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Korean Government Delays Approval of TCL’s Purchase of Samsung’s 60% Ownership in Gen 8.5 Suzhou Fab
TCL’s purchase of Samsung Display’s Gen 8.5 LCD fab in Suzhou, China was expected to close on January 1, 2021 but will likely be delayed as the South Korean government has yet to sign off on the deal. It is necessary to get government approval when a foreign entity is involved as LCD is considered a core technology in Korea. The Ministry of Trade, Industry, and Energy met last in October to discuss the transaction but has been unable to hold the additional meetings necessary to assess the impact of the sale. They claim that COVID-19 is the reason meetings have not been held, but it seems likely the government is reluctant to give quick approval for political reasons. The Suzhou fab, built in cooperation with the Suzhou government was a $3b project. Samsung’s stake is 60%, with the local government owning 30% and TCL owning 10%. Samsung will sell 60% stake in the fab to TCL along much of its stake in the co-located module fab, while the Suzhou government will retain its 30% stake. Samsung Display planned to use $740m from the sale to buy an additional 12% stake in ChinaStar, while keeping the remainder ($340m). Originally, the deal was expected to close in October, since the fab’s Gen 8.5 technology is quite common and readily available in China, but this is not the first time such cross-border transactions have been held up by governmental delays. As SDC ends large panel LCD displays, staff in the display division has already been reduced and will continue to see reductions as the company gets closer to the sale of its Suzhou, China fab. In August, the company transferred ~200 employees from display to semiconductors as they began to wind down large panel LCD production, and it looks like they are currently doing the same with what is expected to be hundreds more, as display workers are transferred to the semiconductor side.
TCL’s purchase of Samsung Display’s Gen 8.5 LCD fab in Suzhou, China was expected to close on January 1, 2021 but will likely be delayed as the South Korean government has yet to sign off on the deal. It is necessary to get government approval when a foreign entity is involved as LCD is considered a core technology in Korea. The Ministry of Trade, Industry, and Energy met last in October to discuss the transaction but has been unable to hold the additional meetings necessary to assess the impact of the sale. They claim that COVID-19 is the reason meetings have not been held, but it seems likely the government is reluctant to give quick approval for political reasons. The Suzhou fab, built in cooperation with the Suzhou government was a $3b project. Samsung’s stake is 60%, with the local government owning 30% and TCL owning 10%. Samsung will sell 60% stake in the fab to TCL along much of its stake in the co-located module fab, while the Suzhou government will retain its 30% stake. Samsung Display planned to use $740m from the sale to buy an additional 12% stake in ChinaStar, while keeping the remainder ($340m). Originally, the deal was expected to close in October, since the fab’s Gen 8.5 technology is quite common and readily available in China, but this is not the first time such cross-border transactions have been held up by governmental delays. As SDC ends large panel LCD displays, staff in the display division has already been reduced and will continue to see reductions as the company gets closer to the sale of its Suzhou, China fab. In August, the company transferred ~200 employees from display to semiconductors as they began to wind down large panel LCD production, and it looks like they are currently doing the same with what is expected to be hundreds more, as display workers are transferred to the semiconductor side.
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