LG's display arm has agreed to sell its LCD factory so it can focus on producing OLED screens. LG Display is negotiating with a subsidiary of rival TV maker TCL for the sale of its LCD plant in Guangzhou, China, The Korea Times reports.
Negotiations with China Star Optoelectronics Technology (CSOT) are yet to begin, but the deal is expected to earn LG Display between 1 trillion won and 2 trillion won ($737 million to $1.47 billion).
LCD models still make up the majority of the global TV market. But the LCD side of the business has been blamed for holding back LG Display's profits recently. The company has been scaling back its LCD business to focus on higher-value added products like OLED, in which it is a market leader.
LG Display provides OLED panels for companies like Sony, Panasonic, Philips, Loewe and of course LG Electronics for the likes of the LG G4 (pictured). It doesn't just provide OLED panels for TVs, but for smaller devices too, like smartphones and smart watches. In recent years, Apple's iPhones and the iPad Pro have adopted the use of OLED technology for their screens.
The LCD market has seen heated competition lately, with Chinese companies producing ever-cheaper TV models. In 2020, CSOT acquired Samsung Display's LCD plant in Suzhou, China.
LG Display hasn't yet said how it will use the funds of the sale. In an earnings call on 25th July, Chief Financial Officer Kim Sung-hyun said it is currently weighing up its options, and "will share how the proceeds from the sale will be used once the deal is finalised".
Given that China's BOE and Samsung Display have both invested heavily in OLED technologies, it's highly likely that LG Display will do the same. It's thought to be setting up production lines for small- and mid-size 8.6-generation OLED products, which are more efficient than larger OLEDs.
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