Samsung Display’s sales of its liquid crystal display (LCD) factory in Suzhou, China is facing delays, Chinese media Ijiwei reports.
This is from delays caused by the COVID-19 pandemic for the South Korean government to approval the deal.
LCD is designated a national core technology by the South Korean government. Sales of production line that uses related technology but be reviewed and approval by a committee under the Ministry of Trade, Industry and Energy. But holding of such a meeting is delayed by the pandemic.
The last committee meeting was held in October that discussed the impact of Samsung’s sales of its Suzhou 8.5th generation line to TCL for US$1.08 billion. The committee was planning hold multiple additional meetings before making a decision after that.
TCL aimed to finish the contract by January 1 2021, according to Ijiwei, but this will likely now be delayed.
In August, TCL said it would acquire the 60% stake in Samsung Suzhou LCD owned by Samsung Display. It said it will also buy the 100% stake in Suzhou Display. The combined deal is worth US$1.08 billion.
Currently, Samsung Display owns 60% of Samsung Suzhou LCD, with the Suzhou local government owning 30% and CSOT 10%. After the deal, CSOT will own 60%, the Suzhou government 30% and TCL 10%.
Samsung Display, in turn, was planning to use US$739 million out of the funds from the sales to buy a 12% stake in CSOT. It was planning to use the remaining US$341 million from the sales of Suzhou Display as liquidity.
Samsung’s LCD factory in Suzhou accounted for 27% of its total LCD production.
The company is turning its focus to producing quantum dot (QD) displays and more smartphone organic light emitting diode (OLED) panels.