Feb. 15 (Bloomberg) -- Samsung Electronics Co. said it is considering separating its liquid-crystal-display operations as the world’s largest television maker shifts focus to more profitable next-generation panels.
The company made the comments in a regulatory filing today after being asked by the stock exchange to respond to media reports about the plan. Chosun Ilbo reported yesterday the LCD business may be merged into Samsung Mobile Display, a venture set up by Samsung Electronics and Samsung SDI Co. to make organic light-emitting diode, or OLED, panels.
Samsung’s LCD business had an operating loss of 750 billion won ($668 million) last year amid slowing TV sales. Merging the LCD and OLED operations will help the company expand its next- generation display business by utilising LCD-manufacturing resources to boost OLED production, according to Korea Investment & Securities Co. and Hanwha Securities Co.
“The logic of combining LCD and OLED businesses is quite persuasive,” Ahn Seong Ho, a Seoul-based analyst at Hanwha wrote in a report today. “Samsung’s leadership in growing the OLED market will significantly be boosted.”
Samsung rose 5.1 percent to 1,135,000 won at the close of trading in Seoul, while the benchmark Kospi index gained 1.1 percent.
While OLED displays are mostly used in mobile devices including Samsung’s Galaxy smartphones, the Suwon, South Korea- based company and its closest rival LG Electronics Inc. are looking to use the technology in televisions, with a plan to start selling OLED sets as early as this year. The new models can be wafer thin and produce richer colors than LCD TVs.
The OLED display market may grow to more than $20 billion by 2018, accounting for about 16 percent of the overall panel industry, from an estimated $4 billion in 2011, according to Santa Clara, California-based DisplaySearch.
Samsung plans to spend 6.6 trillion on its display business this year, the company said last month. While the company didn’t elaborate on how the money will be spent, investment in LCDs won’t be “significant,” Robert Yi, senior vice president for investor relations, said on a conference call after the release of fourth-quarter earnings in January.
--Editors: Suresh Seshadri, Subramaniam Sharma
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