy space such as energy storage technology and home energy management systems.
The announcement will affect about 160 LG employees and 60 contractors at the company’s U.S. headquarters in Huntsville, Alabama. (RELATED: Green Energy Push Is Contributing To Forced Labor, Slavery)
LG had struggled to grow its solar business in recent years, seeing its global market share decline to a measly 1%, Korean Economic Daily reported. Solar panels had declined to just 1.5% of the company’s total revenue.
The company, which entered the solar business in 2010, reported $50 million in sales in 2021, according to KED. By comparison, the company reported $670 million in solar panel sales in 2020 and $920 million in sales in 2019.
Chinese solar companies currently dominate the industry, producing the vast majority of panels, polysilicon for panels and solar wafers worldwide, according to a 2021 analysis from BloombergNEF.
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