The Korea Fair Trade Commission (KFTC) has approved a Chinese chemical company’s request to acquire LG Chem’s LCD polarizer business. As South Korean display manufacturers withdraw from their respective LCD businesses one after the other, transition towards next-generation markets such as OLED has been gaining momentum.
According to the display industry on Tuesday, the commission informed Ningbo Shanshan last month that its request to acquire LG Chem’s LCD polarizer business does not violate the South Korean law related to fair trade and monopoly regulations. It is reported that the Chinese Government also approved Shanshan from acquiring LG Chem’s LCD polarizer business the same month.
“The process of selling LG Chem’s LCD polarizer business is practically in a finishing stage as both the South Korean Government and the Chinese Government approved the sale.” said one official who is familiar with the industry. “It is likely that the whole process will be completed sometime in the first quarter after LG Chem and Shanshan go through a final mediation.”
Ningbo Shanshan increased its share of LG Chem’s Chinese holding company to 70% in June last year and decided to acquire LG Chem’s LCD polarizer business that is under the control of the holding company. Assets related to the business are currently scattered throughout South Korea, China, and Taiwan. The KFTC ruled that the two companies’ transaction does not violate South Korea’s Fair Trade Act.
LG Chem has been concentrating on business restructuring since last year. Its strategy is to withdraw from LCD market that has started to lose profitability and shift its focus towards OLED that has emerged as a new growth engine. It withdrew from its LCD glass substrate business in February last year and it also sold its LCD color filter business to a Chinese company.
It is expected that Samsung Display and LG Display, which are the two major display panel makers in South Korea, and key materials, parts, and equipment industries will also try to withdraw from their respective LCD businesses as fast as possible in order to avoid a price competition with Chinese companies and flooding of Chinese products and turn towards profitable models.
Samsung Display sold part of LCD equipment used for the L8-1-1 line to Efonlong last year in order to build a production base for its new growth engine QD (Quantum Dot) displays. Its Gen 8.5 LCD plant in Suzhou will be sold to CSOT. A committee made up of display experts from South Korean industries, the government, universities, and research institutes is currently looking into what kind of impact CSOT acquiring Samsung Display’s Suzhou plant will have on South Korean industries.
One official from the Ministry of Trade, Industry and Energy said that the review is not completed and that the government will make a decision once the review is finished.
Staff Reporter Yun, Heeseok | email@example.com