LG Display sells LCD factory for US$1.54 billion and focuses on OLED

A LG Displaythe South Korean giant’s monitor and TV manufacturing arm, announced the sale of its LCD factory in Chinasignaling a significant strategic shift towards OLED technology.

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Transaction valued at US$1.54 billion

The transaction, valued at impressive 1.54 billion dollarsmarks the end of an era for the company in the LCD segment and reaffirms its commitment to more advanced display technologies.

According to information released by ReutersLG Display is divesting its majority stake in the Guangzhou facility, transferring it to CSOT, a subsidiary of TCL. The agreement covers not only 80% of the LCD panel factory, but also the entire LCD module assembly plant.

This strategic decision reflects the drastic changes in the display market in recent years. What was once a profitable business to replace traditional CRT monitors has now become a financial burden for companies like LG and Samsung. The drop in demand for LCD panels, especially in the consumer electronics sector, has put significant pressure on these companies’ profit margins.

OLED is the future

LG Display sees much greater long-term potential in OLED technology. OLED panels are increasingly used in premium displays, ranging from smartphones to large televisions, laptops and PC monitors. With this sale, the company plans to concentrate its resources and expertise in this higher value-added segment.

It is important to note that despite the sale of the LCD factory, LG Display will maintain its production of large OLED panels in China. This indicates that the company is not completely abandoning its operations in the country, but rather realigning its focus towards more promising technologies.

Proceeds from this sale, which is expected to be completed by March 2025, will be directed to strengthening LG Display’s OLED operations and improving its financial stability. This move is crucial for the company to maintain its competitiveness against rivals such as Samsung Display and TCL CSOT itself.

LG is not going through a good financial moment

In recent years, LG Display has faced a series of quarterly losses, largely attributed to falling demand for LCD panels. The migration of large customers, such as Applefor alternative suppliers or different technologies, has been an aggravating factor in this scenario.

The sale of the Guangzhou factory is seen by analysts as a vital strategic step for LG Display’s financial health. With this move, the company not only frees itself from a declining business segment, but also obtains significant capital to invest in areas of future growth.

As demand for OLED technology continues to grow, especially in large applications, LG Display is positioned to reinforce its leadership in this space. The investment of 1.54 billion dollars from this sale could be crucial to expanding OLED production capacity and developing new technologies in this field.