On the evening of December 26, TCL Technology announced its plan to acquire 80% equity interests and claims of Zhaoyuan Optoelectronics for RMB 490 million, marking its official foray into the LED chip sector. This transaction aims to improve TCL Huaxing’s layout in the next-generation display technology field, strengthen core technology reserves, and build sustainable competitiveness. Upon completion of the transaction, Fujian Zhaoyuan Optoelectronics Co., Ltd. will become a holding subsidiary of TCL Technology.
In the announcement, TCL Technology stated that the participation in the auction is intended to enable TCL Huaxing to independently master the LED chip design and manufacturing processes, build a vertically integrated industrial chain from LED chips to display modules, and establish an independent and controllable supply chain system.
Following the completion of this transaction, on the one hand, TCL Huaxing will accelerate the construction and integration of the LED vertical industrial chain system based on the target company’s existing assets and business foundation, expedite the advancement of its Mini/Micro LED high-end display technology, and promote its industrial application in high-quality new display scenarios such as premium TVs, commercial large screens, and automotive displays. On the other hand, TCL Huaxing will provide full empowerment in manufacturing, technology, and marketing, synergize with the company’s existing businesses and technical resources in direct display, automotive applications, and backlighting, introduce major customer resources, enhance product competitiveness and scale effects, and improve profitability.
According to public information, Fujian Zhaoyuan Optoelectronics Co., Ltd. was founded in 2011, focusing on the R&D, production, and sales of LED epitaxial wafers and LED chips. It boasts a complete LED chip production line, large-scale production capacity, and solid business foundation. The company has achieved industry-leading status in high-value fields such as backlighting, Mini LED direct display, and automotive lighting, with distinctive competitive advantages.
Industry analysts pointed out that the current LED industry is in a trough period due to the sluggish LED lighting market. Fierce price competition in LED chips has eroded industry profits, and the valuation of related enterprises remains low, making it an opportune time for acquisitions.
Previously, TCL Huaxing, a subsidiary of TCL Technology, entered into a strategic cooperation with Sanan Optoelectronics, a leading domestic LED chip enterprise, and jointly established Xinying Semiconductor in Xiamen, completing the construction of a Micro LED pilot production line. With the acquisition of Fujian Zhaoyuan Optoelectronics, TCL Technology can now achieve full industrial chain coverage for MLED, enabling TCL to gain greater initiative in the new round of competition in MLED semiconductor displays and Mini LED TVs. However, its major competitors have also acquired LED chip companies for early deployment, which will further drive the increasingly prominent trend of integration between the new display industry and the LED chip industry.
(Reprinted from https://news.eccn.com/）