LG Display has confirmed the sale price of its Guangzhou liquid crystal display (LCD) factory to China's largest electronics company, TCL, at a higher than initially expected 2.2 trillion won. Amid repeated poor performance, LG Display, having secured substantial funds, plans to increase investments in organic light-emitting diode (OLED) business.
According to the Financial Supervisory Service's electronic disclosure system on the 11th, the final sale price of LG Display's Guangzhou 8.5-generation LCD factory has been set at 2.2466 trillion won. Earlier, LG Display signed a contract in September last year to transfer equity in its Guangzhou large LCD panel and module factory to TCL's display subsidiary, China Star Optoelectronics Technology Co., Ltd. (CSOT).
At that time, the expected sale price was 2.0256 trillion won, which increased by more than 200 billion won. The solid performance of the Guangzhou factory last year and the increase in the yuan (CNH)-won exchange rate from the previous day (187.56 won to 200.82 won) are believed to have influenced the final sale price.
Kim Sung-hyun, LG Display's chief financial officer, noted at last month's shareholders' meeting, "I mentioned during the conference call last October that the business results for 2024 would be reflected in the final sale price, and I said that the final settlement amount would not decrease." He added, "Based on the calculations made by February, the sale price is expected to increase somewhat, and the exact amount calculation should be done by early April."
With the decision on this sale price and the official transfer of the Guangzhou factory to CSOT earlier this month, LG Display has officially terminated its large LCD business. TCL has renamed the Guangzhou factory "T11" and has begun full-scale operation of the production line.
It is reported that the sale proceeds from the factory will be paid to LG Display multiple times within this year. LG Display plans to use the secured funds for facility investment, research and development, and operational expenses to enhance its competitiveness in the OLED business.
LG Display is expected to see a significant improvement in performance this year, aided by the advancement of its OLED business structure and operational efficiency. Analysts predict that LG Display will turn a profit this year, generating an annual operating profit of 600 billion won. Last year, LG Display recorded an operating loss of 560.6 billion won, which is a reduction in losses of about 2 trillion won compared to the previous year's loss of 2.5102 trillion won.