Just as Samsung’s LCD divestment was about to break some new records in corporate deliberateness, the tech giant suddenly shifted into overdrive by finalizing a blockbuster factory sale to China.
Newly emerged reports out of South Korea claim Samsung found a buyer for its LCD plant in Suzhou. Located in the Jiangsu Province on the eastern shore of mainland China, the said plant represents a significant chunk of what remains of Samsung’s LCD business. As a reminder, the company has been actively winding down its in-house LCD manufacture since last year as part of a strategic shift to OLED products. Sammobile reported.
Related: Samsung Electronics looks to shift its production to Vietnam
That endeavor is now continuing with the sale of the Suzhou factory that will net Samsung $1.08 billion, industry insiders claim. The buyer is China Star Optoelectronics Technology (CSOT), the display division of Chinese consumer electronics juggernaut TCL. CSOT’s billion-dollar splurge was enough to secure a 60% stake in the business, while its parent reportedly purchased another 10% of the plant. The remaining third will soon be taken over by the city of Suzhou, as per the same report.
Samsung leaving the LCD industry with a bang after all
Overall, this is a pretty stellar turn of events for Samsung seeing how the Suzhou plant has been nothing more than a giant money sink for the company since spring. Which is when Samsung pretty much shut down shop in response to the initial coronavirus outbreak, laying off 1,700 people in the process. Prior to this year, the Chinese facility was responsible for roughly 27% of Samsung Display’s annual LCD output.
While Samsung remains all too happy to offload its LCD assets to anyone who asks, it’s worth remembering that 2020 actually boosted its LCD profits one final time. Given the abudance of economic uncertainty and the huge hit to forecast TV revenues stemming from the postponement of the Tokyo Olympics 2020, Samsung could have hardly hoped for a better summer on the LCD front. Even prior to its last shutdown, the Suzhou factory hasn’t been consistently operating at capacity since the turn of the year. And that’s just the tip of the COVID-19 iceberg that’s been weighing down on Samsung for a while now.
According to a report by Sammobile, as massive as this sale may be, Samsung’s deal with CSOT is far from one-sided. South Korean media hence reports that Samsung display is taking a 12.33% stake in TCL valued at $739 million as part of the same transaction.
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Source: Vietnam Insider