Is LG a Chinese Company? All You Need to Know in 2024
As a major global electronics company supplying everything from televisions and smartphones to home appliances and components, LG manufactures millions of products each year to meet growing consumer demand. But is LG actually a Chinese company? Despite operating factories in China, LG is proudly South Korean-owned.
LG relies significantly on Chinese manufacturing
LG has over 30 manufacturing facilities in China that employ over 65,000 people. These factories account for 21% of LG‘s global production capacity, as shown in the table below:
| Country | LG Manufacturing Facilities | Est. Employees | % of Production |
|---|---|---|---|
| China | 32 | 65,400 | 21% |
| South Korea | 33 | 81,200 | 31% |
| Vietnam | 16 | 60,200 | 15% |
| India | 6 | 8,500 | 4% |
| Poland | 2 | 6,900 | 3% |
| Mexico | 4 | 9,600 | 5% |
| Other | 35 | 51,200 | 21% |
Key LG products made in China include OLED TV panels through the company‘s partnership with BOE, as well as LCD panels, smartphones, washing machines, air conditioners and more. So while not wholly dependent on China, a significant portion of LG‘s global supply comes from Chinese factories.
But China‘s importance is decreasing
In 2019, 27% of LG‘s production took place in China – higher than the 21% today. Like many companies, LG has aimed to reduce its manufacturing footprint in China in recent years due to:
- Rising labor/regulatory costs
- Uncertainties from US-China trade tensions
- Desire to diversify risks related to supply chain disruption
LG has actively expanded production in alternative countries, especially Vietnam where 16 factories now produce phones, televisions, solar panels, batteries and other goods largely destined for export.
India and Brazil are increasingly important hubs for appliance manufacturing as LG adapts its supply chains for more regional production.
Is complete exit from China realistic?
Given China‘s strong supply chains and specialized manufacturing networks, a complete exit from the country would pose major challenges for LG across areas like:
Talent: China offers access to skilled, educated workforces for complex manufacturing. Replicating capabilities would take huge investment and many years.
Electronics supply chain: Dense component/materials distributors are a key reason why electronics producers base vast operations in China. Without them, costs rise sharply.
As such, while relying less on China, LG still needs to operate significant-scale production in the country as part of globally distributed manufacturing operations. Attempting to leave China completely could damage business performance and continuity.
Conclusion: LG is staying in China, despite risks
In summary, LG relies strongly on Chinese manufacturing for around 21% of global production volume, especially for electronics like OLED TV panels. Reducing dependence on China in favor of countries like Vietnam is an increasing priority. Yet due to China‘s specialized talent, supply networks and infrastructure, LG also needs to maintain serious presence there for now – accepting the risks that poses amid trade/political tensions.
So is LG a Chinese company? No – it remains proudly South Korean-headquartered. But China does play an outsized role in enabling LG to cost-effectively produce millions of consumer products each year.
