LG Display (LPL)

We will have significant capital requirements in connection with our business strategy and if capital resources are not available we may not be able to implement our strategy and future plans.

In connection with our strategy to expand the diversity and capacity of our TFT-LCD production, we estimate that we will incur significant capital expenditures for the expansion of existing production lines in Gumi, Korea, construction of new facilities and strategic investments, such as the construction of a new low-temperature poly-silicon, or LTPS, TFT-LCD production facility in Paju, Korea, and the development of production lines for OLED in Paju, Korea.

We estimate that our total capital expenditures for the construction of the new LTPS TFT-LCD production facility and for the development of production lines for OLED on a delivery basis, or capital expenditures accounted for at the time of delivery of property, plant and equipment, will amount to approximately (Won)577 billion and (Won)92 billion, respectively. In 2009, we expect that our total capital expenditures on a delivery basis will amount to approximately (Won)2.5 trillion and that our cash outflows for capital expenditures will amount to approximately (Won)4.0 trillion. Such amounts are subject to periodic assessment, and we cannot provide any assurance that such amounts may not change materially after assessment.

These capital expenditures will be made well in advance of any additional sales that will be generated from these expenditures. However, in the event of adverse market conditions, or if our actual expenditures far exceed our planned expenditures, our external financing activities combined with our internal sources of liquidity may not be sufficient to effect our current and future operational plans, and we may decide not to expand the capacity of certain of our facilities or to continue the construction of the new LTPS TFT-LCD production facility or the development of production lines for OLED as scheduled or at all. Our ability to obtain additional financing will depend upon several factors outside our control, including general economic, financial, competitive, regulatory and other considerations.

Global credit markets have been experiencing difficulties and volatility since the second half of 2008. The market uncertainty that started from the U.S. residential market further expanded to other markets such as those for leveraged finance, collateralized debt obligations and other structured products. These developments have resulted in significant contraction, de-leveraging and reduced liquidity in the global credit markets, as well as bankruptcy or acquisition of, and government assistance to, several major U.S. and European financial institutions, including the bankruptcy filing of Lehman Brothers Holdings Inc. in September 2008. In response to such developments, legislators and financial regulators in the United States and other jurisdictions, including Korea, have implemented a number of policy measures designed to add stability to financial markets. However, the overall impact of these and other measures is uncertain, and they may not have the intended stabilizing effects. The U.S. Securities and Exchange Commission, other regulators, self-regulatory organizations and exchanges are authorized to take extraordinary actions in the event of market emergencies, and may effect changes in law or interpretations of existing laws.

We are exposed to risks related to changes in the global and Korean economic environments, changes in interest rates and instability in the global financial markets. As liquidity and credit concerns and volatility in the global financial markets increased significantly, the value of the Korean Won relative to the U.S. dollar has depreciated at an accelerated rate. See “Item 3.A. Selected Financial Data—Exchange Rates.” Furthermore, as a result of adverse global and Korean economic conditions, there has been a significant overall decline and continuing volatility in securities prices of Korean companies, including ours, which may result in trading and valuation losses on our trading and investment securities portfolio. The Korea Stock Price Index declined from 1,888.88 on May 16, 2008 to 938.75 on October 24, 2008. The Korea Stock Price Index was 1,400 on June 22, 2009. In addition, recent increases in credit spreads, as well as limitations on the availability of credit resulting from heightened concerns about the stability of the markets generally and the strength of counterparties specifically have led many lenders and institutional investors to reduce or cease providing funding to borrowers, which may negatively impact our liquidity and results of operation. Major market disruptions and the current adverse changes in market conditions and regulatory climate may further impair our ability to meet our desired funding needs. We cannot predict how long the current market conditions will last. These recent and developing economic and governmental factors may have a material adverse effect on our business and the ability to meet the funding needs of us and our customers, as well as negatively affect our credit rating.

The failure to obtain sufficient financing on commercially reasonable terms to complete our expansion plans could delay or derail our ability to pursue our business strategy, which could materially and adversely affect our business and results of operations.

We will have significant capital requirements in connection with our business strategy and if capital resources are not available we may not be able to implement our strategy and future plans.

In connection with our strategy to expand the diversity and capacity of our TFT-LCD production, we estimate that we will incur significant expenditures for the expansion of existing production lines, construction of new facilities and strategic investments, such as the development of our Paju Display Cluster.

