LG Chem Focuses on the 'Future'... Shifts from LCD to Battery and OLED Investments

Accelerated Business Restructuring
LCD Polarizer Business Sale Scale 1.3 Trillion Won
Secured Funds to Invest in Electric Vehicle Batteries
Focus on Strengthening OLED Business Competitiveness

Shin Hak-cheol, Vice Chairman of LG Chem, is giving a greeting at the agreement ceremony for the secondary battery industry promotion industry-finance cooperation program held on the 9th at Magok LG Science Park in Gangseo-gu, Seoul. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Hwang Yoon-joo] LG Chem is selling its LCD polarizer business to a Chinese company and undertaking business restructuring. As profitability deteriorated due to the volume offensive by Chinese LCD companies, LG Chem is decisively exiting the materials industry and plans to accelerate business restructuring by focusing investments on next-generation displays such as OLED and electric vehicle batteries.

◆ LCD Polarizer Business Sold to China for 1.3 Trillion KRW = On the 10th, LG Chem announced that it has signed a conditional contract to sell its 'LCD polarizer' business to Chinese chemical materials company Shanshan. The sale amount is $1.1 billion (approximately 1.3 trillion KRW).

A polarizer is a film attached to the front and back of an LCD panel that allows or blocks light passage. LG Chem has been pushing to sell the polarizer business as part of strengthening competitiveness by exiting non-core businesses due to deteriorating profitability caused by low-price competition from Chinese LCD companies.

LG Group's decision to sell LG Chem's LCD materials business came as the business outlook became uncertain due to the volume offensive by Chinese companies. It is expected that by 2024, Chinese companies' global LCD market share will expand to 60%. Additionally, LG Chem's decision to focus on electric vehicle batteries and automotive electronics also played a role in the sale decision.

Previously, LG Chem planned to sell its LCD glass substrate business but sold the factory site and buildings after no buyer appeared. The LCD color filter photoresist business was sold to Chinese company Yoke Technology for about 58 billion KRW. The polarizer business, in which LG Chem once held a 27% global market share and generated sales of about 2 trillion KRW, was also sold to a Chinese company.

However, LG Chem's business restructuring is not expected to immediately lead to workforce restructuring. In the case of the LCD polarizer business, domestic production workers were reassigned before the sale. The remaining personnel will also be gradually reassigned to other business units such as batteries and petrochemicals.

◆ Expanding Investment in Future Business Areas such as OLED and Electric Vehicle Batteries = LG Chem plans to invest the funds secured from the sale of the LCD polarizer business into the mobility industry and the rapidly growing electric vehicle battery sector. Some product lines, such as automotive LCD polarizers, were excluded from this sale for this reason. While selling the LCD polarizer business, LG Chem plans to focus on growing the OLED polarizer business produced at its domestic Ochang plant.

The next-generation display OLED field has high technological entry barriers, and Chinese companies have not yet reached mass production stages. The automotive LCD polarizer business also has relatively high technological barriers.

The IT Materials Division will strengthen research and development (R&D) of large OLED TV polarizers and encapsulation films, small and medium-sized P-OLED (plastic OLED) polarizers and process protective films, as well as OLED materials such as emission layers and common layers, and actively pursue market expansion.

The Automotive Materials Division plans to focus on high-strength lightweight materials to lead the market. As global fuel efficiency regulations tighten to improve the environment, body lightweighting technology will become an important competitive factor. Therefore, the division will develop differentiated materials by product function centered on engineering plastics (EP) to strengthen its ability to respond to global customers.

The Industrial Materials Division will accelerate securing core materials for electric vehicle batteries by advancing cathode material production technology, one of the four major raw materials for secondary batteries, and expanding internalization rates to ensure stable supply.

An LG Chem official said, "We plan to break away from the LCD materials business, focus on the next-generation display OLED market, and actively nurture engineering plastics and battery cathode material businesses as future growth areas."

This content was produced with the assistance of AI translation services.