On August 1, LG Display announced its selection of China’s CSOT, a subsidiary of TCL Group, as the preferred partner for negotiations to acquire its stake in the Guangzhou LCD production subsidiary. This move underscores LG Display’s strategic pivot from liquid crystal display (LCD) technology to the more profitable organic light-emitting diode (OLED) sector.
LG Display will enter exclusive talks with CSOT, a decision that has caught the attention of industry insiders. Although several Chinese companies, including BOE, expressed interest in the Guangzhou facility, CSOT was chosen for its favorable acquisition terms and commitment to future operational support.
This decision comes in response to the competitive dynamics of the display technology market. LG Display, a leading South Korean electronics manufacturer, has been a significant player in the global LCD market but is now focusing on OLED technology due to declining LCD profitability. Intense competition from Chinese manufacturers like BOE and CSOT has eroded LCD prices and profit margins, prompting LG Display’s strategic shift.
CSOT previously acquired the Suzhou LCD production subsidiary and LCD patents from Samsung Display in 2021, becoming the world’s second-largest LCD panel producer by shipment area. Analysts believe CSOT offered a premium price to secure LG Display’s advanced in-plane switching (IPS) technology.
With the cessation of large LCD panel production at LG Display’s Paju plant in South Korea in late 2022, the company further signaled its focus on OLED technology. This shift is part of a broader strategy to adapt to changing market conditions and enhance profitability. LG Display reduced its deficit significantly in the second quarter of this year, thanks to strong OLED sales, and anticipates turning a profit in the latter half of 2024.
The sale price for the Guangzhou plant is estimated to be between 1 and 2 trillion won (approximately $750 million to $1.5 billion). This transaction not only improves LG Display’s financial standing but also emphasizes the strategic value of advanced display technologies in the competitive global market.
