Skyworth’s plan to acquire LG Display’s Guangzhou factory failed miserably

According to news from this site, in August this year, it was reported that LG Display had reached an agreement with Skyworth on the sale of the liquid crystal display (LCD) factory in Guangzhou, China. Since Skyworth is a shareholder of LG Display’s 8.5-generation production line in Guangzhou, it enjoys the right of priority to acquire or hold shares

According to reports from Jiwei.com, industry insiders revealed yesterday that Skyworth had intended to acquire LG Display’s Guangzhou plant. Factory and conducted specific negotiations, but ultimately failed. Negotiations between the two companies have progressed to the stage of discussing specific operating methods. However, due to differences of opinion between the two parties on price, they were ultimately unable to reach an agreement.

Several industry insiders said, "Skyworth has expressed There is an intention to acquire LGD’s Guangzhou factory, but it is understood that no agreement has been reached yet.”

LG Display (LGD for short) is one of South Korea’s two largest displays One of the panel companies. LGD Guangzhou Gen 8.5 line is LGD's first overseas panel factory. Construction started in May 2012 and went into production on September 1, 2014; it is jointly managed by LGD, Guangzhou Development Zone (Guangzhou Kaide Technology Development Co., Ltd.) and Skyworth on a 70:20:10 basis. The total investment in the project will reach US$4 billion (note on this site: currently about 29.2 billion yuan); at full production, the monthly glass substrate production capacity will reach 120,000 pieces.

In early 2023, the line's capacity utilization dropped to about 50%. Coupled with the continued deterioration of LGD's performance, Q1 sales this year were 4.4 trillion won, a 31.84% decrease from the same period last year, and operating losses were 1.1 trillion won (5.69 billion yuan). The results were below market estimates of 5.5 trillion won in sales and 1.3 trillion won in operating losses. It is reported that LGD has not made a profit for 4 consecutive quarters. In addition, the sales proportion of each product in Q1 was 19% for TV panels, 38% for IT panels, 32% for mobile panels and other products, and 11% for automotive panels.

LGD said at the first quarter performance briefing: "This year, the eighth-generation LCD factory in Guangzhou, China has been reduced to 50% of the scale and has begun operations. The seventh-generation LCD factory in South Korea is actively advancing Equipment is sold, and we are studying the use conversion, sale and strategic partnerships of other factories to maximize benefits."

LGD is actually transforming into an OLED business. The company stopped producing TV LCD panels at its Paju factory (P7) in South Korea at the end of last year, leaving only its LCD factory in Guangzhou, China.

Since Samsung Display has also withdrawn from the LCD business, LGD Guangzhou factory has become the only LCD manufacturing factory in the Korean display industry.

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