According to research firm, Trendforce, Chinese TV and electronics giant TCL Group officially announced its plans to acquire an 80% equity stake in LG Display’s 8.5-generation LCD panel plant in Guangzhou, China. The announcement was made on September 26, and the acquisition includes a 10% stake previously held by Shenzhen Skyworth. TCL Group is acquiring 100% equity of the module factory through its panel making subsidiary, CSOT (China Star Optoelectronics Technology).
The acquisition has a base price of 10.8 billion Chinese Yuan (around $1.5 Billion U.S. dollars). It includes the “transfer of the necessary technology and support services to operate both facilities” according to Trendnet. Per the report, Guangzhou High-Tech Zone Technology Holding Group will retain the remaining 20% minority interest in the plant. The acquisition is expected to be completed in the first half of next year.
TCL attained #2 market share in global TV unit sales in 2023 with approximately 12.5% of the overall market. This lags behind Samsung, who captured approximately 19.6% of the global TV market last year in volume but closer to 30% of the overall sales revenue. TrendForce believes this deal will push TCL’s panel subsidiary’s market share in large-generation LCD production capacity beyond 20%, solidifying the company’s position as the second-largest player in the industry, and potentially making gains on the #1 TV-maker.
The Guangshou plant was originally opened by LG Display in August, 2019 with a capacity of 10,000,000 panels per year. Its main product of this 8.5-generation line is LCD panels for TVs. Trendnet estimates that the plant will manufacture approximately 14 million units in 2024, with more than half of those being 55-inch or larger products. TCL has led the charge for larger and larger TVs over the past few years. The company currently offers three separate 98-inch models as well as the world’s largest production LED/LCD TV, the 115-inch QM891G (which was our pick for best TV at CEDIA Expo 2024).
At a press briefing earlier this year, TCL’s Executive VP of Sales and Marketing in North America, Chris Hamdorf, told us that TCL sold over 10,000 98-inch TVs in the U.S. in 2023 and their goal is to sell over 100,000 98-inch (or larger) sets in 2024. That may seem like an aggressive goal but the company is confident they can pull it off. And now it’s clear that they’re making the investments necessary to grow their output capacity and with it, their market share. While this acquisition may not contribute much to the company’s output in 2024, it should be a major factor in the company’s growth into next year and beyond.
One Step Beyond LED/LCD?
While the safe assumption might be that the company will continue to manufacture the panels and TVs we know best from TCL (namely LCD TVs with MiniLED backlights), it’s also possible that this acquisition is part of an expansion toward newer technologies like MicroLED or inkjet-printed OLED TVs. Printed OLED panels could bring the cost of OLED TV production down significantly while increasing manufacturing yield. TCL has made some advancements in printed OLED in recent years and has intimated that it would begin production of printed OLED panels as early as late 2024/early 2025. This date jibes with the acquisition timeline of the Guangzhou plat.
Meanwhile, MicroLED panels with blue pixels and a quantum dot color layer could rival or even exceed OLED TVs in picture quality and longevity. But MicroLED TV manufacturing has yet to reach the affordability or high yield rates of current OLED and LCD TVs. A breakthrough in MicroLED module manufacturing could bring the cost of manufacturing down to cost parity with current OLED TVs or even below, which would make the high-end TV market a lot more interesting.
Admittedly this is somewhat speculative: TCL has not confirmed plans to diversify into widescale large panel OLED manufacturing or MicroLED panel fabrication. But the company has been making big moves and we wouldn’t be surprised if these moves expand beyond the current size, price and brightness wars of MiniLED/LCD TVs.
It’s important to note that the current LG Display plant in Guangzhou makes panels for multiple companies. According to Trendnet, currently more than half of LG Display Guangzhou’s clients are South Korean brands, and some of these companies also buy panel’s from TCL’s CSOT subsidiary. This could potentially shift some TV makers to buy panels from other panel makers, in order to diversify their supply chains. But it will certainly allow TCL to benefit from economies of scale and maintain their aggressive pricing models.
The Bottom Line
TCL’s acquisition of one of the largest LCD panel plants in the world shows the company’s continued commitment to TV market share growth and expansion. Whether this plant acquisition will be a move toward newer panel technology or simply an investment to ensure stable supply of current LED/LCD panels, it’s clear that TCL has set their sights on #1.
Related Reading:
TCL’s 2024 QD MiniLED TV Lineup Gets Bigger and Brighter at Affordable Prices
TCL 65-inch QD MiniLED TV Review: Champagne Tastes on a Beer Budget?
