Samsung Electronics said it will spin off its unprofitable LCD division as the company focuses on making thinner and brighter TVs.

The new company, provisionally named Samsung Display Co., will be set up April 1 with paid-in capital of 750 billion won ($668 million), Samsung said today.

Samsung is shifting its focus towards new generation OLED display technology.

"Currently, the display market is undergoing rapid changes with OLED panels expected to fast replace LCD panels to become the mainstream. Amid this structural change of the display industry, adopting measures for change and innovation, including business restructuring, are essential to improve our competiveness for our Display business," Samsung said in a statement.

"In this regards, first, the LCD business will be spun off from Samsung Electronics and become a new corporation (wholly-owned subsidiary of Samsung Electronics). Then, going forward, the new corporation will consider adopting various restructuring measures including a merger with Samsung Mobile Display and S-LCD Corporation," the company added.

Annual global sales of LCD TVs will contract by 8 percent to $92 billion by 2015, flat panel industry research company DisplaySearch has forecast, while the OLED display market could top $20 billion by 2018, accounting for 16 percent of the total display industry, up from a current 4 percent.

Sony had agreed to exit its LCD joint venture with Samsung in December, while Sharp said it would halve LCD output for January-March at a plant in western Japan.

Samsung and rival LG Display Co are shifting to newer organic light-emitting diode (OLED) flat-screen display currently used mainly in high-end smartphones.

Samsung said it aimed to be more competitive in a rapidly changing market with the new technology and a more streamlined decision-making process.

On February 20, 2012, the BOD of Samsung Electronics also approved the merger with Samsung LED, Ltd. Samsung LED, Co, Ltd. will be merged into Samsung Electronics by way of small-scale merger and be dissolved following the merger.