In Paju, we built our seventh fabrication facility, or P7, in 2005 and commenced mass production at P7 in January 2006. P7 reached an initial design capacity of 90,000 input sheets of glass substrate per month in April 2007 and an expanded average capacity of 136,000 input sheets of glass substrate per month during the fourth quarter of 2007. The total cost of the construction and build-out of P7 was approximately (Won)5.0 trillion. Our total capital expenditure for 2007 on a delivery basis, or capital expenditures accounted for at the time of delivery of property, plant and equipment, was approximately (Won)1.0 trillion (US$1.1 billion), of which approximately (Won)0.2 trillion was attributable to capital expenditure for P7. In addition, we built a new module production plant in Wroclaw, Poland, which commenced mass production in March 2007 and reached an initial production capacity of 3 million modules per year in July 2007. In December 2007, we also commenced mass production at a new module production plant in Guangzhou, China, our second such module production site in China. We are currently constructing our eighth fabrication facility, or P8, in our Paju Display Cluster. We expect our capital expenditures for construction of P8 on a delivery basis to be approximately (Won)2.0 trillion in 2008. Such amount is subject to periodic assessment, and we cannot provide any assurance that such amount may not change materially after assessment.

We estimate our total capital expenditures on a delivery basis to be approximately (Won)3.0 trillion and our cash outflows for capital expenditures to be approximately (Won)2.5 trillion in 2008. We estimate our capital expenditure for research on, and development of production lines for, OLED, on a delivery basis to be approximately (Won)11.1 billion in 2008. These capital expenditures will be made well in advance of any additional sales that will be generated from these expenditures. However, in the event of adverse market conditions, or if our actual expenditures far exceed our planned expenditures, our external financing activities combined with our internal sources of liquidity may not be sufficient to effect our current and future operational plans, and we may decide not to expand the capacity of certain of our facilities or to continue construction of P8. Our ability to obtain additional financing will depend upon several factors outside of our control, including general economic, financial, competitive, regulatory and other considerations.

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The failure to obtain sufficient financing on commercially reasonable terms to complete our expansion plans could delay or derail our ability to pursue our business strategy, which could materially and adversely affect our business and results of operations.

We will have significant capital requirements in connection with our business strategy and if capital resources are not available we may not be able to implement our strategy and future plans.

In connection with our strategy to expand the diversity and capacity of our TFT-LCD production, we estimate that we will incur significant expenditures for the expansion of existing production lines, construction of new facilities and strategic investments, such as the development of our Paju Display Cluster, construction of a new module production plant in Guangzhou, China and equipping of our new module production plant in Wroclaw, Poland.

In Paju, we built our seventh fabrication facility, or P7, in 2005. We commenced mass production at P7 in January 2006. During the fourth quarter of 2006, the average production capacity of P7 was 78,000 input glass sheets per month. P7 is expected to reach an initial design capacity of 90,000 input glass sheets per month in the first half of 2007 and an expanded capacity of 110,000 input glass sheets per month in the third quarter of 2007. We currently estimate that the construction and build-out of P7, at an expanded capacity of 110,000 input glass sheets per month, will cost approximately (Won)5.3 trillion in total. Our total capital expenditure for 2006 on a delivery basis, or capital expenditures accounted for at the time of delivery of property, plant and equipment, was approximately (Won)2.8 trillion (US$3.0 billion), of which approximately (Won)1.2 trillion was attributable to capital expenditure for P7. We expect our capital expenditures for P7 on a delivery basis to be approximately (Won)0.2 trillion in 2007. In addition, we are currently constructing our eighth fabrication facility, or P8, in our Paju Display Cluster and we also broke ground on the new module production plant in Wroclaw, Poland in June 2006, which commenced mass production in March 2007. The Polish plant is expected to reach an initial production capacity of 3 million modules per year by the end of 2007. Currently, we are also constructing our new module production plant in Guangzhou, China. In May 2006, we entered into an investment agreement with the Guangzhou Development District Administrative Committee to construct a module production plant in Guangzhou, a city in southern China, and established our subsidiary, LG.Philips LCD Guangzhou Co., Ltd., in June 2006. We expect our capital expenditures for construction of new production facilities on a delivery basis to be approximately (Won)0.6 trillion in 2007. Such amount is subject to periodic assessment, and we cannot provide any assurance that such amount may not change materially after assessment.

