February 20, 2012 — Samsung Electronics is under a swirl of rumors about spinning off its liquid crystal display (LCD) manufacturing division, which could lead into a displays business restructuring involving Samsung Mobile Display (AMOLED displays maker) and Samsung LCD.
If this hypothetical reorganization came to be, Samsung Displays would be the biggest display company covering the key flat panel display (FPD) technologies from small to large panels.
The root of this reorganization talk is how Samsung Electronics can make the transition from LCD to active-matrix organic light-emitting diode (AMOLED) displays most efficiently, holding on to its leading position in each technology while minimizing losses through manufacturing and procurement, as well as business synergies, including support of Samsung’s wide array of branded products and external sales.
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The LCD market has been in oversupply since Q2 2010, and panel makers have suffered losses. At the same time, AMOLED has matured and gained market acceptance. Panel makers are changing their strategies in order to reverse their losses, and with the most substantial resources in AMOLED, the Samsung group is moving fast to make big changes.
NPD DisplaySearch believes that Samsung’s LCD/AMOLED transistion timeline seems to be moving up; the restructuring could take place as soon as the middle of 2012.
Read NPD DisplaySearch’s blog post on the possible reorg, Will Samsung Spin Off its LCD Panel Division? What are the Possible Impacts? for a discussion of the reorganization method (merge OLED and LCD units, or spin off LCD first?), the impact on Samsung’s LCD customers with a change in its sales and component sourcing strategies, how changes would affect the market price for LCD panels, and what Samsung suppliers can expect.
David Hsieh is Vice President, Greater China Market at NPD DisplaySearch.
Yoonsung Chung is Director, Large-Area Displays & FPD Materials, NPD DisplaySearch.