Samsung Electronics is apparently considering spinning off its LCD division in a bid to streamline its business, jettison their loss making ventures and focus on more lucrative next-generation panel technology.
Sony’s decision in December to pull out of their joint venture with Samsung after eight years of consecutive losses likely increased the pressure on the South Korean giant to make a decision about its future. Their display panel business posted a loss of $891 million for 2011 amid falling panel prices and worldwide oversupply.
The world’s largest TV and flat-screen manufacturer is not the only company struggling to keep their LCD unit profitable though, as the industry is becoming increasingly dire for all LCD makers. South Korean rival LG and Japanese firm Sony have both been struggling to keep out of the red, as well as Panasonic, which recently announced it expected a record $10.2 billion annual loss for 2011.
"We are internally reviewing various options but nothing has been decided yet," Samsung spokesman James Chung said when speaking to Reuters. One option said to be under serious consideration is fully taking over its unlisted OLED manufacturing unit, Samsung Mobile Display (SMD), then merging it with the LCD business and converting some of the production over to OLED displays.
Analysts estimate Samsung’s OLED revenues will increase by a staggering 600 percent in the next two years, according to the BBC. Currently OLED technology features mainly in small devices like smartphones and tablets, but as production ramps up and world demand increases they will likely end up superseding LCD panels in a wide range of products including TVs.
Samsung is investing heavily in the OLED market, and recently announced a new partnership with Corning that will see their Lotus Glass used in upcoming products using OLED panels. Corning's Gorilla Glass is a cover glass for the exterior of display devices, while Lotus Glass is a glass substrate that can enable cutting-edge technologies including OLED and next generation LCD panels. They serve different purposes. Therefore, many electronic devices could feature both Corning Gorilla Glass and Corning Lotus Glass.
Editor's Note (Feb. 17): edited last paragraph for accuracy.