We estimate our total capital expenditures on a delivery basis to be approximately (Won)1.0 trillion and our cash outflows for capital expenditures to be approximately (Won)1.7 trillion in 2007. These capital expenditures will be made well in advance of any additional sales that will be generated from these expenditures. However, in the event of adverse market conditions, or if our actual expenditures far exceed our planned expenditures, our external financing activities combined with our internal sources of liquidity may not be sufficient to effect our current and future operational plans, and we may decide not to expand the capacity of certain of our facilities, including P7, or to continue construction of P8 or our Guangzhou plant or equipping of our Polish plant.

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Table of Contents

The failure to obtain sufficient financing on commercially reasonable terms to complete our expansion plans could delay or derail our ability to pursue our business strategy, which could materially and adversely affect our business and results of operations.

We will have significant capital requirements in connection with our business strategy and if capital resources are not available we may not be able to implement our strategy and future plans.

In connection with our strategy to expand the diversity and capacity of our TFT-LCD production, we estimate that we will incur significant expenditures for the expansion of existing production lines, construction of new facilities and strategic investments, such as the development of our Paju Display Cluster and construction of a new module production plant in Wroclaw, Poland.

In Paju, we built our seventh fabrication facility, or P7, in 2005. We commenced mass production at P7 in January 2006. By the second quarter of 2006, we expect that P7 will reach a production capacity of 45,000 glass sheets per month. By the end of 2006, P7 is expected to reach its initial design capacity of 90,000 input sheets per month. We currently estimate that the construction and build-out of P7, at a capacity of 90,000 sheets per month, will cost approximately (Won)5.3 trillion in total. Our total capital expenditure for 2005 was approximately (Won)4.4 trillion (US$4.4 billion), of which approximately (Won)3.2 trillion was attributable to capital expenditure for P7. We expect our capital expenditures for P7 to be approximately (Won)1.8 trillion in 2006. In addition, we are currently in the preliminary stage of constructing our eighth fabrication facility, or P8, in our Paju Display Cluster. Our estimated total capital expenditure for P8 remains undecided as we continue to evaluate appropriate production capacity targets for P8. We expect P8’s initial production capacity will depend on future growth trends in the TFT-LCD panel market. We also broke ground on the new module production plant in Wroclaw, Poland in June 2006. We expect production at the Polish plant to commence in the first half of 2007 at an initial production capacity of 3 million modules per year. We plan to invest a total of €429 million in the plant by 2011, at which time it is scheduled to reach its design capacity of 11 million units per year. We are currently expanding our module production plants in Nanjing, China. In May 2006, we also entered into an investment agreement with the Guangzhou Development District Administrative Committee to construct a module production plant in Guangzhou, a city in southern China.

We estimate our total capital expenditures will be approximately (Won)4.2 trillion in 2006. These capital expenditures will be made well in advance of any additional sales that will be generated from these expenditures. However, in the event of adverse market conditions, or if our actual expenditures far exceed our planned expenditures, our external financing activities combined with our internal sources of liquidity may not be sufficient to effect our current and future operational plans, and we may decide not to expand the capacity of certain of our facilities, including P7, or to continue construction of P8 and the Polish plant.

The failure to obtain sufficient financing on commercially reasonable terms to complete our expansion plans could delay or derail our ability to pursue our business strategy, which could materially and adversely affect our business and results of operations.

We will have significant capital requirements in connection with our business strategy and if capital resources are not available we may not be able to implement our strategy and future plans.

In connection with our strategy to expand the diversity and capacity of our TFT-LCD production, we estimate that we will incur significant expenditures for the expansion of existing production lines, construction of new facilities and strategic investments, such as the development of the Paju industrial complex where we are building our seventh fabrication facility, or P7. P7 has an initial design capacity of 45,000 sheets per month (Phase I) although we may expand its manufacturing capacity by an additional 45,000 sheets per month (Phase II) depending on future market and other conditions. We currently estimate that the construction and build-out of P7, at a capacity of 90,000 sheets per month, will cost approximately (Won)5.3 trillion. We expect our capital expenditure for P7 to be approximately (Won)3.1 trillion in 2005. These capital expenditures will be made well in advance of any additional sales that will be generated from these expenditures. However, in the event of adverse market conditions, or if our actual expenditures far exceed our planned expenditures, our external financing activities combined with our internal sources of liquidity may not be sufficient to effect our current and future operational plans, and we may decide not to expand the capacity of certain of our facilities, including P7.

The failure to obtain sufficient financing on commercially reasonable terms to complete our expansion plans could delay or derail our ability to pursue our business strategy, which could materially and adversely affect our business and results of operations.