The South Korean government has approved Samsung Display’s sales of its liquid crystal display (LCD) factory at Suzhou, China to TCL (CSOT), TheElec has learned.
Samsung and TCL agreed to the sales last year.
The Ministry of Trade, Industry and Energy held a committee meeting on Thursday to approve the sales. Samsung Display was notified the same day.
Gen 8.5 LCD manufactured at Suzhou is considered a core national technology. It requires government’s approval under the country’s industry technology protection laws.
With the sales, Samsung Display will likely now focus its attention on developing quantum dot (QD) displays.
The sales to TCL is expected to be completed in March. Employees of the factory will receive bonuses worth 3.3 times their base payments.
TCL initially planned to began production at its new LCD factory, T9, this year after the Suzhou factory was successfully converted to IT panels within 2020. But the delay in South Korea’s approval of the sales and customers requesting it continue to make more TV panels means this plan will be changed.
For TCL, conversion to IT panels would have been more profitable as the panels are pricier than TV panels.
Last year in August, Samsung Display announced that it was selling the Suzhou plant to TCL. Under the deal, COST will acquire a 60% stake in Samsung Suzhou LCD (SSL) and a 100% stake in Suzhou Display (SSM) for a total of US$1.08 billion.
Samsung Suzhou LCD’s ownership structure will change to __ CSOT’s 60%, Suzhou government’s 30% and 10% owned by TCL, the parent company to CSOT. Samsung Display plans to use the US$739 million secured from the sale of its 60% stake to own a 12% stake in CSOT. The US$341 million secured from selling its 100% stake in Suzhou Display will be used a liquidity.