Samsung approves LCD spin-off; focus shifts to OLED

Samsung plans to spin-off its loss-making LCD business into a separate entity later this year, as it shifts its focus to OLED televisions.
Written by Zack Whittaker, Contributor

Samsung's board has moved closer to spinning off its loss-making LCD unit after its board of directors approved in majority a plan to spin off the business, the BBC reports.

From April 1st, Samsung will spin off the unit to create the Samsung Display Company Ltd., as an entirely separate entity. Shareholders have yet to approve the decision, however.

But the end of the road for the spin-off company is not being forecast yet, however. It is thought that it could eventually merge with the Samsung Mobile Display venture that makes OLED televisions, which use a fraction of the energy for a better output display.

While OLED devices were initially thought for the home television consumer market, such screens have been making their way to mobile phones and handheld devices.

The LCD television sector is expected to suffer an annual global sales decrease by 8 percent by 2015, reports Reuters, while OLED televisions could reach $20 billion by 2018, accounting for 16 percent of the market, up from 4 percent today.

The separate company will receive 750 billion won ($667 million) in capital, after the LCD division in its present form lost the same amount in operational costs last year.

Sony agreed to leave its LCD joint venture with Samsung in December last year, while Sharp halved its LCD output for the first quarter of this year. Sony, Sharp, and Panasonic, as the major players in the LCD business, expect to lose $17 billion this year alone.

While Samsung is the world's largest television and flat-screen maker, an industry slowdown will likely hit profits further.

(via Reuters, BBC)


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