November 23, 2024

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LG Display's liquid crystal display panel manufacturing plant in Guangzhou, China. (LG Display)

LG Display has started talks to sell off its last liquid crystal display manufacturing plant in China in an apparent move to focus on consolidating its leadership in the more advanced organic light-emitting diode display market.

According to industry sources on Thursday, LG Display is discussing the issue with Korea’s Ministry of Trade, Industry and Energy as a pricey display plant is considered the nation’s strategic asset whose sales should be approved by the government.

In a regulatory filing in March, LG Display said it was reviewing various options on how to make use of its LCD facilities in Guangzhou, China.

“We are currently reviewing various options on the strategic use of our LCD asset, including the manufacturing plant in Guangzhou, but nothing has been decided yet,” the company said.

LG Display, one of the leading display makers here, has been taking measures to reorganize its business portfolio. As part of its efforts, it shut down the less profitable LCD production plants while concentrating its capacity on high-value-added OLED production. The company suspended its LCD production at home in 2022.

China’s biggest display maker BOE Technology and COST, a display arm of Chinese home appliance giant TCL Technology are cited as potential bidders to acquire the LG plant. Multiple financial investors are also said to have submitted their letter of intent for purchase, sources say.

Korea’s top display makers – Samsung and LG – used to dominate the LCD panel market until 2017 but took a strategic shift toward the more advanced OLED amid fierce price competition with Chinese runner-ups.

In 2021, LG's crosstown rival Samsung Display also sold off its LCD panel manufacturing plant in Suzhou, China, to TCL for $1.08 billion.

In the OLED market, Korean companies have maintained their competitive edge for years. According to Korea Display Industry Association Korea took 74.2 percent of the global sales of OLED panels in 2023, while China took 25.1 percent.

When it came to large-size OLED panels mostly for TVs, Korean firms dominated the market taking 96.1 percent of the global sales in the year.

According to Omdia, a market tracker, the global IT OLED market is expected to grow from $2.5 billion in revenue in 2024 to $8.9 billion in 2029, at an annual growth rate of 28.6 percent.

By Jo He-rim (herim@heraldcorp.com)