TCL Huaxing locks in another panel factory

Author | Huang Yu

Editor | Liu Baodan

Since last year, the sale of LG Display's (LGD) Guangzhou LCD panel factory has attracted industry attention. After twists and turns, there has finally been clear progress.

On August 1st, LGD, a panel company under South Korea's LG Group, announced that the company has selected TCL China Star as the preferred bidder for its Guangzhou LCD panel factory equity and will commence exclusive negotiations. Subsequently, TCL China Star's parent company TCL Technology also confirmed this news.

According to TCL Technology's announcement, if TCL China Star can complete the follow-up procedures, it will acquire 70% equity of LG Display (China) Co., Ltd. and 100% equity of LG Display (Guangzhou) Co., Ltd. The two companies had revenues of 6.33 billion yuan and 11.86 billion yuan respectively last year, with net profits of 602 million yuan and 536 million yuan, and total assets of approximately 34.45 billion yuan.

Public information shows that LG Display's core asset is the LGD Guangzhou 8.5th generation LCD panel factory, mainly producing large-size TV panels, which is LGD's first overseas panel factory.

If TCL China Star successfully completes this acquisition, it will undoubtedly have a significant impact on the global large-size LCD display panel industry, especially the LCD TV panel market.

Group Wisdom Consulting pointed out that LGD was once the largest manufacturer in the LCD TV panel market. Due to the expansion of Chinese manufacturers and the strategic shift to the OLED track, the LCD business has shrunk. Currently, only the Guangzhou production line and a small amount of production capacity at the P8 line in South Korea correspond to LCD TV panel production, with an estimated shipment of 13.2 million panels in 2024, accounting for 5.7% of the global share.

Among them, the Guangzhou 8.5th generation LCD panel production line has a maximum capacity of 220K/month, accounting for approximately 6% of the global capacity area. Due to high operating costs and large fluctuations in utilization rate, after deep integration with major brands in 2024, the production capacity is expected to recover to 180K/month, mainly producing 55", 65"+32", and 86" cut products, with an annual shipment of over 10 million panels.

It is reported that the main customers supplied by this factory include South Korean brands, as well as Chinese manufacturers such as Skyworth and Konka.

The sale of LGD's Guangzhou LCD panel factory has attracted the interest of several Chinese manufacturers, with previous market rumors suggesting that BOE, TCL China Star, and MTC (Zhaochi) have all participated in the bidding competition.

Industry insiders believe that BOE and TCL China Star aim to further expand their LCD business territory, while MTC intends to strengthen its market competitiveness in the television business by acquiring LG's Guangzhou LCD factory Obviously, in the fierce bidding war, TCL China Star has taken the lead in securing victory.

If the Guangzhou LCD panel factory changes ownership to TCL China Star, this means that LG Display will completely withdraw from supplying LCD TV panels starting from 2025, and will focus on the OLED track in the future.

At the same time, Korean panel manufacturers will completely withdraw from the LCD TV panel market supply, and mainland Chinese panel manufacturers will begin to dominate the LCD panel market.

According to data from Omdia, in 2025, BOE and TCL China Star together account for over 50% of the global G5 and above LCD production capacity area, reaching 52.6%; overall, mainland Chinese manufacturers account for 72.7% of the global LCD panel supply share.

TCL China Star originally held the second position in the global LCD TV panel market share. If it acquires LG Display's Guangzhou LCD factory, its market share will further increase.

Omdia predicts that by 2025, TCL China Star's global LCD production capacity share will significantly increase to 25.2%, an increase of 5.5 percentage points from 2024, but still lower than BOE's 27.4%.

In the future, with LG Display further exiting and TCL China Star increasing its production capacity, the global LCD panel supply landscape will be rewritten.

However, TrendForce points out that after TCL China Star acquires LG Display's Guangzhou LCD factory, how to maintain the existing customers of the Guangzhou factory and seek more customer resources will become its primary challenge.

In conclusion, as industry concentration continues to increase, TCL China Star's future opportunities and challenges coexist