Home Business Samsung Display gets approval to sell its LCD factory in Suzhou, China

Samsung Display gets approval to sell its LCD factory in Suzhou, China

by Mohit

The Korean government has approved the sale of Samsung Display‘s LCD (Liquid Crystal Display) plant overseas in Suzhou, China. Last year, Samsung Display signed an agreement to sell its Suzhou LCD plant to TCL (CSOT) in China.

According to the report, the Ministry of Trade, Industry, and Energy held the Industrial Technology Protection Committee approved the sale of Samsung Display’s Suzhou LCD factory.

The 8.5G LCD panel manufactured at the Suzhou plant is a national flagship technology. To sell abroad, the government must obtain permission under the Industrial Technology Preservation Act.

The Suzhou plant sale is awaiting final discussion after being reviewed by a qualifying committee early last month. The shift to the next-generation Quantum Dot (QD) display business is expected to accelerate Samsung’s performance with Suzhou’s plant sales approval.

Meanwhile, TCL’s proposal to use the Suzhou plant is likely to be disrupted. TCL initially planned to switch the TV panel production line to IT panels after acquiring the Suzhou plant, but the customer’s request for continuous production of TV panels made it inevitable to modify the plan.

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For TCL, the extension of LCD TV panel production is not good for the product portfolio and profitability also the TV panel profit is lower compared to the IT panel. TCL planned to increase IT panel production at its Suzhou plant and start mass production operation of a new LCD plant T9 from next year.

In August 2020, TCL announced that it was acquiring Samsung Display’s Suzhou LCD plant. As announced at the time, TCL had a 60 percent stake in Samsung Suzhou LCD (SSL) and a 100 percent stake in Suzhou Display (SSM) for $1.08 billion.

When the transaction is completed, the stake structure of Samsung Suzhou LCD will be 70% of TCL affiliate (CSOT) and 30% of Suzhou local government. The company plans to pay out a 100% stake in Suzhou Display and the scale is $341 million dollars.

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