LG Display has completed the sale of its LCD production facility in Guangzhou, China, to TCL CSOT for 2.25 trillion won (US$1.7 billion), as confirmed in a filing with South Korea’s Financial Supervisory Service.

The agreement, signed in September 2023, includes both panel and module plants.

This transaction marks LG Display’s exit from the large-size LCD market, which is increasingly dominated by Chinese manufacturers. TCL CSOT, a subsidiary of TCL Technology, is a major producer of display panels for TVs and mobile devices. This acquisition strengthens its manufacturing presence in China.

The Guangzhou facility had been a key overseas base for LG Display but faced declining profitability due to intense price competition and oversupply. LG Display is now shifting its focus to high-end OLED and automotive displays as part of its long-term strategy.

🔗 Source: Jiemian

🧠 Food for thought

1️⃣ China’s strategic dominance in global display manufacturing

TCL’s acquisition of LG Display’s Guangzhou plant is part of a larger pattern of Chinese companies consolidating control of the LCD market.

With this acquisition, Chinese manufacturers now control over 70% of global production capacity for advanced LCD panels, with the top three Chinese players (BOE, TCL, HKC) commanding a 66% market share 1.

This dominance has been strategically built through aggressive capacity expansion and substantial government subsidies. BOE alone received an estimated $3.9 billion in government support between 2010 and 2021 2.

The shift mirrors previous industry transformations, as manufacturing leadership has moved from Japanese companies to Korean firms in the early 2000s, and now increasingly to Chinese manufacturers 3.

Chinese companies are also increasing their innovation capabilities, with firms like BOE and TCL winning recognition for display technology advancements while leading in capital expenditure. They are projected to account for 85% of global display industry CapEx by 2027 2.

2️⃣ Strategic pivot from LCD to OLED reflects broader industry trends

LG Display’s sale represents a complete exit from the large-sized LCD business to focus on higher-margin OLED technology, aligning with industry-wide shifts toward next-generation display technologies 4.

The company’s pivot toward automotive displays is particularly strategic, targeting a market projected to exceed $10 billion in 2024, with LG Display already holding over 50% share of the automotive OLED market for displays 10 inches or larger 5.

This transformation reflects the broader display industry’s evolution over its 50-year history, which has seen multiple technology transitions from CRTs to various flat-panel technologies, with each shift creating new market leaders 3.

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