South Korean government begins to consider Samsung Display's sale of Suzhou's 8.5-generation LCD factory

by:Kimeery     2021-05-26

The South Korean government has started to review a case involving Samsung Display’s sale of its 8.5-generation LCD factory in Suzhou, China. If the 8.5-generation LCD technology used in the Suzhou plant is designated as the national core technology, it must be approved by the government when it is sold. It can be seen that because the background of this sale is that China has taken the lead in the large-size LCD market, South Korea's business transformation to a new generation of display technology appears more urgent.

Samsung Display Suzhou LCD factory panorama

According to the Korean media ETNews report, according to the news of the industry on November 11, the Ministry of Trade, Industry and Energy recently A special committee was convened to start studying and approving the sale of Samsung’s LCD factory in Suzhou, China. A committee composed of experts from the display industry held its first meeting at the end of last month. The committee members expect that in the future, they will pass many meetings to comprehensively evaluate the impact of the sale of the Suzhou factory on national security and domestic industries, and finally decide whether to approve it.

After signing the sale contract in August, the South Korean government started its deliberations only three months later. At the end of August, Samsung Display signed an agreement with China’s TCL Huaxing to sell 60% of its Suzhou plant for US$1.08 billion. TCL Huaxing, which holds a 10% stake in the Suzhou plant, intends to enhance the competitiveness of its large-size LCD business, while Samsung Display is to achieve a business structure transformation to high value-added products, and the two parties have successfully signed a contract.

Although this is a contract with unanimous interests, the sale of the Suzhou plant still needs to be approved by the Korean government before it can be finally implemented. Because the design, process, manufacturing (excluding module process technology), and drive technology of TFT-LCD panels above 8G (2200×2500mm) are designated as South Korea’s national core technologies, the 8.5-generation Suzhou plant is also included in the subject of approval .

China has even mass-produced the 10.5 generation LCD. The largest in South Korea is the 8.5 generation. The generation number refers to the algebra of the substrate size. The larger the number, the larger the display screen that can be produced, and the more competitive it is. In the production of 65-inch LCD panels, 3 pieces can be produced in the 8.5 generation, but 8 pieces can be produced in the 10.5 generation.

In addition, the global large-size LCD market has been dominated by China, with BOE and TCL Huaxing ranking first and second. Therefore, Samsung Display’s proposal to sell its LCD factory in Suzhou is more likely to be approved unless there are special variables.

The yield improvement and mass production capacity of the Korean display industry's competitiveness, as well as technologies and patents related to organic light-emitting diodes (LCD for Samsung), require protection measures or be excluded from sales In addition, it may become a point of dispute.

In 2017, when LG Display established an LCD for Samsung factory in Guangzhou, China, it had conducted national core technology approvals in the display field. Along with 8th generation and above LCD, LCD for Samsung has also been designated as a national core technology and requires a government license. LG Display took 6 months from applying in July 2017 to being approved in January 2018. The analysis believes that while China's display industry is developing rapidly, in order to help the Korean industry quickly transition to new generation technologies such as OLED and quantum dots (QD), this is a critical moment for the government to provide support. (CINNO)

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