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SDC’s Suzhou Gen 8.5 LCD Fab Sale Approved by Korean Government
After months of delay, which contributed unexpected profits to SDC, the South Korean government approved Samsung Display’s sale of its LCD factory at Suzhou, China to TCL (CSoT). The deal between Samsung and TCL was agreed to in August ‘20,when Samsung Display announced that it was selling the Suzhou plant to TCL. Under the deal, CSoT would 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.
The Ministry of Trade, Industry and Energy held a committee meeting last week to approve the sales. The sale 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 begin 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 caused this plan will be changed. For TCL, conversion to IT panels would have been more profitable as the panels are pricier than TV panels. 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.
After months of delay, which contributed unexpected profits to SDC, the South Korean government approved Samsung Display’s sale of its LCD factory at Suzhou, China to TCL (CSoT). The deal between Samsung and TCL was agreed to in August ‘20,when Samsung Display announced that it was selling the Suzhou plant to TCL. Under the deal, CSoT would 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.
The Ministry of Trade, Industry and Energy held a committee meeting last week to approve the sales. The sale 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 begin 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 caused this plan will be changed. For TCL, conversion to IT panels would have been more profitable as the panels are pricier than TV panels. 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.
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