RE: Stallings,

HQ H357904 October 15, 2026 OT:RR:CTF:VS H357904 ME CATEGORY: Origin Rachel Stallings FNS Customs Broker, Inc. 3235 Satellite Blvd Building 400, Suite 675 Duluth, GA 30096 Country of Origin of TFT LCD Module RE: Stallings, Dear Ms. This is in response to your February 10, 2026, letter on behalf of LG Display America, (“LGDA”), requesting a country-of-origin determination for their product, the Thin Film Transistor Liquid Crystal Display Module (“TFT LCD Module”), for use in laptop computers. italics and all attachments to this request will not The information contained within brackets in be released to the public and will be withheld from published versions of this decision. FACTS: LGDA is a U.S. subsidiary of South Korean-based LG Display (“LGD”), a major producer of televisions and monitors. At issue here is the TFT LCD Module, a screen panel designed for installation on a laptop monitor. LGD produces the LCD cell assembly in South Korea. LGD then sells the LCD cell assembly to its Chinese subsidiary, LG Display China assembly. (“LDGC”), which then produces the final TFT LCD Module using the LCD cell LDGC then sells the TFT LCD Module to LGD, which in turn sells it to LGDA. LGDA argues that the TFT LCD Module is a product of South Korea, because it derives its commercial identity from the LCD cell assembly, which performs the visual display function of the device. LGDA states that: 1
“[T]he LCD cell assembly is designed and manufactured for a specific and predetermined use as the display panel of a TFT LCD module. Its essential characteristics—including pixel structure, resolution, and image-forming capability—are fully established prior to importation into China. The subsequent assembly operations performed in China integrate supporting components, such as the driver [integrated circuit (“driver IC”), control printed circuit board (“PCB”)], and backlight unit, but do not alter the fundamental character or use of the [liquid crystal display (“LCD”)] cell.” Based on information submitted by LGDA, the manufacturing process for the TFT LCD Module is as follows: • The TFT array, color filter, and liquid crystal cells are manufactured in South Korea, through “multiple specialized and capital-intensive fabrication processes.” o The TFT array is produced through a patterning process by placing five layers of components, the gate electrode, insulator and semiconductor, data electrode, passivation, and pixel electrode, onto a glass substrate. Each layer is created by a five-step process: deposition, cleaning, photo process, etching, strip, and inspection. o The color filter is similarly produced through a patterning process by placing four layers of components, the black matrix, red, green, and blue layers, overcoat-IT, and column spacer onto a glass substrate. Each layer is created by a five-step process: deposition, cleaning, photo process, etching, strip, and inspection. • The TFT array and color filter are cleaned, aligned, and mechanically bonded together using silver paste, adhesive sealant, and liquid crystal to create the LCD cell. The display sheets are then cut into individual units and undergo inspection. • In China, the LCD cell is cleaned, polarizing films are attached to the front and back of the panel, the driver IC is attached to the LCD cell’s panel pad, and the PCB is attached to the driver IC. The LCD cell is then assembled with the Chinese-origin backlight unit into the chassis for the screen, and the device is powered on to stabilize the liquid crystal and initial defect filtering. The finished TFT LCD Module is then inspected, packaged and shipped. LGDA also provided a cost breakdown for the TFT LCD Module. The material cost for the device was listed at $[XX.XXX], of which $[XX.XXX] (86.3%) of the components were used in the Chinese operations and $[X.XXX] (13.6%) were used in the South Korean operations. Of the $[XX.XXX] of materials used in the Chinese assembly, $[XX.XXX] of the components were listed as Chinese-origin, $[X.XXX] as Japanese-origin, $[XX.XXX] as South Korean-origin, and $[X.XXX] as Taiwanese-origin. For the components used in the South Korean operations, $[X.XXX] was listed as Japanese-origin and $[X.XXX] as South Korean- origin. The total labor cost was listed at $[XX.XXX], with $[X.XXX] (36%) of the labor cost taking place in China, and $[XX.XXX] (64%) of the labor cost in South Korea. The combined cost of labor and materials was listed at $[XX.XXX] (72.2%) for the operations in China, and $[XX.XXX] (27.8%) for the operations in South Korea. With this, LGDA provided a bill of materials spreadsheet, with cost breakdown for each component and labor operation. ISSUE: What is the country of origin of the TFT LCD Module? 2
LAW AND ANALYSIS: When determining the country of origin for purposes of applying current trade remedies, the substantial transformation analysis is applicable. The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character, or use different from that possessed by the article prior to processing. See Texas Instruments, Inc. v. United States, 69 CCPA 151 (1982). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). In deciding whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. See Belcrest Linens v. United States, 6 CIT 204, 573 F. Supp. 1149 (1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations that are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. Factors which may be relevant in this evaluation may include the nature of the operation (including the number of components assembled), the number of different operations involved, and whether a significant period of time, skill, detail, and quality control are necessary for the assembly operation. See C.S.D. 80- 111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, and C.S.D. 90-97. Additionally, factors such as the resources expended on product design and development, the extent and nature of post-assembly inspection and testing procedures, and worker skill required during the actual manufacturing process will be considered when determining whether a substantial transformation has occurred. No one factor is determinative. Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (Ct. Int’l Trade 2016), involved manufacture of a flashlight in which all the components of the flashlight were of Chinese-origin, except for a white LED and a hydrogen getter. The components were imported into the United States and assembled into the finished Generation II flashlight. The Energizer Battery court applied the “name, character and use” test to determine whether a substantial transformation had occurred and noted, citing Uniroyal, Inc. v. United States, 542 F. Supp. 1026, 1031 (Ct. Int’l Trade 1982), that when “the post-importation processing consists of assembly, courts have been reluctant to find a change in character, particularly when the imported articles do not undergo a physical change.” Energizer Battery at 1318. In addition, the court noted that “when the end-use was pre-determined at the time of importation, courts have generally not found a change in use.” Energizer Battery at 1319, citing as an example, National Hand Tool Corp. v. United States, 16 C.I.T. 308, 312 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). Further, courts have considered the nature of the assembly, i.e., whether it is a simple or complex assembly, such that individual parts lose their separate identities and become integral parts of a new article. Energizer Battery, 190 F. Supp. 3d 1308. Regarding LCD screens, CBP has consistently held that when used in TFT LCD Modules, the LCD cell has a predetermined end use and imparts “the essential functional component” of an LCD screen, therefore any subsequent assembly into a TFT LCD Module does not result in a substantial transformation. For instance, in Headquarters Ruling (“HQ”) H315393, 3
dated December 10, 2020, CBP found that the assembly of Taiwanese-origin LCD cell assembly, integrated circuit, and touchscreen, into a TFT LCD Module “is not complex enough to substantially transform either item into a new and different article of commerce.” See also New York Ruling (“NY”) N314109, September 14, 2020; NY N308429, dated January 10, 2020; NY N308430, dated January 10, 2020; and NY N235963, dated March 11, 2025. CBP has also issued country of origin rulings for more complex LCD devices. For instance, in H015324, dated April 23, 2008, CBP was asked to determine the country of origin of stereoscopic displays assembled in the U.S. from non-U.S. parts. The displays consisted of two LCD monitors from China or Taiwan, mounted in a custom-made stand with a special beamsplitter mirror mounted at a bisecting angle between the two monitors. A graphics card in the computer separately transmitted right eye and left eye video. The importer would send one of the monitors to a third-party in the U.S. for an optical transformation process, after which the displays would be assembled, aligned, and tested. CBP found that extensive processing performed in the United States resulted in a substantial transformation. Specifically, CBP noted that “the polarization process performed in the United States changes the essential character of the LCD, as the polarization feature of the LCD imparts the stereoscopic functionality to the entire system.” Furthermore, the “assembly, testing, and alignment of the two LCD monitors and the beamsplitter mirror to form the stereoscopic display require a significant amount of time and precision by skilled technicians.” In the instant case, based on the totality of the circumstances and consistent with the pertinent authorities, we find that the LCD cell assembly imparts the “character” of the TFT LCD Module, and is not substantially transformed during its final assembly in China. The production process in South Korea is significant and renders the end-use of the LCD cell assembly predetermined, as it could not be used for any purpose than a display. In South Korea, the LCD cell assembly is produced by a complex patterning process, using specialized equipment to place multiple layers of components onto the TFT array and color filter, and mechanically bind them together. As in H015324, this requires a significant amount of time and precision by skilled technicians, to align and assemble each of the five layers of components in a five-step process, and cut them into individual sheets. In contrast, the assembly performed in China is far less complex. The LCD cell assembly, PCB, driver IC, and backlight unit are largely finished products, which are connected together and assembled into the chassis. The operations do not require the same degree of technical expertise or specialized equipment used in South Korea. This is clear in LGDA’s breakdown of labor cost, which shows only 36% of the cost of labor takes place in China, compared to 64% in South Korea. The display functionality of the finished LCD screen is also primarily the result of the LCD cell assembly, not the additional components added in China. The PCB, driver IC, and backlight unit provide image conversion, power and lighting to the display, but they do not generate or display images. The completed LCD cell assembly includes the main display elements of the LCD screen, which contain the “character” of the finished TFT LCD Module. The operations in China do not transform the LCD cell assembly into a new and different article of commerce with a different name, character, and use. Therefore, consistent with HQ H315393, we agree that the final assembly of the LCD cell assembly into a TFT LCD Module does not result in a substantial transformation. 4
HOLDING: Based on the information outlined above, the TFT LCD Module is a product of South Korea and is not substantially transformed by its final assembly in China. Sincerely, Monika R. Brenner, Chief Valuation & Special Programs Branch 5