Samsung Officially Spins Off LCD Business
February 20, 2012 10:06 AM
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The company will be called Samsung Display Co Ltd
Samsung has announced today that its board of directors has approved the spinoff of Samsung's LCD arm. The new company will be a wholly owned subsidiary of Samsung Electronics. Samsung also notes that moving forward, the new LCD company it has created will consider other restructuring measures such as a merger was Samsung Mobile Display and S-LCD Corporation.
This move comes at a time when profits are slipping significantly in LCD market. Samsung has been increasingly losing money on LCD screens even though it's the world's largest maker TVs. Samsung will shift its focus to new OLED panels moving forward, which are growing significantly and generating much larger profits.
Research company DisplaySearch estimates the global sales of LCD TVs are going to shrink by 8% to about $92 billion by 2015. At the same time, that OLED market is expected to grow to $20 billion by 2018 and make up 16% of the total display market. Today, OLED panels make up only 4% of the market.
The Samsung LCD spinoff is expected to be called Samsung Display Co Ltd and will be launched as new business on April 1. The company will have 750 billion won in capital according to Samsung. Samsung is positioned well in the OLED market with its Samsung Mobile Display providing almost all the OLED panels available. Samsung notes that the spinoff is still subject to regulators and the approval of shareholders.
In December of 2011, Sony split from the
LCD joint venture
it operated with Samsung due to poor profits. Other LCD manufacturers like Sharp have significantly reduced LCD output. Three of the top firms in LCD market -- Panasonic, Sony, and Sharp -- are together expected to lose $17 billion this year alone.
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2/20/2012 7:43:20 PM
While that very well may be, OLED is still in a stage where LCD was when the response time was still ~25 ms. Only here, it's longevity.
It'll be another decade before we'd see OLED take over LCD like LCD took over CRT. I won't dare speak of past 2020 though, by then it should be coming along nicely....
"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
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