CIE Components in Electronics
According to analysts Samsung had been expected to take full direct control of its OLED flat-screen business and merge it with its LCD operation in order to use part of the LCD production capacity it has in making the more profitable new displays.
The news that it is considering selling the entire operation highlights the severe market conditions currently faced by the industry.
Rivals LG Display and Sharp have both reported or forecast losses as a slump in TV sales has hit production. Samsung also ended its liquid crystal display (LCD) joint venture with Sony Corp recently.
Some analysts believe that a spin-off will allow the company to focus on OLED and broaden its LCD customer base to those companies that have been in direct competition with it in terms of finished products, whether televisions or computers.
Apple, for example, is in direct competition with the South Korean firm in smartphones and oftern uses Samsung”s main rival LG Display to supply of panels for its iPhone and iPad products.
Its estimated that Samsung, the world”s biggest TV maker, currently sources 40 percent of its panel requirement internally and buys the rest from the likes of AU Optronics Corp, Chimei Innolux and Sharp Corp. A spin-off could have a negative impact on Taiwanese LCD makers as Samsung could shift even more production internally.
Samsung and other companies are moving to a newer type of flat-screen display called organic light-emitting diode (OLED), which is currently used mainly in high-end smartphones. They believe the technology will replace LCD in larger-sized panels such as TV screens.
Samsung Electronics said earlier this month it was considering taking over Samsung Mobile Display (SMD), its OLED joint venture with its Samsung SDI subsidiary, however, the costs could be prohibitive and if it does decide to transfer its LCD business to the OLED maker it could end up taking a significant number of new SMD shares.
Samsung is competing with LG Display for the title of the world”s top maker of LCD flat-screens, and is estimated to have lost more than 1 trillion won ($890 million) from LCD last year on sales of 23 trillion won ($20.5 billion).
