Several companies are reportedly conducting due diligence to acquire LG Display’s factory in Guangzhou, China, which produces large-size liquid crystal display (LCD) panels for TVs. Notably, Chinese LCD makers such as BOE and CSOT have expressed their intention to acquire the plant, raising the possibility of a Chinese company taking over LG Display’s Guangzhou plant. If this occurs, South Korea would completely withdraw from the LCD TV market, while China would control more than 70% of it.

LCD TVs currently represent 90% of the global TV market. China’s dominant share in the LCD TV market is expected to lead to increased cost pressure on Korean consumer electronics companies.

LG Display is selling the Guangzhou plant, its last remaining LCD factory./LG Display

Korean display companies are already exiting the LCD market due to low prices from Chinese competitors. Samsung Display sold its Suzhou fab to CSOT in 2020 and exited the LCD business entirely in 2022. LG Display also ceased production of LCD panels for TVs in South Korea in 2022 and is now selling its last remaining LCD factory. According to Omdia, China’s share of the global LCD TV panel market doubled from 31% in 2016 to 67.3% last year, while South Korea’s share decreased from 37.9% to 3.4% over the same period. Excluding China, Taiwan, Japan, and South Korea share the rest of the market.

The South Korean display industry is concerned that China will dominate LCD panel prices in the future. Currently, over 60% of LCD panels in Korean TV products are made in China. An industry insider stated, “There are major sporting events such as the Paris Olympics this year, so prices are expected to rise, but ultimately, Chinese companies that dominate the market control price negotiations.”

In response, Korean companies are reportedly diversifying their suppliers and reducing their dependence on China. Omdia noted, “This year, Samsung Electronics and LG Electronics will reorganize their portfolios by shifting from Chinese suppliers to Korean, Taiwanese, and Japanese suppliers, aiming to regain bargaining power over panel prices.”

However, what’s more concerning for Korean companies is that Chinese companies are also challenging the organic light-emitting diode (OLED) TV panel market with government subsidies. Unlike LCD, which has become a commoditized technology, OLED is an area where Chinese companies have yet to catch up. After leaving the LCD business behind, Samsung Display and LG Display have invested in small and medium-sized OLEDs, with LG Display planning to allocate 30% of its roughly 1.3 trillion won raised through a capital increase to small and medium-sized OLEDs.