The Korean Government did not finish its review of LGD's plan to build an OLED TV fab in China

In July 2017 LG Display announced that it has decided to build a 8.5-Gen (2200x2500) OLED line in Guangzhou, China, to make OLED TV panels. The Korean government hesitated whether to approve this plan, as it sees OLED as a strategic technology Korea' economy and this is the first time a Korean company plans to build an OLED fab outside of Korea.

Earlier this month we posted a report from Business Korea that seemed (it was a rather confusing report...) to suggest that the Korean Government committee decided to approve this plan, and LG is now free to start constructing its fab. Today YonHap news says that the Korean government has not finished to review LGD's request.

According to YonHap, the government announced that it will establish an expert panel to review the plan. This follows three rounds of preliminary reviews, and the expert panel will hold a meeting tomorrow and will deliver its recommendation to an industrial technology protection committee, which will make the final decision. In earlier meetings, members of a subcommittee expressed concerns over technology leaks and diplomatic uncertainties between Seoul and Beijing.

The new fab, according to the initial plan at least, will be a joint-venture with the local government and LGD will hold a 70% share. The total cost for this fab will be KRW2.6 trillion ($2.3 billion USD). Building a fab in China has several advantages - China has lower wages compared to Korea, and the fab is located very close to the very large and important Chinese market. But the main advantage is the government subsidies - according to DSCC this could mean the difference between profit and loss in this fab for LGD.

Posted: Nov 29,2017 by Ron Mertens