Under the leadership of CEO Jeong Cheol-dong, LG Display has successfully finalized the sale of its Guangzhou liquid crystal display (LCD) plant in China, bolstering its cash reserves by approximately 2 trillion won (about $1.53 billion). This marks a significant step forward, allowing the company to intensify its focus on organic light-emitting diode (OLED) technology, positioning it to compete with industry heavyweights like Samsung and Chinese manufacturers directly.
LG Display announced on Sept. 26 that it had signed an agreement to transfer its stake in the Guangzhou LCD panel and module factory to TCL CSOT, a subsidiary of China’s TCL Group, following approval from its board of directors. The transaction, valued at 10.8 billion yuan (2 trillion won), is set to be completed by March 31 of next year.
The Guangzhou LCD facility has been a longstanding challenge for LG Display. Since 2016, Chinese companies have aggressively expanded their LCD investments, forcing South Korean players like LG to scale back their presence in the market. Samsung Electronics, for instance, ceased its investments in Japan’s Sharp and took a stake in TCL’s 11th-generation facilities, effectively signaling its exit from the LCD sector. Following the full-scale operation of TCL’s 10th-generation plant in 2018, Samsung began winding down its LCD business.
In contrast, LG Display hesitated. At the time, then-Vice Chairman Han Sang-beom remained confident in competing with Chinese 10th-generation LCD plants, although analysts were already predicting China’s eventual dominance in the LCD market. That prediction has since materialized, with Chinese and Taiwanese companies controlling more than 70% of the global market as of last year.
While Jeong Ho-young, Jeong Cheol-dong’s predecessor, concentrated on cost-cutting and workforce reductions, Jeong Cheol-dong has aimed at a broader business transformation. “It’s challenging to forgo the profits from the LCD business and fully commit to the still-uncertain OLED market,” an industry insider noted. “However, LG Display is now fully dedicated to OLED.”
The sale of the Guangzhou plant was not without its difficulties. Initially estimated at around 1 trillion won, the final price rose to 2 trillion won following a bidding war between BOE Technology Group and TCL CSOT. Even in the final stages, disputes over pricing persisted, but LG Display ultimately secured its target figure.
Despite this milestone, LG Display’s greater challenge lies ahead. With its full commitment to OLED, the company now faces the task of improving profitability in its OLED operations. Its large-scale OLED division, which has received substantial investment for over a decade, continues to struggle with profitability, while in the smaller mobile OLED market, Samsung Display remains a formidable competitor.
In the growing IT OLED market, both Samsung Display and BOE are investing trillions in 8.6-generation OLED plants, whereas LG Display lacks the financial strength for comparable investments. The company has yet to announce any plans for an 8.6-generation OLED facility and has clarified that the proceeds from the Guangzhou sale will not be directed toward this effort.
