이 기사는 2022년 03월 28일 08:00 thebell 에 표출된 기사입니다.

South Korea’s LG Electronics has completed a process to sell or shut down its smartphone production facilities abroad.

LG Electronics sold its smartphone manufacturing plants in Yantai and Qingdao, China, to China’s largest server manufacturer Inspur at the end of last year, according to industry source on Friday.

Inspur LG Digital Mobile Communications (LGEYT) in Yantai was recognized as other non-operating expenses on LG Electronics' book because there was a difference between an estimated recovery value and a book value of 24.9 billion won ($20 million) during the last year's impairment test.

Qingdao LG Inspur Digital Communication (LGEQD) also incurred other non-operating expenses of 7.9 billion won in the impairment test. The two Chinese subsidiaries incurred a total of 32.8 billion won of loss on valuation.

LGEYT and LGEQD are 7:3 joint ventures between LG Electronics and Inspur. The Korean tech giant has produced its smartphones mostly in China and Vietnam. Its Chinese subsidiaries had produced low-to-mid-priced smartphone models while its Vietnamese entity has produced premium phones. LG Electronics moved its high-priced smartphone production lines from Korea to the Vietnamese city of Hai Phong in 2019.

LG Electronics had its smartphone manufacturing facilities in four countries - Vietnam, India, Brazil and China - and started a process to withdraw from the mobile business in 2021. Starting with the Hai Phong Campus, the company has completed the conversion of smartphone factories in India and Brazil to production lines for various products like home appliances, TVs, laptops and monitors.

The company had reviewed an option to sell plants in Vietnam and Brazil, but failed to draw sufficient demands.

The sale of Chinese subsidiaries has been carried out smoothly thanks to LG Electronics' solid partnership with Inspur since 2001. Especially, LG Electronics’ core mobile technologies such as f5G mobile communication weren’t included in the deal.

LG Electronics had considered a plan to sell its mobile communication division to global companies like Google, Facebook and Volkswagen, but scrapped the plan to prevent leakage of core technologies. According to Derwent, LG Electronics had 2,396 smartphone-related patents were in Korea, 2,162 in the U.S., and 646 in China, which are more than Apple’s 380 in Korea, 2,529 in the U.S. and 519 in China. (Reporting by Hyun-ji Sohn)