|Samsung approves LCD spin-off; focus shifts to OLED|
Summary: 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.
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)
Samsung spins off LCD business for OLED push
Samsung has confirmed plans to spin off its LCD TV and monitor division into a distinct new company, Samsung Display.
Echoing its rival LG Electronics, which has been operating LG Display for its TV and monitor systems for quite some time, the secondary company will be formally launched on the 1st of April this year. "The spin-off will allow us to make quicker business decisions and respond to our clients' needs more swiftly", claimed Samsung's Donggun Park, current head of the company's LCD business unit and the man most likely to head up the spin-off company.
The new company will take control of all liquid-crystal display (LCD) products produced by the company. This includes standard and LED-backlit HDTVs, PC monitors and display panels for projectors, smarphones, cameras and tablets.
The move comes as consumer demand for LCD technology falls, while improved production methods and increased yields make it possible for companies to produce their own LCD panels quickly and easily. As a result, Samsung is seeing reduced demand and increased competition - a deadly combination.
The company won't be spinning off all of its display technologies, however: initial indications are that Samsung Display will concentrate on LCD-based technologies, while parent company Samsung will further develop its popular organic light-emitting diode (OLED) technology.
Currently used in the company's high-end smartphones, OLED panels offer several advantages over their LCD counterparts. As well as a lower power draw, an OLED display is thinner than an LCD while offering greatly increased brightness and contrast levels.
The cost and complexity of producing OLED panels has led to the technology being used only for small-scale devices like smartphones, however, but Samsung began showing off a 55in OLED HDTV at CES which it plans to launch commercially later this year. It's not the only one, however: rival LG announced a similar model of its own at the same show.
With Samsung betting heavily on OLED over LCD, the chances are good that its competitors will be watching closely to see if the gamble pays off.
Author: Gareth Halfacree