Seoul: Samsung Electronics Co said on Wednesday that it was considering spinning off its loss-making LCD flat-screen business in a surprise move as it seeks to orient its components business to more profitable OLED displays.
Many analysts had expected Samsung Electronics would take direct full control of its OLED flat-screen business and merge it with the LCD operation to utilise part of LCD production capacity in making more profitable OLED displays.
The LCD industry has been mired in a slump since the second half of 2010 and looks set to become a low-growth commodity type technology with greater competition from low-cost Chinese manufacturers, according to industry studies.
Samsung ended its liquid crystal display (LCD) joint venture with Sony Corp recently.
Samsung and other companies such as LG Display Co are shifting to a newer type of flat-screen display called organic light-emitting diode (OLED), which is used mainly in high-end smartphones as they believe the new technology will replace LCD in larger-sized panels such as TV screens.
Samsung Electronics said earlier this month it was considering fully taking over Samsung Mobile Display (SMD), its OLED joint venture with its Samsung SDI subsidiary.
"A spin-off will allow Samsung to focus more on OLED and also broaden its LCD customer base to companies that have shunned Samsung due to the fact that they are in direct competition with it in finished products such as televisions and computers," Seo Won-seok, an analyst at Koresa Investment & Securities.