The Korean government will start a review! Ningbo Shanshan's acquisition of LG Chem's LCD polarizer business may encounter obstacles

South Korea’s LG Chem said in June that it had reached a deal with Ningbo Shanshan Co., Ltd. (11.270, 0.39, 3.58%) and will sell most of the company’s LCD polarizer business for US$1.1 billion.

Sources said on Monday that LG Chem’s sales plan may face obstacles, because if the South Korean government defines this technology as a national core technology, it will be difficult to sell abroad.

According to the Korea Times, a source said that the Ministry of Trade, Industry and Energy of South Korea will hold a meeting this week to decide whether the LCD polarizer technology is compatible with the eighth or higher generation TFT (thin film transistor) liquid crystal Display manufacturing technology is associated. TFT is currently designated as a national core technology by South Korea.

(LG Chem Nanjing plant/provided by LG Chem)

If the Korean Ministry of Trade recognizes that the LCD polarizer technology is part of the 8th generation LCD panel technology and designates it as a country Core technology, then LG Chem must obtain the government’s permission before proceeding with the transaction.

However, some industry officials believe that LCD polarizer technology is widely used by many companies in other countries, so it is unlikely that this technology will be listed as a national core technology.

It is worth mentioning that when LG Chem announced an agreement with Ningbo Shanshan, South Korean industry analysts were optimistic, because the focus of the local display industry was shifting from LCD to LCD for Samsung.

At the same time, LG Chem also stated that the company's decision to sell the LCD polarizer business is to focus on the OLED business, which will become LG's future growth engine. In addition, the company's proceeds from the sale will be used for automotive materials and electric vehicle battery business.

Therefore, if the South Korean government decides not to allow LG to sell its LCD polarizer business, the company's investment plans in electric vehicle batteries and LCD for Samsung polarizer business may face setbacks.

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