Samsung Display, the TV manufacturing unit of Samsung Group, is shutting down its liquid-crystal display (LCD) business in June due to falling prices of LCD panels and stiff competition from Chinese and Taiwanese companies that are selling cheaper products, according to industry sources, reported Korea Times.
The shutdown means Samsung Display will not make LCD panels for TV screens and will focus on organic light-emitting diode (OLED) and quantum dot (QD) displays. Workers in the LCD businesses are expected to be transferred to the QD display business, as per the report.
The Samsung company was planning to exit the LCD display business last year but postponed the plan until the end of 2022 due to an unexpected increase in demand for TVs last year. According to the report, Samsung Display was forced to decide on the future of its LCD business six months before the planned exit due to losses triggered by the recent fall in LCD prices.
A May report by market research firm Omdia also shows that LCD TV open-cell prices crashed to a new low this month across all segments be it 43-inch FHD or 75-inch UHD TVs. "Panel buyers are requesting further price reductions in June, and panel makers face strong pressure to reach agreements in their price negotiations with TV brands and OEMs," the report stated.
Its biggest customer Samsung Electronics had also cut dependence on the unit and signed deals with Chinese company BOE to provide displays for smartphones and TVs.
BOE was the leading supplier of LCD panels accounting for over 20% of the market, ahead of LG, as of 2020, according to a Statista report, published in March.
Due to the pandemic-led shortage of components and rising inflation, Samsung is expected to miss its smartphone production target for this year. Though Samsung has not said anything officially on this, according to a report by South Korea’s Maeil Business News, the company is expected to cut down production by 30 million units in 2022. Apple too had decided to drop plans to make additional 20 million phones in 2022, according to a Bloomberg report.