LG Chem to move polarizer production lines to China

South Korea’s LG Chem will be moving parts of its polarizer production facilities at its Ochang plant in North Chungcheong Province to its Nanjing plant in China during the second quarter of this year, industry sources told The Elec on Jan. 27.

The move is a part of LG Chem’s plans to eventually sell off its polarizer business. Polarizers are one of the key materials constituting LCDs panels. LG Chem, however, does not plan on selling off the facility for producing polarizers for OLED panels.

“LG Chem is looking to get rid of money-losing businesses under Shin’s leadership,” said one LG Chem official.

In 2018, the LG affiliate posted a KRW 28.3 billion loss from its electronics materials business, which produces the polarizers. In April, 2019, LG Chem Vice Chairman Shin Hak-cheol created a high-tech materials business division by restructuring the electronics materials business.

In the first half of 2019, LCD panel prices fell but polarizer prices rose after Chinese display maker began to ramp up its production volume. This helped LG Chem’s bottom line improve during its first quarter earnings report last year.

Earlier, Taiwanese market research firm WitsView Technology Corp. had predicted that the supply rate of polarizers in 2019 would stand at the lowest in 4 years at 3.3%. However, as display makers began to cut production beginning in mid-2019, panel prices stopped falling, and polarizer prices stabilized.

WitsView is now saying that the polarizer supply rate will jump to 9.9%. Polarizers produced by world’s fourth-largest polarizer-maker BenQ Materials reportedly fell 5% on-year.

As of the third quarter of 2019, LG Chem took up 27% of the global large-sized panel polarizer market. This year, the firm expects to begin mass production of the polarizers in the production lines that China’s Hangzhou Jinjiang Group affiliates invested in.

In the third quarter of 2019, LG Chem invested KRW 74.9 billion into newly installed production lines for OLED panel polarizers in Guangzhou of China. The South Korean firm’s accumulated investment in the facility stood at KRW 123.8 billion. LG Chem signed a deal with Guangzhou City to invest a total of KRW 350 billion by 2022 into the production lines.

The Elec is South Korea’s No.1 tech news platform.