(Yicai Global) April 13 -- TCL China Star Optoelectronics Technology, the unit of TCL Technology Group that makes liquid crystal display panels, and LG Display have denied that the Chinese firm plans to buy the South Korean panel maker’s 8.5-generation LCD production line in Guangzhou.

When asked about the possible takeover, the relevant people in charge at the two companies told Yicai Global yesterday that the rumor is false.

“LG Display was in talks with CSOT to sell its Guangzhou factory,” Choong Hoon Yi, chief executive of think tank UBI Research, recently told South Korean news outlet The Elec in an interview about Chinese display panel makers monopolizing the LCD market.

“LG Display wants to sell the Guangzhou production line and exit the LCD panel market but is unsure who will take over,” Zhou Hua, chief analyst at Chinese flat panel display and semiconductor research firm CINNO Research, told Yicai Global.

Rong Chaoping, senior research manager at market research institute AVC Revo, said that in the second half of last year, he heard that LG Display had contacted many Chinese companies, including panel and color television factories, to ask if they were interested in purchasing the Guangzhou plant. But there is still no indication of who the buyer will be, Rong added.

The LCD production line in Guangzhou was LG Display’s first overseas factory. With a monthly output of 120,000 glass substrate pieces, the USD4 billion facility was put into operation in 2014. But at the beginning of 2023, its capacity utilization rate dropped to about half.

The South Korean firm owns 70 percent of the Guangzhou LCD production line. Guangzhou Hi-Tech Zone Technology Holding Group and Chinese home appliance maker Skyworth hold 20 percent and 10 percent respectively.

LG Display intended to exit the LCD business before 2020 but delayed the move because of the surging demand for LCD panels during the Covid-19 pandemic. In the past three years, the LCD panel market has been very volatile. Prices of LCD TV panels soared to a 13-month high in July 2021 and then plunged to hit a 15-month low last October.

After the LCD panel market hit rock bottom in the second half of 2022, LG Display made a substantial move to finally exit the market, Zhou noted. Its South Korean peer Samsung Display did the same in June 2022 when it sold its 8.5-generation production line in Suzhou to TCL CSOT.

Since then, LG Display and Samsung Display have accelerated their shift to the organic light-emitting diode business.

LG Display has invested in an 8.5-generation OLED panel production line in Guangzhou with a monthly output capacity of up to 90,000 substrates. The firm owns 70 percent of the plant, while its partner Guangzhou Hi-Tech Zone Technology holds the remainder.

Editor: Futura Costaglione