A view of LG Innotek's Gumi Plant 4 in Gumi, North GyeongsangLG INNOTEK
Factories that once formed the backbone of the display industry but lost ground to competition are lighting up once again — as production hubs for the AI industry.
LG Innotek is considering acquiring an LCD plant in Gumi, North Gyeongsang, from LG Display, industry sources said on Sunday. The sixth-generation plant, known as P6E, produced LCD panels for laptops and monitors before operations stopped in June 2023.
One option under consideration is to remove the existing LCD equipment and build a production line for semiconductor package substrates. LG Innotek has been expanding its flip-chip ball grid array (FC-BGA) business, which produces high-value semiconductor substrates used in AI servers and other products.
The deal would make LG Innotek the latest company to repurpose a plant left idle by China’s dominance of the LCD market and a prolonged industry slump.
“We plan to roughly double our semiconductor substrate production capacity,” LG Innotek CEO Moon Hyuk-soo said after the company’s shareholder meeting in March. “Our package solutions business, which makes semiconductor substrates such as FC-BGA, is our most profitable business relative to revenue.”
LCD factories are already changing hands globally.
Japanese semiconductor package substrate maker Shinko Electric Industries signed a deal on Sept. 30 to acquire Japan Display’s Mobara plant in Chiba Prefecture.
The plant, which had produced LCD panels for Apple’s iPhones before operations stopped in November last year, will be converted to produce semiconductor package substrates for AI accelerators.
A worker walks past the logo of TSMC, a Taiwanese multinational semiconductor contract manufacturing and design company, in Hsinchu, Taiwan, on Jan. 29.AP/YONHAP
Taiwan’s TSMC, one of the world’s largest contract chipmakers, bought an LCD plant from display maker InnoLux for 17.14 billion New Taiwan dollars ($528 million) and converted it into an advanced packaging plant for AI chips called AP8.
The site of Sharp’s LCD plant in Osaka was also sold to companies including Japanese telecom operator KDDI. KDDI began operating an AI data center there in January.
Chinese price competition and a prolonged market downturn have pushed more LCD factories onto the market.
Chinese companies BOE Technology Group and TCL China Star Optoelectronics Technology accounted for more than half the global large-size LCD market last year, with shares of 36.2 percent and 16.4 percent, respectively, according to market researcher Omdia.
The outlook for the market also remains weak.
The global LCD market is expected to shrink 5.1 percent this year to $76.4 billion from $80.5 billion last year, according to the Korea Display Industry Association.
Models look at the 2026 LG OLED evo during a media briefing held by LG Electronics at Ground220 in Yeongdeungpo District, western Seoul, on March 25.NEWS1
Higher prices for memory chips and processors have chilled demand for PCs and TVs. Adoption of organic light-emitting diode (OLED) displays, which are replacing LCDs, is also accelerating.
Companies are interested in old LCD factories for one key reason: time.
LCD plants already have large-scale power and water infrastructure as well as clean rooms, which can allow companies to begin operations sooner than if they built entirely new facilities.
The ability to shorten permitting procedures, including environmental impact assessments required for new factories has also been cited as one reason TSMC acquired the Innolux plant, according to the China Times, a Chinese-language newspaper published in Taiwan.
LG Innotek's V3 plant in VietnamLG INNOTEK
The same logic applies to AI data centers, which require enormous amounts of electricity and cooling capacity.
KDDI used the existing power and cooling facilities at Sharp’s Sakai plant, once the world’s largest LCD factory, and began operating an AI data center there in January, about nine months after taking over the site.
“Factories that had become liabilities are now assets that can buy companies time thanks to the AI boom,” an industry source said.
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
