Friday, July 21, 2017
Search
  
Submit your own News for
inclusion in our Site.
Click here...
Breaking News
Intel Introduces Movidius Neural Compute Stick
TSMC InFO packaging Enters Second Generation
Samsung Display to Provide OLED panels to Xiaomi
Qualcomm Profit Forecast Disappoints Amid Apple Legal Battles
Google Embrace News Feed on Mobile With Personalized 'Feed'
iPhone Manufacturers Accuse Qualcomm of Antitrust Violations
Toshiba Resumed Blocking Western Digital Access to JV Database
Samsung kicks off English-language Bixby Voice Service
Active Discussions
Which of these DVD media are the best, most durable?
How to back up a PS2 DL game
Copy a protected DVD?
roxio issues with xp pro
Help make DVDInfoPro better with dvdinfomantis!!!
menu making
Optiarc AD-7260S review
cdrw trouble
 Home > News > General Computing > Impacts...
Last 7 Days News : SU MO TU WE TH FR SA All News

Thursday, February 16, 2012
Impacts Of Possible Samsung Spin Off Of Its LCD Panel Division


Reports on rumors that Samsung Electronics is considering spinning off its LCD manufacturing division are starting to be published, and DisplaySearch discussed the possible impacts of this action.

There is speculation that such a spin-off could be the first step of a restructuring of Samsung?s display business, with the end goal, a new Samsung Display company consisting of Samsung Mobile Display (SMD, an independent company that is the leading manufacturer of AMOLED displays) and Samsung LCD. This new company could be the biggest display company covering the key flat panel technologies from small to large sizes.

Samsung Electronics is considering how to make the transition from LCD to AMOLED in the most efficient way possible, by holding on to its leading position in each technology while minimizing losses through manufacturing and procurement, as well as business synergies, including support of Samsung's wide array of branded products (TVs, monitors, notebook and tablet PCs, smartphones) and external sales. What is new is that the timeline seems to be moving up, and the restructuring could take place as soon as the middle of 2012.

"However, it is surprising to consider that Samsung might not merge the OLED business into its LCD business, but rather spin off its LCD business and then merge it with the OLED business. This is a subtle but important difference, reflecting a significant change in Samsung's flat panel strategy, putting LCD and OLED in an equal position," said David Hsieh Vice President, Greater China Market at Display Research.

DisplaySearch's research finds that Samsung's 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 to many other brands, including Apple's iPad, Lenovo and HP's PCs, and many TV makers. A stand-alone Samsung LCD will mean a change in its sales and component sourcing strategies, because it?s strategy would need to be focused on profitability, rather than supporting the broader Samsung Electronics strategy, so it should maximize its customer base. In this sense, the new company is likely to care more for non-Samsung customers, and act as an independent and neutral LCD and AMOLED supplier. The new company would continue to be an important supplier of the LCDs and OLEDs needed by the Samsung group, but it will have to live on its own financials, which will have an impact on market prices for panels.

Also according to the company's research, Samsung's TV business sources over half of its LCD TV panels internally (57% in 2011, and plans call for 53% in 2012). Samsung also purchases millions of panels internally for its notebooks, monitors, and tablet PCs. Samsung's TV manufacturing has been increasing its vertical integration, purchasing more LCD cells/open cells instead of LCD modules. If the LCD business is spun off, it could be easier for Samsung to shift panel purchasing toward competitors in Taiwan, Japan or even China. In the past, Taiwanese panel makers often had lower utilization rates than Samsung, because Samsung tended to prioritize its own LCD production during times of oversupply. The spin-off may change this dynamic.

Another aspect of Samsung's vertical integration has been in supporting component, materials, and equipment suppliers. As an independent, the new company will likely put great pressure on its suppliers in order to drive down its costs. This could involve purchasing from non-Samsung suppliers, especially in semiconductor parts, mechanicals, chemicals, optical films and possibly even glass substrates.

If Samsung spins off its LCD business and merges it with SMD, the new company could utilize resources from LCD - including revenues, cash flows, fabs and engineering - to move toward large size AMOLED production. "This would be an indication that the future display direction of the Samsung group is AMOLED rather than LCD. For Samsung Electronics, spinning off its LCD business would likely improve its financial metrics, because the LCD division has been losing money due to ongoing large capital expenditures and falling panel prices. The flip side of this is that ? in order to fund investments needed for AMOLED - the new company will need new funding sources, including a public listing, since it will be an independent company without the financial support of Samsung Electronics," Hsieh commented.

The LCD market has been in oversupply since Q2'10, and panel makers have suffered losses during that time. At the same time, AMOLED has matured and gained market acceptance. Panel makers are changing their strategies in order to reverse their losses, and with the most substantial resources in AMOLED, the Samsung group is moving fast to make big changes. A spin-off of the LCD division will not be the end, but rather the beginning of another big transition in the display industry.


Previous
Next
Plextor "PLEXEASY" DVD Burner Launches In Europe        All News        Xbox 360 System Update Rolling Out
Court: Social Networks Can't Monitor Users To Combat Piracy     General Computing News      MSN Launches msnNOW

Get RSS feed Easy Print E-Mail this Message

Related News
Samsung Pay Gets Paypal Support
Samsung Debuts First Cinema LED Display
Samsung Galaxy A7 Smartphone Released
Samsung and TSMC Are Playing Catch-up to Make the Smallest Chip
Samsung and LG Benefit From High OLED Demand but Strategy Shifts May be Required
Memory Prices Boost Samsung's Record Q2 Profit, Plans Smart Speaker
Samsung releases Rose Pink Edition of the Galaxy S8+
Samsung to Open $380 Million Home Appliance Manufacturing Plant in South Carolina
Samsung Foundry Focuses on 6nm Process to Beat TSMC
Smart Switch App Lets you Move Everything from your Old Phone to a Newer Galaxy Device
Samsung to Open Home Appliance Factory in South Carolina
Samsung Bundles a 24" USB-C monitor With Galaxy Book

Most Popular News
 
Home | News | All News | Reviews | Articles | Guides | Download | Expert Area | Forum | Site Info
Site best viewed at 1024x768+ - CDRINFO.COM 1998-2017 - All rights reserved -
Privacy policy - Contact Us .