Domestic Production of LCD TV Panels Halted for 2 Years
Large-Scale LCD Business Also Ends... Profitability Strengthened
Restructuring Focused on Large, Small, and Automotive OLEDs
LG Display is selling its TV liquid crystal display (LCD) production plant in Guangzhou, China, to China Star Optoelectronics Technology (CSOT), a subsidiary of the Chinese TCL Group, for 2 trillion won. The company plans to focus more on the organic light-emitting diode (OLED) business to improve profitability.
On the 26th, LG Display announced that it signed a contract to transfer its stake in the Guangzhou large LCD panel and module plant to CSOT after board approval. The sale price is 10.8 billion yuan (approximately 2.03 trillion won), and the scheduled disposal date is March 31 of next year.
After selecting CSOT as the preferred bidder for the Guangzhou LCD plant stake sale in early last month, LG Display engaged in exclusive negotiations over the detailed terms of the stock purchase agreement (SPA). CSOT also acquired Samsung Display’s 8.5-generation LCD plant in Suzhou, China, in 2021.
The Guangzhou large LCD panel plant is a joint venture established with LG Display holding 70% (51% by headquarters and 19% by its Chinese subsidiary), Guangzhou Development District holding 20%, and Skyworth holding 10%. On the 13th, LG Display purchased Skyworth’s stake for 1.3 billion yuan (approximately 243.8 billion won), increasing its stake to 80%. The module plant responsible for post-processing of LCD panel production is 100% owned by LG Display headquarters.
Regarding the purpose of the stake sale, LG Display stated it is "to improve the business structure centered on the OLED business through the sale of the large LCD production corporation’s stake." The company explained that in recent years, the large LCD business, which has limited differentiation potential and high market volatility, has weakened in competitiveness. Therefore, it has been reducing the proportion of the large LCD business and promoting a restructuring focused on OLED. With this sale, LG Display will end its large LCD business following the cessation of domestic LCD TV panel production at the end of 2022.
The company plans to focus more on the OLED business to enhance competitiveness and build a stable profit base. The proceeds from the sale are expected to help strengthen financial stability.
In the large OLED business sector, the strategy is to secure profitability through differentiation, expanding the high-end product lineup, product competitiveness, and cost innovation, thereby solidifying its position in the premium TV market.
In the small and medium OLED business sector, mobile OLED will leverage enhanced production capabilities to increase market share in the high-end segment. IT OLED will continue stable mass production and shipments based on technological leadership. The automotive business aims to increase orders and sales by leveraging differentiated products, technological competitiveness, and strong customer relationships, thereby reinforcing its status as the world’s number one company.
LG Display announced it will continue its high-end LCD business for IT and automotive applications. The company plans to continuously improve profitability by focusing on high-end products with low power consumption, design, and image quality differentiation.
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