Samsung spins off LCD unit

South Korean giant spins off loss-making LCD unit so as to focus on new-generation OLED displays for TVs for future growth.

South Korean electronics giant Samsung has decided to spin off its loss-making LCD (liquid crystal display) television business unit into a wholly-owned subsidiary, in order to concentrate on OLED (organic-light-emitting diode) display technology.

Reuters reported
Monday that Samsung said it aimed to be more competitive in a rapidly changing market with the new technology and a more streamlined decision-making process. The spun-off LCD unit, provisionally named Samsung Display Co Ltd, will officially launch as a new business on Apr. 1 this year with 750 billion won (US$666.7 million) in capital, the company added.

The decision comes on the back of its LCD division suffering an operating loss of 750 billion won (US$666.7 million) in 2011, the report stated. Erstwhile partner Sony had also ended its LCD production joint venture last October after it sold its shares back to Samsung.

Demand for LCD displays have dimmed as shoppers in developed markets prefer flat-screen TVs and low-cost Chinese manufacturers have also intensified competition, stated Reuters.

The forecast from research company DisplaySearch showed that the slowdown in demand will continue too, with global LCD TV sales to shrink by 8 percent to US$92 billion by 2015. OLED display market, on the other hand, could top US$20 billion by 2018, increasing from the current 4 percent to 16 percent of the total display industry.

OLED flat-screen displays are currently typically used in high-end smartphones, and TV makers such as Samsung and LG Display are shifting to this technology which could eventually replace LCDs on larger-sized TV screens, the report pointed out.

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