Samsung Spins Off LCD Display Business
Samsung Display Co. will be launched April 1 with capital of $668 million and Samsung in control of all shares of the new business.Samsung Electronics announced it is spinning off its LCD manufacturing division as part of a restructuring of the companys display business to focus on displays with organic light-emitting diode (OLED) technology, which allows panels to be thinner, lighter and brighter. The new company, Samsung Display Co., will be launched April 1 with capital of $668 million and Samsung in control of all shares of the business. Research from IT analytics firm DisplaySearch finds that Samsungs LCD division is the biggest LCD panel maker in terms of revenues, and is a key supplier for all applications, not only for its own products, but also for many other brands, including Apples iPad, Lenovo and HPs PCs, and many TV makers. Also according to their research, Samsungs TV business sources over half of its LCD TV panels internally (57 percent in 2011, and plans call for 53 percent in 2012).
Samsung also purchases millions of panels internally for its notebooks, monitors and tablet PCs. Samsungs TV manufacturing has been increasing its vertical integration, purchasing more LCD cells/open cells, instead of LCD modules. Company analysts noted that if Samsung spins off its LCD business and merges it with SMD, the new company could use resources from LCDincluding revenues, cash flows, fabs and engineeringto move toward large-size active-matrix organic LED (AMOLED) production.
Established in April 2004, S-LCD manufactures LCD panels for both its parent companies, contributing to the expansion of the respective parties' TV businesses and the large-sized LCD TV market overall. However, the companies determined that LCD panel and TV market conditions have changed since they forged the deal. To respond to such challenging conditions and to strengthen their respective market competitiveness, the two companies agreed to shift to a new LCD panel business alliance.