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THE INVESTOR
September 25, 2018
Big Reunion

LG

Decision on LG OLED plant in China likely to be finalized in Dec.

  • PUBLISHED :November 30, 2017 - 17:18
  • UPDATED :November 30, 2017 - 17:18
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[THE INVESTOR] The government‘s decision to approve an organic light-emitting diode plant in China for LG Display is likely to be finalized this year, according to a senior official at the Industry Ministry. 

On Nov. 30, the Ministry of Commerce, Industry and Energy held a closed-door meeting of a committee it had formed of private experts in the display sector to review LG’s plan to build an OLED plant in Guangzhou. 




“We will report the consensus made during today’s meeting to the minister and the final decision -- whether to approve or disapprove the investment plan -- is likely to be made within this year,” said Park Young-sam, chief of the ministry’s electronics and parts division. 

Park said he cannot give any details about what was discussed during the meeting due to the sensitivity of the issue. 

Experts and government officials reportedly discussed whether LG is capable of fully protecting its technology and manpower when the plant is built in China. 

The issue dates back to July when LG Display announced its plan to build a plant for generation 8.5 of its OLED panels for televisions in China in response to growing demand for OLED TVs in the global market. The Korean display maker is currently the sole producer of large OLED panels for televisions globally. 

At the end of July, the display firm asked for approval from the Korean government to build a plant in China. A company should obtain permission from the government before building a plant overseas to produce one of the nation’s designated key technologies in order to prevent leaks and protect key industries. 

Four months have passed since, but the government has yet to give the green light, reportedly because it remains unsure whether it is appropriate to build plants in China as some Korean conglomerates have faced operational setbacks due to political issues.

“Some experts (within the committee) are still concerned about LG Display’s (potential) technology leaks, saying the firm appears to be too complacent about the risks. What will be key is whether LG is fully capable of protecting its technologies,” said an anonymous official at the Industry Ministry.

LG Display said there will be no such risks, citing its liquid-crystal display plant in Guangzhou that has been operating since 2013. 

“We already have know-how about how to protect our technologies by operating the LCD plant in the same region. Also, there will be no job loss because we plan to hire Korean experts here and bring them to China,” a LG Display official said. 

LG said building a plant in China is critical to the company in order for it to capitalize on growing OLED panel demand from global television makers from Europe, China and Japan. 

Its large display panels fell to the No. 2 spot for the first time since 2009, coming second to China’s BOE Technology, which accounted for 23.1 percent of total market share in the third quarter, according to data compiled by industry tracker IHS Markit.
 
By Shin Ji-hye/The Korea Herald (shinjh@heraldcorp.com)

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