LG Electronics Inc., a South Korean tech firm, may scrap a plan to develop a smartphone with a rollable display, industry observers here said Monday, amid growing speculation that the South Korean tech giant will ditch its money-losing mobile business.

LG reportedly told its parts suppliers, including Chinese display maker BOE, to put the rollable smartphone development project on hold, according to industry sources. The parts makers may request compensation from LG in the future for their development efforts, they added.

A LG official said nothing can be confirmed at this point regarding the company's plan for a rollable smartphone.

LG last month announced that its mobile business unit is open to "all possibilities" for its future operations amid rumors that the company may sell the struggling mobile business.

Then the company said the development of the rollable smartphone is still in progress, but it has not revealed its future plans in detail.

LG's mobile business has been in the red since the second quarter of 2015. Its accumulated operating loss reached nearly 5 trillion won ($4.5 billion) last year.

Analysts said LG will either shut down or sell its mobile business, or at least scale it back.

At its event for the all-digital Consumer Electronics Show 2021, LG teased its rollable smartphone with a short video clip.

Named "LG Rollable," the device was highlighted by a resizable screen with a side-rolling display.

The rollable smartphone was LG's second product under the Explorer Project, the company's new mobile category announced last year that aims to deliver devices with a different form factor and upgraded mobile experience. The Wing, a rotating dual-screen smartphone, was the first one to be developed under the Explorer Project.

Industry observers speculated that the pace of LG's rollable smartphone development could have been more sluggish than expected and that the company may have felt pressure delivering successful results with the product in the market.

According to market researcher Counterpoint Research, LG shipped 24.7 million smartphones last year, down 13 percent from a year earlier, and was the ninth-largest smartphone vendor with a global market share of 2 percent. (Yonhap)