LG Innotek is going to discontinue BLU(Backlight Unit) LED business, with Wooree E&L and Seoul Semiconductor grabbing the BLU LED sales opportunities, according to industry sources on April 21.
BLU LED are necessary light sources for LCD panels. They are used in LCD TVs, laptops, monitors and others. Wooree E&L, a part of Wooree Group, has secured rights to sell BLU LED in laptops, monitors and signage, along with some right for TVs instead of LG Innotek. With the rights, Wooree E&L is permitted to supply to companies such as LG Electronics, Dell and HP via LG Display.
Wooree E&L is currently selling LED packages for laptops, monitors, smart PCs, TVs and automobiles. The mid-sized LED company is expected to spell out bigger sales for the Kosdaq-listed firm, which recorded sales of KRW 133.2 billion in 2019, and an operating profit of KRW 3.5 billion.
Meanwhile, Seoul Semiconductor secured more than half the sales rights for LCD TVs. It also can sell via LG display, which is likely to boost its revenues from this year. In 2019, its sales stood at KRW 1.29 trillion won, and an operating profit of KRW 49.5 billion.
Both Wooree E&L and Seoul Semiconductor began mass productions early this year instead of LG Innotek. LG Innotek plans to drop the business altogether within the first half of this year. Wooree E&L and Seoul Semiconductor did not acquire the BLU LED-related assets from LG Innotek, mostly because they had sufficient production facilities already.
LG Innotek is planning to sell such assets to a Chinese company, said one source close to the matter.
In October, 2019, LG Innotek decided to restructure its LED business that was bleeding money. It tried to sell via turnkey, but failed to find the right partner. In the process, LG Innotek decided to keep its automobile module business. It is currently in the midst of developing them with partners.
LG Innotek’s LED business recorded 12 straight years of deficit since it was first listed on the main bourse in 2008. Up until 2019, the division’s accumulated operating deficit stood at KRW 1 trillion. To help cut away the losses, LG Innotek also shuttered its HDI business in 2019, triggering speculation that the firm will post better bottom figures this year.
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