The South Korean government postpones the approval of the sale of Samsung's Suzhou LCD production line, or will be delayed

by:Kimeery     2021-05-30

The news that Samsung sold the 8.5-generation line in Suzhou has been rumored for a long time, and the negotiation of cooperation with the acquirer has been basically determined. However, recent news reported that affected by the epidemic, the South Korean government has postponed the approval of 'TCL Technology's acquisition of Samsung's 8.5-generation line in Suzhou

It is reported that the LCD panel design, process, manufacturing and driving technology used in Samsung's Suzhou 8.5-generation line have been designated as South Korea’s national core technology and need to be approved by a special committee. In October, a committee composed of experts in the display industry had already held a meeting to evaluate the impact of the sale of Samsung’s Suzhou Gen 8.5 line on South Korea’s national security and South Korea’s industry.

According to the plan, the special committee will hold several meetings before deciding whether to approve the acquisition of Samsung Suzhou's 8.5-generation line by TCL Technology. However, due to the impact of the South Korean epidemic, the evaluation meeting of the special committee cannot be held for the time being, which means that the South Korean government will delay the approval time.

In fact, for a long time, the price of LCD panels has been dropping continuously, and head panel companies are facing weak profits or even losses. Coupled with the strong rise of the panel market in mainland China, the cost performance is very high, further impacting Japanese and Korean head panel brands, especially Samsung and LGD.

Under the influence of this general environment, Samsung and LGD have reduced or suspended production in response to the LCD panel market, which is constantly falling prices, in order to reduce losses. Not only that, Japanese LCD panel companies have also announced the cessation of LCD panel production.

In March this year, the market research organization CINNO Research released a report saying that due to the impact of the new crown pneumonia epidemic, SDC (Samsung Display) is accelerating the shutdown of LCD production capacity, and the shutdown plan may be advanced to the fourth quarter of this year. There are three large-size LCD panel factories in South Korea, and the 8.5-generation line in Suzhou, which had no news of closing the factory before.

In January of this year, the relevant person in charge of LG Display (LG Display) revealed that it will close the LCD panel factory in South Korea for the production of TVs before the end of the year. In addition, Panasonic has also withdrawn from the LCD business and will terminate production in 2021. Now Mitsubishi has also stepped into the ranks of abandoning the LCD panel business.

However, in early 2020, an epidemic disrupted the economic rhythm, and also disrupted the sales rhythm of Samsung's 8.5-generation LCD panel production line in Suzhou.

It is understood that Samsung’s Suzhou 8.5-generation line has three shareholders: Samsung Display, Suzhou Industrial Park State-owned Assets Holding Development Co., Ltd., and TCL Huaxing Optoelectronics, which hold 60% and 30% of the production line respectively. And 10% of the shares.

Previously, according to foreign media SamMobile, Samsung recently sold its bankrupt LCD business to CSOT, the display division of TCL, for US$1 billion (approximately 6.9 billion yuan). TCL Technology originally planned to complete the delivery of Samsung's 8.5-generation line in Suzhou on January 1, 2021. Now that the Korean government has delayed the acquisition approval, the delivery date of Samsung's 8.5-generation line in Suzhou may be postponed.

All these sales are based on the impact of severe downturn in LCD panel prices, weak demand, and fierce competition. However, the emergence of the epidemic has ushered in a turning point in the LCD panel market. Not only has the global display demand greatly increased, the price of LCD panels has also rebounded sharply. LCD panels suddenly become profitable, and it is reasonable for panel companies to postpone their sales or shut down production lines. (Source: People's Home Grid)

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