First Task

The hybrid PDP TV 5 Series launched by Samsung Electronics in 2010.
The hybrid PDP TV 5 Series launched by Samsung Electronics in 2010.

 

The task force for the merger between Samsung SDI and Cheil Industries has been put into operation. Much attention is being paid to the future direction of the Samsung Group’s plasma display panel (PDP) business.

PDP modules accounted for no less than one-third of the total sales of Samsung SDI last year. However, the industry itself is on the decline around the world due to the presence of LCD. Matsushita, which dominated the sector with its Panasonic brand, decided to get out of the business last year. This is why industry insiders are considering the merger as a preparation for Samsung SDI’s withdrawal from the PDP business.

Samsung SDI’s PDP capacity utilization stood at 80 percent in 2013, decreased by 12 percentage points in just one year. The capacity ratio had been as high as 94 percent four years ago. Still, its global market share hit a new high at 60 percent last year, in spite of the reduced operation ratio. This implies that the global PDP market is shrinking at a much faster pace.

The company had to suffer a decrease in sales, too. Its PDP sales fell from 2.378 trillion won (US$2.288 billion) to 1.660 trillion won (US$1.597 billion) between 2012 and 2013. The total exports, which used to remain over the one trillion won mark, dipped below 700 billion won (US$673 million) last year, while the domestic supply amount plummeted from 1.5 trillion won to around 900 billion won (US$865.8 million).

Samsung SDI has monopolized the global PDP market with its competitors like Hitachi, Pioneer, and Panasonic withdrawing from the market. However, it is fully saturated now, and the PDP business unit of Samsung SDI is on the brink of restructuring through a merger with Cheil Industries.

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