On Thursday, LG Display confirmed it has finalized a deal valued at 2 trillion won ($1.5 billion) to sell its full stake in a large liquid crystal display (LCD) facility located in Guangzhou, China.
The buyer is TCL’s LCD unit, China Star Optoelectronics Technology (CSOT), which will acquire LG Display’s 80% stake in the LCD panel production line and 100% of the LCD module factory for 10.8 billion yuan ($1.54 billion).
This deal is expected to enhance asset efficiency, as the company’s LCD sector has contributed to its ongoing financial losses. The sale is anticipated to grant the company greater financial flexibility, enabling it to accelerate its focus on developing OLED technology. The completion of the sale is projected for March 2025.
According to the filing, LG Display will transfer its entire stake in the Guangzhou plant to China Star Optoelectronics Technology (CSOT), a subsidiary of TCL, on March 31, 2025. The plant operates two divisions: panels and modules, with LG Display owning an 80% stake in the panel division and full ownership of the module division. LG Display recently increased its stake in the panel division from 70% to 80% by acquiring an additional 10% from Skyworth for 244 billion won to expedite the sale.
LG Display plans to enhance its display efficiency and concentrate on its OLED operations, where the company sees greater competitiveness compared to the saturated LCD market. While LG Display aims to strengthen its financial stability through this transaction, it has not disclosed specific plans for the 2 trillion won raised from the sale.
LG Display has been reducing its involvement in large LCD production due to limited differentiation opportunities in a market dominated by Chinese manufacturers. Chinese firms continue to prioritize large LCD panels for TVs, which hold a large share of the display market. This competitive landscape has prompted LG Display to divest its stake in the plant, allowing it to redirect its focus toward more strategic areas.
Industry experts highlight that while LG Display currently has a technological edge in the OLED sector, Chinese competitors like BOE are rapidly narrowing this advantage through substantial investments.
This situation raises concerns that LG Display could experience a decline in its OLED business, similar to what it faced with large LCDs, where aggressive pricing and scale allowed Chinese firms to dominate.
Although LG Display has not specified how it will utilize the funds from the sale, the market expects that the capital will be directed toward enhancing its OLED operations and strengthening financial stability.
The company will continue manufacturing LCD products for IT devices and automobiles while focusing on high-end offerings characterized by low power consumption, unique design, and higher resolutions. With this sale, no South Korean company will produce large LCD panels for televisions, following Samsung Display’s divestment of its LCD plant in Suzhou to CSOT in 2020.
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