Samsung Considers Merging LCD And OLED Businesses

Samsung Electronics has said that it is considering options for its LCD business amid a market slump and shift toward OLED displays.

Suggestions have been made that the division could be spun off as the company plans to focus efforts on OLED displays manufactured by Samsung Mobile Display, a joint venture with its subsidiary, Samsung SDI.

LCD future unclear

“We are internally reviewing various options but nothing has been decided yet,” said Samsung spokesman James Chung. The company’s LCD manufacturing operation made an operating loss of 750 billion won (£426m) last year according to Bloomberg.

The LCD market has generally been in dire straits in South Korea and Japan, with Sony, Sharp and LG Display all suffering. Late last year, Sony pulled out of a joint venture with Samsung to produce S-LCD displays, contributing to the Japanese company’s continued losses in their TV division.

The idea of Samsung merging their struggling display business with their booming OLED arm has been strongly touted by analysts.

“A spin-off will allow Samsung to focus more on OLED and also broaden its LCD customer base to companies that have shunned Samsung due to the fact that they are in direct competition with it in finished products such as televisions and computers,” said Seo Won-seok, an analyst at Korea Investment & Securities, speaking to Reuters.

According to a report from NPD DisplaySearch, OLED displays from Samsung Mobile Display produced revenues in excess of $4 billion (£2.5bn) for 2011 and could be earning as much as $20bn (£12.6bn) by 2018. Samsung has already shown its committment to moving forward with the technology by partnering with Corning, the makers of Gorilla Glass, to produce tougher OLED displays for TVs and smartphones.