TCL Technology’s subsidiary, TCL China Star Optoelectronics Technology (CSOT), has announced its ambitious plan to acquire a significant stake in LG Display’s (LGD) Chinese operations.
This strategic move includes the acquisition of 80% of LG Display (China) Co., Ltd. (LGDCA) and 100% of LG Display (Guangzhou) Co., Ltd. (LGDGZ), at a base price of CNY 10.8 billion ($1.512 billion).
TCL CSOT to Strengthen Its LCD Market Leadership
This acquisition is expected to have a profound impact on TCL’s standing in the global display industry. The 8.5-generation plant in Guangzhou is primarily focused on producing large-sized LCD panels, especially for TV screens. It’s estimated to churn out around 14 million units in 2024, with a significant portion of the production focusing on panels 55 inches and above. By acquiring these assets, TCL CSOT will not only enhance its production capacity but also position itself as a dominant player in the large-sized LCD panel market.
TCL’s market share is set to surge, with CSOT’s share in large-generation LCD production surpassing 20%, making it the second-largest player in the sector globally. By 2026, CSOT’s market share is projected to climb to 23.9%, consolidating its influence alongside industry leader BOE, which currently holds 27%. Combined, these two Chinese manufacturers will control a commanding portion of the global LCD market.
For LG Display, this deal aligns with the company’s broader strategy to transition away from the increasingly saturated LCD market and focus on its more profitable OLED business. OLED technology has emerged as a growth area, particularly in premium display applications, and LGD aims to reinforce its leadership in this segment.
The sale of its Chinese LCD assets provides LG Display with much-needed capital to stabilize its financials, following multiple quarters of losses due to decreasing demand for LCD panels used in electronic devices.
This shift from LCD to OLED represents a strategic refocusing for LG Display, ensuring that it remains competitive in a rapidly evolving market. By shedding its LCD operations, LGD can now dedicate more resources to OLED technology, which is expected to drive future profitability as consumer demand for premium displays continues to rise.
However, this aggressive expansion may come with challenges. Many of LG Display’s South Korean clients overlap with CSOT’s existing customer base, potentially prompting shifts in supply chains as brands like Samsung Electronics and LG Electronics may seek alternative suppliers.
(Via)
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