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JOURNEY · DETAIL
LG Group: The 77-Year Transformation of a South Korean Chaebol from Face Cream to OLED Panels and EV Batteries
Founded: Koo In-hwoi · LG Corporation
JOURNEY
Key Fields
FIELD STAMPSIndustryEnergy
RegionMulti-region
ScaleGiant
ChannelOther
Origin
Following the liberation of the Korean Peninsula in 1947, Koo In-hwoi leveraged his cosmetic trade experience to found Lak Hui Chemical Industrial Shosa, initially producing a face cream named 'Lucky'. At the time, South Korea had virtually no domestic chemical industry, relying heavily on imports for daily goods. Anticipating that post-war reconstruction would drive demand for consumer goods, Koo used chemical raw materials as an entry point, gradually expanding into plastic products and home appliances. This laid the foundation for LG Group's cross-sector expansion from chemicals to electronics.
Milestones
1947
Foundation PMF
In January 1947, Koo In-hwoi founded Lak Hui Chemical Industrial Shosa in Busan, launching South Korea's first domestic face cream, 'Lucky Cream'. Due to a lack of domestic import substitutes, the product rapidly gained traction in the market, with monthly sales surpassing tens of thousands of boxes within two years. It became one of South Korea's earliest indigenous cosmetic brands, establishing the initial business foundation in chemicals and consumer goods.
1958
Entry into Electronics Turning Point
On October 1, 1958, Koo In-hwoi established GoldStar, the predecessor to LG Electronics, aiming to extend the manufacturing capabilities accumulated in chemicals into electronic products. In 1959, GoldStar produced South Korea's first domestically manufactured vacuum tube radio, the A-501, marking the beginning of South Korea's consumer electronics industry and transforming the group from a pure chemical enterprise into a diversified manufacturer.
1966
Home Appliance Product Line Expansion Growth
In 1966, GoldStar produced South Korea's first black-and-white television, subsequently rolling out product lines including electric fans, refrigerators, and telephones through the 1960s. Elevators went into production in 1968, and by the 1970s, GoldStar had become one of South Korea's largest comprehensive electronics enterprises. Revenue grew from under 1 billion KRW in the early 1960s to over 100 billion KRW by the late 1970s, cementing its position as the domestic home appliance leader.
1995
Group Restructuring and Globalization Turning Point
In January 1995, the group officially renamed Lucky-Goldstar to LG, and Koo Bon-moo succeeded Koo Cha-kyung as group chairman. That same year, LG aggressively expanded overseas, including acquiring a controlling stake in the American television brand Zenith. Unifying the brand under the global identity 'Life's Good' marked a critical juncture in transitioning from a domestic South Korean manufacturer to a multinational corporation.
1999
Exit from Semiconductor Business Failure
Impacted by the Asian financial crisis in 1999, LG Semiconductor was merged with Hyundai Electronics to form Hynix Semiconductor under government pressure, forcing LG to exit the semiconductor business. This was one of the greatest strategic setbacks in the group's history. LG subsequently ceded the semiconductor field to its competitor Samsung, which also prompted the group to refocus its technical core on display panels and chemical materials.
2013
OLED TV Debut Turning Point
In 2013, LG Electronics launched the world's first mass-produced OLED TV with a price tag of around USD 10,000. Despite sluggish initial sales and cumulative panel production line losses exceeding a trillion KRW over consecutive years, LG persisted with its OLED technology roadmap. By the 2020s, OLED TVs became mainstream in the high-end market, with LG Display claiming the top spot globally in OLED TV panel shipments.
2021
Exit from Smartphone Business Failure
In April 2021, LG Electronics officially announced the closure of its smartphone business following 23 consecutive quarters of operating losses totaling approximately 5 trillion KRW. Squeezed by Samsung and Apple, LG's global smartphone share had fallen below 2%, making it the second major multinational giant after Motorola to exit mobile phones. Following the exit, LG shifted resources toward high-margin businesses such as home appliances and automotive components.
2021
EV Battery Recall Crisis Failure
In 2021, General Motors recalled approximately 140,000 Chevrolet Bolt EVs due to battery fire risks, with LG Energy Solution bearing approximately USD 1.9 billion (approx. 2.2 trillion KRW) in recall costs. The incident temporarily triggered severe market skepticism regarding the safety of LG's batteries. However, through improved cell design and capacity expansion, LG rebounded in 2023 to reclaim its position as the world's second-largest enterprise by EV battery installation volume.
2023
Dual-Engine Drive of AI Appliances and New Energy Growth
In 2023, LG Electronics recorded consolidated revenue of approximately 84 trillion KRW, while LG Energy Solution achieved revenue of roughly 34 trillion KRW. From 2024 to 2026, LG accelerated the integration of generative AI into its ThinQ appliance platform, introducing AI washing machines, AI refrigerators, and other product lines. Concurrently, EV battery production capacities in North America expanded through joint ventures with automakers like GM and Honda, creating a three-pillar parallel structure of OLED panels, EV batteries, and AI appliances spanning from 2023 through 2026.
Turning Points
- The establishment of GoldStar in 1958 bridged pure chemicals and electronics manufacturing, laying the fundamental business transformation for LG from chemicals to consumer electronics.
