Recently, South Korean media reported that LGD has encountered new difficulties in building an OLED panel factory in Guangzhou, China: The Chinese government has approved the construction project as a condition and requested the Korean side to agree to transfer OLED technology. Korean media said that in order to protect its domestic electric car battery, In chips, display panels and other industries, China is making 'repressive' measures against South Korean companies.
According to South Korea's display industry sources, the Chinese government has proposed three conditions for the approval of LG Display's Guangzhou factory: First, to shift OLED manufacturing technology; Second, to build an OLED R&D center; Third, to purchase parts and components from local sources.
It is reported that LG Display plans to invest 7.4 trillion won (approximately 44 billion yuan) to build an 8.5-generation OLED plant in Guangzhou, which is expected to be completed in the second half of next year. Since it was started in August last year, it has invested hundreds of billions of won.
In fact, as early as October 27, 2016, LG Display's joint strategic partner Skyworth held a conference at the Kerry Center in Beijing. Lu Xiangde, the president of LG DisplayOLED's business unit, disclosed that: 'LGD does not rule out the future production of OLEDs in Guangzhou. Possible. '
On April 27, 2017, the General Office of the People's Government of Guangdong Province issued the "Implementation Plan for Launching a New Digital Family Initiative to Promote the Application of 4K Television Networks in Industrial Development", which has aroused widespread concern in the industry. In this notice, 'Gold Display OLED Project' was announced. The wording was particularly noticeable and was interpreted by industry insiders as a sign that LGD will invest in building an OLED plant in Guangdong.
However, LGD later clarified the rumors that it will launch the OLED project in Guangzhou. LGD’s Guangzhou factory responsible for external communication, Le Jinxiu (China) Co., Ltd., Deputy Minister of External Cooperation, Ji Dongzhi also said: 'We currently do not have this idea.'
Surprisingly, on July 25 last year, LGD announced that it will build a joint venture factory in Guangzhou, China, to produce large-size OLED panels. Its panels are mainly used for television and electronic billboards. According to reports, the registered capital of the joint venture plants is approximately 157 Billion yuan, LGD will hold 70% of shares; Chinese company Guangzhou Kaide Technology holds 30% of the shares.
However, this is not the end of the matter. Last September, LGD's investment in the OLED panel factory in Guangzhou was an issue. Media reports said that due to concerns about advanced technology leaks and dissatisfaction with China's handling of 'Sad', the Korean government intends to block Under the LGD investment case in China.
Until December 26 last year, the South Korean government had conditional on approving LGD to invest in building an 8.5-generation OLED panel production line in Guangzhou, China. However, the South Korean government proposed three conditions for LGD China to build a factory:
First, to increase the 'domestic' ratio of materials and equipment. Although the specific weight has not been announced, the 'domestic' ratio of materials and equipment will be around 70% considering the current status of large-scale OLED mass production.
Second, in order to prevent technological outflows from developing safety measures, LG needs to establish a security countermeasures team with the Korean government to test the technical confidentiality of Chinese factories every six months.
Thirdly, a new generation of large-scale OLED technology needs to be researched and developed in Korea. Related equipment also needs to be produced in South Korea. This requirement is actually cutting off the possibility of high-tech outflow from the source.
From this point of view, the three new conditions proposed by the Chinese side and the three conditions of the Korean side can be said to be diametrically opposed to each other. According to a report by the Korean media, LGD stated that it is difficult to accept the three conditions proposed by the Chinese side.
For the request from the Chinese side, South Korea showed that the industry believes that this is for the sake of protecting its own domestic industry. Although China's display manufacturers can now produce OLEDs for smart phone panels, they have not yet mastered the production technology of large OLED panels such as TV sets. The industry expects Chinese companies such as China Star Optoelectronics to wait until around 2022 as soon as possible to master the production technology of large OLED panels.
An industry insider said: 'The company that is sponsoring LG Display's construction of a Guangzhou factory is part of the BOE's affiliates. BOE strongly opposes LG Display's construction of a factory in Guangzhou.'