Why LG Group Could Be the Biggest Winner of US-China Decoupling

🌏 US-China Decoupling: A Golden Opportunity for LG

As the US-China rivalry intensifies, American tech giants are actively excluding Chinese companies from their supply chains. At the center of this massive shift stands LG Group.

US Big Tech companies like Google, Microsoft, and Meta are primarily design-focused firms. They don't manufacture products themselves—someone needs to turn their designs into reality.

🍎 Apple's Dilemma, LG's Opportunity

Take Apple as an example. They've historically played Korean companies like LG Innotek, LG Display, and LG Electronics against Chinese competitors to maximize margins. That's how a smartphone company achieves 30%+ profit margins.

But when the Trump administration summoned Tim Cook to the White House demanding China decoupling, everything changed. If you exclude China, who's left?

Samsung? Awkward—they're direct competitors with Galaxy
LG? Perfect—they exited the smartphone business, so no conflict of interest

This is where LG Group could become the TSMC of consumer electronics—a foundry for US Big Tech.

📈 The Rally Has Already Begun

Based on this analysis, investing in LG Group stocks from their lows in late May to early June yielded:

LG Innotek: Nearly doubled
LG Display: Solid gains
LG Electronics: Steady uptrend

🏭 LG's Strategy: Stable B2B Growth

Look closely at LG's business portfolio and a clear pattern emerges:

Automotive components - No consumer branding
Batteries - No consumer branding
Smartphones - Completely exited

LG is systematically withdrawing from direct consumer competition. Instead, they're focusing on being a critical component supplier to US Big Tech—a foundry model.

Benefits of this strategy:

Reduced marketing expenses
Stable B2B revenue structure
No competition with major clients

🧪 Why LG Chem Deserves Attention

LG Chem owns 81% of LG Energy Solution. But why was it undervalued?

Until recently, it was merely book value. LG Energy Solution wasn't paying dividends, and LG Chem wasn't utilizing this stake for shareholder returns.

That's changing now. LG Chem announced plans to leverage its LG Energy Solution stake for dividends. The dormant asset is coming alive.

🎯 Investment Thesis

Decoupling beneficiary: Korea is the only alternative when China is excluded
No conflicts: Smartphone exit enables Apple partnership
Stable growth: Transition to B2B foundry model
Valuation: Still undervalued due to lingering China competition fears

When stocks were crushed on fears of losing to Chinese competition—that was the opportunity. The big picture thesis remains intact.