LG Display's large LCD panel plant in Guangzhou, China / Courtesy of LG Display
LG Display signed a 2 trillion won ($1.5 billion) deal to sell its entire stake in a large LCD plant in Guangzhou, China, the company said in a regulatory filing, Thursday.
Selling the plant is seen as a crucial step in improving LG Display's asset efficiency, as its LCD business has been largely responsible for the company's accumulated losses. The sale is expected to provide financial flexibility, allowing the company to accelerate its focus on OLED technology.
According to the filing, LG Display will hand over all of its stake in the plant to China Star Optoelectronics Technology (CSOT), a subsidiary of Chinese home appliance giant TCL, on March 31, 2025.
The LCD plant consists of two divisions — panels and modules — each managed by different corporate entities. LG Display holds an 80 percent stake in the panel division, with the remaining 20 percent owned by Guangzhou Development District. LG Display also fully owns the module division.
Originally, LG Display held a 70 percent stake in the panel division but increased it to 80 percent earlier this month by acquiring a 10 percent stake from China's Skyworth for 244 billion won, aiming to expedite the sale.
In the filing, LG Display said it is selling the stake to "improve efficiency to focus on the OLED business." The company noted that the sale would enhance its competitiveness and stabilize its financial position, but added that it is not yet in a position to disclose plans for the 2 trillion won fund raised through the sale.
The sale offers LG Display a chance to rebalance its position in the large LCD market, which has become oversaturated and highly competitive due to the cost advantages of Chinese rivals.
LG Display has been actively scaling down its large LCD business in recent years due to the limited potential for differentiating its products from Chinese competitors, coupled with increasing market volatility in the large LCD sector.
On the other hand, Chinese manufacturers place significant value on the competitiveness of large LCD panels for TVs, which continue to dominate the display market. This put LG Display in urgent need to unload its stake in the plant to focus on more strategic areas.
While reducing its involvement in large LCD businesses, LG Display has been focusing on higher value-added products, such as small- and mid-sized OLED panels for IT devices. This shift allows the company to capitalize on growing demand for premium displays in sectors like smartphones, tablets, and laptops.
Industry officials note that while LG Display currently holds a technological advantage over competitors in the OLED sector, Chinese rivals like BOE are rapidly closing the gap through significant investments. This raises concerns that LG Display might face a similar decline in its OLED business as it did with large LCDs, where Chinese firms gained an edge through aggressive pricing and scale.
Although LG Display has not disclosed specific plans for the use of the funds from the sale, the market anticipates that the money will be directed toward advancing its OLED business and supporting its financial stability.
Meanwhile, LG Display will retain its LCD products for IT devices and automobiles. The company plans to concentrate on high-end products, emphasizing features such as low power consumption, distinctive design, and higher resolutions.
With LG Display's sale of the large LCD plant in Guangzhou, no South Korean company is producing large LCD panels for televisions. LG Display's longtime rival, Samsung Display, had already divested its LCD plant in Suzhou, China, to CSOT in 2020.