- The 1995 group renaming to LG and Koo Bon-moo taking over as chairman marked the formal strategic transition of a domestic South Korean manufacturer into a global brand.
- The forced merger of LG Semiconductor into Hyundai's Hynix in 1999 caused the group to lose the semiconductor race, prompting it to redirect its technological focus toward display panels and chemical materials.
- The 2013 wager on the OLED TV mass production technology roadmap—persisting with investment despite continuous massive losses in the early years—led to becoming the global leader in OLED panels by the 2020s.
- The decisive closure in 2021 of the smartphone business, which had suffered 23 consecutive quarters of losses, redirected resources to AI appliances and automotive components, completing a strategic amputation-style contraction.
Failures & Pitfalls
- During the 1999 Asian financial crisis, LG Semiconductor was merged with Hyundai Electronics under government direction, leading LG to completely exit the chip industry, cede ground to Samsung, and lose a core sector.
- The smartphone business suffered 23 consecutive quarters of losses, with global market share dropping below 2%, forcing a shutdown and exit in 2021—widely regarded as LG's most significant failure in the mobile era.
- In 2021, the complete recall of 140,000 GM Bolt EVs due to battery fires resulted in LG Energy Solution shouldering approximately USD 1.9 billion in costs, dealing a heavy blow to brand trust and exposing cell design flaws.
- The OLED TV panel production line suffered massive losses for years following its mid-2010s launch, initially evaluated as the group's most dangerous technical gamble that almost dragged down the display business.
关键成功要素
- Using chemical and daily consumer goods as a starting point to accumulate manufacturing capability and capital before extending into home appliances and electronics represents the underlying logic of LG's gradual transition from low-tech to high-tech.
- Decisively exiting and reallocating resources when encountering irreversible setbacks in core sectors—such as exiting semiconductors in 1999 and closing smartphones in 2021—reflects the chaebol decision-making style of self-preservation.
- Continuously wagering on long-cycle, capital-intensive technologies like OLEDs and EV batteries for decades while tolerating consecutive losses is key to LG building barriers in the panel and battery domains.
- Bonding with major clients like GM and Honda through joint ventures to share risks and co-build capacity is LG Energy Solution's supply chain strategy for rapid expansion in the global EV battery market.
- Integrating generative AI into the ThinQ appliance ecosystem by 2026, layering software service revenue on top of traditional hardware, illustrates the AI transition pathway for hardware manufacturers.
Lessons
- Venturing into capital-intensive, high-tech sectors requires adequate psychological preparation and financial reserves for consecutive losses; OLED panels took nearly a decade to transition from production to profitability.
- Failure in a single sector for a diversified chaebol does not mean total defeat; after exiting semiconductors and smartphones, display panels and batteries conversely became growth stars.
- While joint ventures with major clients for capacity expansion dilute upfront investment, they also transmit battery safety risks down to the vehicle manufacturing end, making the lessons of the recall crisis worth pondering.
- Once brand perception in consumer electronics remains marginalized in the smartphone market for a long time, it is difficult to win back consumer mindshare even with decent technology; cutting losses early is more rational than dragging it out.
- The core advantage of the South Korean chaebol model lies in cross-business subsidies and internal capital allocation, but it also tends to cause lengthy decision-making chains and a high reliance on the personal judgment of the group head.
Core Data
- lg_electronics_2023_consolidated_revenue：Approx. 84 trillion KRW (approx. USD 64 billion) (publicly sourced data, independent verification unverified)
- lg_energy_solution_2023_revenue：Approx. 34 trillion KRW (approx. USD 25 billion) (publicly sourced data, independent verification unverified)
- lg_display_2023_revenue：Approx. 20 trillion KRW (publicly sourced data, independent verification unverified)
- oled_tv_panel_shipment_position：Global #1 (Large-size OLED) (publicly sourced data, independent verification unverified)
- global_ev_battery_installation_ranking：#2 in 2023 (publicly sourced data, independent verification unverified)
- lg_electronics_total_employees：Approx. 75,000 (globally) (publicly sourced data, independent verification unverified)
- group_operating_history：Approx. 77 years (1947 to 2024) (publicly sourced data)
- smartphone_business_cumulative_losses：Approx. 5 trillion KRW (prior to 2021 exit) (publicly sourced data, independent verification unverified)
Competitors / Peers
In the OLED panel sector, LG Display directly benchmarks against Samsung Display and BOE. Samsung holds an absolute advantage in small-size OLED smartphone panels, whereas LG focuses on large-size TV OLEDs, and BOE continuously erodes market share in mid-to-large-size LCDs and OLEDs through pricing and scale. In the home appliance sector, Samsung Electronics and Whirlpool are LG Electronics' primary global competitors; Samsung excels in comprehensive vertical integration and chip synergy, while LG seeks differentiation in high-end appliance design and AI experiences. In the EV battery sector, LG Energy Solution competes alongside CATL, Panasonic, and SK On. In 2023, CATL firmly secured first place with approximately 37% global installation volume, LG Energy Solution ranked second with roughly 14%, and SK On and Panasonic closely followed to vie for major North American automaker orders.