Samsung Display to split OLED from ‘unprofitable’ LCD business
Mon 4 Jul 2016
Samsung Display is splitting off its organic light-emitting diode (OLED) production unit in an attempt to realign strategy in the face of a less profitable liquid crystal display (LCD) business.
‘Samsung Display separated the company’s OLED business division and more of Samsung Display’s workforce joined the OLED business unit. The latest decision was part of the ongoing Samsung Group-initiated efforts to restructure unprofitable businesses,’ a Samsung representative told the Korean Times.
‘Now, Samsung is initiating an exit strategy for LCDs, which are no longer promising and have become unprofitable,’ added the official.
Mainly due to this flailing LCD unit, Samsung Display recorded an operating loss of 0.27 trillion won (approx. £177 million) in the first quarter this year. It quoted a ‘sharp decline’ in LCD earnings.
According to those familiar with the plans, Samsung is turning its efforts from LCD to OLEDs for small and medium-sized devices. With its contract with Apple to manufacture OLED screens for the new 2017 iPhones, as well as its own Galaxy line, Samsung is confident to retain its lead in the OLED market.
Samsung Electronics currently manages an 84.8% stake in Samsung Display, which is owned by Samsung senior vice chairman Kwon Oh-hyun. The executive suggested that Samsung Electronics would acquire the LCD business from Samsung Display to support its TV business.
‘Samsung Electronics has no imminent plans to invest more in OLED TVs as TVs based on LCD technology such as quantum dot displays are customized to keep Samsung plants operating given the manufacturing infrastructure,’ a fund manager from a U.S.-based investment in Seoul, told the Korea Times.
‘The OLED trend is for real. OLED will be accounting for a third of all smartphone displays by 2018,’ commented security firm Nomura Securities. ‘Japanese companies have fallen behind the Korean majors in both technological development and mass production experience.’
Since publishing this article, Samsung Display has provided the following statement:
“The Korea Times’ article about ‘Samsung spins off OLED business’ is incorrect. Samsung Display has never spun off OLED business and will try its best to develop and produce LCD and OLED products to enrich human-beings environment and improves the well-being of society, as one of the world-leading display companies.”