Samsung bought CSOT shares for $892 million

Samsung Electronics has acquired its subsidiary Samsung Display's stake in Chinese panel manufacturer CSOT. According to Seoul Economic Daily, a South Korean media, the company paid $892 million for a 10.16 percent share in CSOT.

CSOT is TCL's panel manufacturing company. Samsung Display received this share as part of the deal in 2020, when it sold its LCD factory in Suzhou, China, to CSOT while withdrawing from LCD production. According to reports, the amount paid by Samsung Electronics is approximately 50 percent above the value in 2020.

Why did Samsung buy CSOT stock?

Samsung's official justification is to strengthen the partnership with CSOT. Samsung Electronics continues to use LCD panels in its televisions, white goods and mobile devices. Therefore, it seems strategically meaningful for the company to have a direct share in a major LCD supplier.

On the other hand, the process also benefits Samsung Display. Samsung Display, which has completely abandoned LCD production, gets rid of the LCD-related asset on its balance sheet with this sale and makes a significant profit. Thus, the company will be able to focus more on high-quality OLED and foldable display panels.

CSOT, display supplier of big brands

CSOT has become one of the important display suppliers of major brands in recent years. As a matter of fact, in our SDNTV video where we visited TCL's facilities in Shenzhen, we saw that CSOT produces screens for brands such as Lenovo, Motorola and Xiaomi. It is known that Samsung is also working with Chinese panel manufacturers on some Galaxy models.

Samsung did not make a detailed statement about the transaction. However, the move shows that the Samsung group will continue its relationship on the LCD side directly through Samsung Electronics rather than Samsung Display.