Samsung Electronics’ board of directors has this week given its approval to plans for a spin-off of the technology giant’s Liquid Crystal Display Unit, bringing the company one step closer to realigning its TV business. Following the approval, the spun-off division is set to be relaunched as a new corporation at the start of April this year under the name Samsung Display Company Ltd. However, the move does still require shareholder approval.
|Samsung board sanctions LCD arm spin-off to focus on OLED|
Falling demand and plummeting profits on its LCD products have prompted Samsung to take this step to spin off its LCD division. Many of its global rivals have also been experiencing similar problems with LCD products including HDTVs over recent years. The company said that it is still very keen to maintain an edge over its competitors, and with this in mind it will be focusing heavily on new display technologies such as OLED TVs.
Donggun Park, executive vice president and head of Samsung’s LCD business, said that the move means that the Korean manufacturer will be able to make business decisions far more quickly, and also respond to the needs of clients more speedily. He added that the firm will continue to provide superior service and products for the market through “enhancements in business competitiveness”.
A combination of increased supply and falling demand in the LCD sector has seen many companies, including Samsung, face a challenging time recently, and many manufacturers have ended up slashing their prices to try and attract more customers. According to industry analysts, many consumer electronics makers have been adversely affected because the sector has lost its “niche factor”. Jasper Kim, chief executive and founder of Asia-Pacific Global Research Group, explained that whilst LCD was at the cutting edge of technology at one stage, it has now become a commoditised business.