The government of South Korea has reportedly approved Samsung and LG Display's applications to build LCD panel plants in China, on condition that they can prevent technology drains to Chinese rivals.

The announcement published by South Korea's presidential office stated that considering the development demands of South Korean enterprises in the rapidly growing Chinese LCD market and to enhance the business cooperation between the two countries, the South Korean government has approved plans to export its TFT-LCD technology to China.

However, the government said Samsung and LG Display are allowed to launch LCD plants in mainland China on condition that the should provide related measures to prevent technology drain. According to the law of South Korea, the government has the right to block the transfer of key technologies.

This approval provides a reference for Samsung's establishment of a plant in Suzhou and LG Display in Guangzhou. Samsung said in October 2009 that it plans to invest about USD2.21 billion to set up a joint venture in Suzhou for the production of 7.5-generation LCD panels. LG Display also said that it will invest about USD4 billion to set up an eighth-generation LCD joint venture in China.