27Nov
According to news on November 27, Korean media DealSite reported that Samsung Electronics is promoting the acquisition of LG Display’s (LGD) Guangzhou liquid crystal display (LCD) factory through a Chinese panel manufacturer. Some experts believe that Samsung Electronics’ main TV business is QLED TVs based on LCD panels, and it strives to maintain high-quality LCD panel suppliers.
According to Korean industry insiders on November 23, Samsung Electronics is acquiring LG Display’s LCD factory in Guangzhou, China, through TCL CSOT.
It is reported that LGD Guangzhou Gen 8.5 line is LGD’s first overseas panel factory. Construction started in May 2012 and was put into production on September 1, 2014; LGD, Guangzhou Development Zone (Guangzhou Kaide Technology Development Co., Ltd.) and Skyworth worked together on a 70:20 basis: 10 equity ratio to invest in construction, the total project investment reaches 4 billion US dollars (approximately 29.2 billion yuan); when full production, the monthly glass substrate production capacity can reach 120,000 pieces. In early 2023, the line's capacity utilization dropped to about 50%.
Recently, media reported that Skyworth’s plan to acquire LG Display’s Guangzhou LCD factory failed. The report pointed out that the negotiations between the two companies progressed to the discussion of specific operating methods, but they failed to reach an agreement due to differences in opinions on price.
After the acquisition by Skyworth failed, TCL Huaxing is currently most interested in acquiring the Guangzhou LCD factory. In particular, TCL CSOT is a related company in which Samsung Display holds 10.38% of the shares. The market believes that Samsung Display will serve as a partner of TCL CSOT and support the acquisition of Samsung Electronics.
According to analysis, the biggest reason for Samsung Electronics' acquisition is to stabilize and secure high-quality LCD panel suppliers. Although Samsung Electronics is promoting TV products equipped with OLED, MicroLED, etc., its TV business is still QLED TV based on LCD panels. However, most of the LCD panels currently rely on China. From Samsung Electronics' standpoint, if TCL CSOT acquires LG Display's Guangzhou LCD factory, it will be able to successfully obtain competitive products in terms of price and quality.
It is understood that LG Display also proposed the conditions of providing technical assistance to the acquiring company within 2 to 3 years after selling the Guangzhou LCD factory, while ensuring production capacity and customers.
Since Samsung Display has withdrawn from the LCD business, LGD's Guangzhou factory has become the only LCD manufacturing factory in the Korean display industry.
Both Samsung Electronics and LG Electronics are launching next-generation products such as OLED TVs and Micro LED TVs. However, amid sluggish consumption, LCDs are still indispensable. Currently, LCDs have become the dominant supply of Chinese display companies such as BOE and TCL CSOT. situation. Without LGD's Guangzhou LCD factory, South Korea would have to rely entirely on Chinese LCD technology. Therefore, there is still great uncertainty in this acquisition. And recently, LGD said that LCD orders are increasing.
However, LGD also emphasized that the direction of "reduce LCD and expand OLED" has not changed, so now may be the best time to sell.Source: DealSite
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