Samsung Sells its Suzhou Display Factories to TCL, Transferring Production Outside China
COVID-19 and China
Samsung withdrew most of the production lines in China. Image credit: Unsplash

TCL Huaxing, the majority-owned subsidiary of TCL technology (000100:SZ) on August 29 announced the purchase of Samsung's (005930:KR) Suzhou display panel production lines at USD 1.08 billion, taking 60% equity of SSL (Suzhou Samsung LCD Technology) and 100% equity of SSM (Suzhou Samsung Display Manufacturing). Meanwhile, the Samsung Display will account for 12.33% of the total equity in TCL Huaxing with USD 739 million, which is the price of 60% equity of SSL. Upon the closure of the deal, Samsung Display will be the second-largest shareholder of TCL Huaxing, following TCL technology's 80.28%.

In previous years, the Suzhou production lines supplied Samsung with over 80% of its Visual Display's total demand. By acquiring the local factories, TCL technology could further enhance its leading position in display manufacturing as well as improving corporate profitability.

Samsung has been moving its manufacturing business from China to India and Vietnam during recent years. In early August this year, Samsung decided to shut down its last PC assembly and manufacturing plant in Suzhou Jiangsu, laying off around 1,000 employees. Last year in 2019, Samsung closed its last smartphone manufacturing line in Huizhou Guangdong. After the sales of its display plants in Suzhou, the only remaining Samsung factory in China is the semiconductor factory in Xi'an Shanxi.

Editor: Luke Sheehan
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