South Korean company LG Display today announced the sale of its stake in a large liquid crystal display manufacturing plant in Guangzhou, China. The buyer will be the LCD division of the Chinese company TCL CSOT, which is one of the ten largest global manufacturers of display panels. The deal is valued at 10.8 billion yuan (1.54 billion US dollars).
Image source: LG Display
The terms of the deal provide for LG Display to transfer its 80 percent stake in a large LCD panel plant and 100 percent stake in an LCD module plant by March 2025. The move is needed to focus efforts on developing OLED display panels, where LG Display says the company is more competitive than in the saturated LCD display market.
«We plan to focus more on the OLED business to enhance the competitiveness of our business and create a stable profit base. In addition, we expect that the proceeds from the sale (of the plant) will help strengthen our financial stability,” LG Display said in a statement.
Once the deal is completed, LG Display will no longer produce LCD panels in China, but will continue to produce high-margin, large-size OLED panels there. Analysts believe the deal will improve LG Display’s financial position after the company reported losses for several quarters last year due to weak demand.