LG Display to sell its last LCD plant to CSOT for $1.5 bn

South Korea’s LG Display Co. plans to sell its liquid crystal display (LCD) panel plant in Guangzhou, China, to TCL China Star Optoelectronics Technology Co. (CSOT) for about 2 trillion won ($1.5 billion) to focus on the more profitable small- and mid-sized organic light-emitting diode (OLED) business.

According to its disclosure on Thursday, the Korean display maker has selected CSOT as the preferred bidder for its LCD production affiliate in Guangzhou. The asset for sale is LG Display’s last remaining LCD factory.

CSOT, the world’s second-largest display maker and a subsidiary of state-backed TCL Technology Group, beat BOE Technology Group Co. in the bid by offering a better deal on price and plans to boost the plant’s competitiveness, industry insiders said.

LG Display and CSOT are poised to complete the transaction later this year, according to investment banking sources.

The Guangzhou plant is LG Display’s first overseas production base, launched in 2014. The factory counts leading TV makers such as LG Electronics Inc., Samsung Electronics Co., Japan’s Sony Corp. and big Chinese TV makers among its major clients.

LG Display put the Guangzhou plant on sale more than a year ago after it decided to pull out of the LCD business. It shut down its domestic LCD production business in 2022 as Chinese rivals rapidly expanded their global market share with cheaper panels.

LG Display will use the majority of its proceeds to expand facilities for smaller OLED panels, which are used in smartphones and tablets, according to industry insiders.

LG Display and Samsung Display Co., Korea’s two largest OLED makers, lost ground to their Chinese rivals in the global small- and mid-sized OLED panel market in the first half of this year for the first time in a six-month period. 

The global small-and mid-sized OLED panel market has been a fierce battlefield as the smaller panels are more profitable than larger ones. As LG Display focused on large-sized OLED technology, it lagged behind its global peers in smaller OLEDs.

The display maker will expand its production line of small- and mid-sized 8.6-generation OLED, which features a glass ledger measuring 2,290 millimeters (mm) x 2,620 mm. BOE and Samsung Display have started to expand output of the Gen-8.6 OLED panels as they can be produced at lower prices thanks to higher production efficiency.

Write to Chae-Yeon Kim at why29@hankyung.com
Jihyun Kim edited this article.